Nov 15 (Reuters) – Tesla Inc’s (TSLA.O) stock extended its recent selloff on Monday as investors reacted to CEO Elon Musk’s recent share sales of a combined $6.9 billion, as well as to his most recent tweets.
Tesla’s stock ended nearly 2% lower at $1,013.39, leaving the company’s market capitalization down about $207 billion since before Musk began selling shares last week.
The latest stock decline follows a Sunday dispute on Twitter between Musk, the world’s richest person, and Bernie Sanders after the U.S. senator demanded that the wealthy pay their “fair share” of taxes. read more
During Monday’s session, Tesla traded as low as $978.60, pushing its stock market value below the $1 trillion mark on an intraday basis for the second time in four sessions. Tesla first hit the $1 trillion mark late last month. read more
“Tesla shares have been sinking post the sale based on a Twitter poll last week. And Musk’s Sunday tweet deriding a senior politician may add pressure on the stock in the coming weeks,” said Kunal Sawhney, CEO of equity research firm Kalkine Group.Sponsored by LeegalityRead free Case StudyDhanvarsha Finvest’s paper-based loan agreements were creating massive business problems. See how Dhanvarsha solved these problems and went 100% paperless in this free case study.
“By offloading shares worth billions of dollars, Elon Musk is likely to accrue a tax bill of around $15 billion.”
Musk sold 6.36 million Tesla shares last week after floating the idea in a Twitter poll. He would need to offload about 10 million more to fulfill his pledge to sell 10% of his holdings in the electric-vehicle maker.
Fueled by thirst on Wall Street for electric vehicle makers, Tesla’s stock has surged more than 140% in the past 12 months. The recent selloff has the stock at its lowest level since late October.
Also on Monday, Rivian Automotive (RIVN.O) jumped nearly 15%, with the Amazon.com-backed (AMZN.O) EV maker now up about 90% since its initial public offering last week.
Reflecting retail investors’ enthusiasm, Tesla and Rivian were the most-traded stocks on Fidelity’s online brokerage, with more than two buy orders for every sell order.
CHIP SUPPLY CONSTRAINTS
Musk on Saturday asked a Twitter user not to “read too much into” PepsiCo (PEP.O) CEO Ramon Laguarta’s comments about expecting its first delivery of Tesla Semi trucks in the fourth quarter. read more
“As mentioned publicly, Tesla is constrained by chip supply short-term & cell supply long-term,” Musk tweeted. “Not possible to produce additional vehicles in volume until both constraints are addressed.”
Tesla has weathered the pandemic and the global supply-chain crisis better than rivals, posting record revenue for the fifth consecutive quarter. read more
Meanwhile, investor Michael Burry of “The Big Short” fame took aim at Musk again, tweeting, “@elonmusk borrowed against 88.3 million shares, sold all his mansions, moved to Texas, and is asking @BernieSanders whether he should sell more stock. He doesn’t need cash. He just wants to sell $TSLA.”
Reporting by Sruthi Shankar and Subrat Patnaik in Bengaluru Additional reporting by Anisha Sircar in Bengaluru, Saikat Chatterjee in London, by Ira Iosebashvili in New York and Noel Randewich in Oakland, Calif. Editing by Anil D’Silva and Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles.
Accounting Automation in the Future
Source: Finance Derivative
Accounting automation is the process of streamlining repetitive tasks in financial processes. For example, some processes like invoicing are time-consuming and repetitive. Automation can reduce manual labor and save businesses both time and money. Also, it helps improve accuracy, reduces errors, and provides more accurate financial reporting.
Accounting automation in the future will be increasingly important for businesses to stay competitive. But every new change comes with both advantages and challenges. Let’s dive in to get ready for this future trend.
Potential Future Benefits of Accounting Automation
Increased Efficiency and Cost Savings
Accounting automation is a great way to increase efficiency and cost savings. For example, AI bookkeeping uses advanced algorithms to automate many accounting tasks. So, companies can track expenses, prepare financial reports, and more using AI.
It reduces the time needed for manual entry. So, businesses can spend fewer labor hours on tedious processes. They can increase efficiency by freeing up resources for more strategic work. It also helps reduce errors and inconsistencies associated with manual processes. So, the cost of compliance is lower because of greater accuracy.
Improved Accuracy and Reliability
Accounting automation can improve accuracy and reliability in accounting processes. For example, Automating bank reconciliation is less prone to errors from human mistakes or miscalculations. You can automate the process to identify discrepancies between the bank statement and accounting records. It helps to ensure that financial reports remain accurate and reliable. So businesses can take corrective action faster than processing data manually.
Streamlined Business Processes
Streamlined business processes involve eliminating unnecessary steps, reducing paperwork, and automating repetitive tasks. This allows businesses to focus on higher-value activities, such as developing new products, improving customer service, and developing strategic plans for the future.
Making a Better Decision
Accounting automation can enhance decision-making in 3 ways.
1. It enables businesses to access real-time information from multiple systems. So they can identify trends for better decision-making.
2. Automated accounting also helps with forecasting, budgeting, and auditing tasks. It enables businesses to be more proactive in their decision-making processes.
3. Also, automated accounting tools can integrate with enterprise resource planning (ERP) systems. They can manage data across the enterprise and make concise decisions that are favorable to the company as a whole.
Increase Customer Satisfaction
Accounting automation can help businesses increase customer satisfaction by streamlining their processes and providing a more efficient customer experience. For example:
4. Automated accounting systems can automate tedious manual tasks such as invoicing, data entry, and payroll processing. This allows businesses to focus on other aspects of their operations that are more important for customer service.
5. Automated accounting systems can also provide customers with more accurate and timely financial information. The information can help them make better decisions about their finances.
6. Also, accounting automation enables businesses to respond quickly to customer inquiries. It helps reduce wait times and improve the overall customer experience. So, you can build better relationships with their customers.
Accounting automation takes place online or comes with cloud-based solutions. So, you can access your information and do your job from anywhere instead of being confined to one spot.
Challenges to Implementing Accounting Automation in the Future
Cost of Technology Infrastructure Upgrades
Automating an accounting system often requires businesses to invest in new hardware and software, such as servers and other associated equipment. These upgrades come with a hefty price tag that may be difficult for small businesses to afford.
There are also extra costs, such as installation fees, setup charges, software licensing fees, cloud storage costs, and maintenance fees.
Training Requirements for Staff Members
Accounting automation involves using advanced technology to automate certain processes. So, it creates a need for trained staff members who can handle the new technology. Training requirements vary depending on the type of software used.
Some common training includes record-keeping procedures, software applications, and troubleshooting skills.
Regulatory Compliance Issues
Accounting automation can be a time-saver, but it also requires firms to be aware of the applicable rules and regulations. Companies must ensure that their automated systems are compliant with relevant laws and regulations such as Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS), and other applicable accounting standards.
Besides, they must also comply with legal requirements related to taxes, financial statements, and other reporting obligations.
So, businesses must consider the complexities of regulatory compliance when automating accounting.
Security and Data Protection Concerns
As businesses move their accounting processes to the cloud, they are exposed to a wide range of potential security risks. Data breaches can cause significant damage to the business’s financial and reputational integrity. Besides, the complexity of automated accounting systems can make it difficult to identify and detect suspicious activities or errors in the system.
To ensure data is kept secure, businesses must have strong measures in place to protect against unauthorized access, encryption, and regular backups of data.
Furthermore, companies must train their staff on the proper use of the system. It helps staff to know how to protect confidential information from being accessed or misused by unauthorized personnel.
Businesses may also need an experienced IT team to monitor and maintain the system to keep up with any changes or updates for optimal performance.
Accounting automation has come a long way in the past few decades. It is likely to continue to advance in the future. As technology continues to evolve, more businesses will likely begin taking advantage of automation in their accounting processes. So, businesses should be aware of the potential challenges and prepare to stay competitive.
Three ways data can help financial organisations thrive in today’s economy
Source: Finance Derivative
By Rinesh Patel, Global Head of Financial Services, Snowflake
Financial organisations are caught in the middle of an ever-evolving landscape caused, in part, by emergent fintechs, shifting consumer expectations and increased regulatory change. Businesses are therefore turning to their data, re-imagining how they collect, process and analyse it, to drive growth and opportunity.
Despite this intention though, firms can often find themselves overwhelmed with the amount of data at their fingertips. Data tends to reside in individual departments that have no secure, efficient way of sharing it with other teams, creating silos of information. When teams need to collaborate, organisations are faced with additional costs and complexities in the movement of that data. The current infrastructure used by many financial institutions is not able to support the changing requirements of the industry, where data is the lifeblood.
Firms looking to harness their data should leave behind their outdated legacy architecture and implement an enterprise data strategy with a cloud-native platform. They can reposition themselves to accelerate time to market and value, with differentiated products and improved client offerings to gain a critical competitive advantage. Here are three ways that financial services are using better technology and enhanced data management to add business value.
Adhering to regulatory requirements
The volume of global regulations and reporting obligations has risen exponentially in the past decade, creating greater complexity and security challenges for firms capturing and processing data. Many of these regulations were taken by supervisors to ensure financial stability after the financial crisis of 2008. Regulators have greater expectations of firms with the aim of risk mitigation and transparency. With advanced technologies facilitating data capture, storage and analysis now available, supervisory bodies are also keen in part, to ask for additional disclosures because it’s now possible to demand more documentation and seek greater transparency.
The landscape of differing interpretations, overlapping regulatory requirements across asset classes and geographies and strict, even unrealistic deadlines for implementation have forced customers to take tactical quick-fix solutions, elevating operational risk and the chance of regulatory fines. Compliance departments have therefore been spending years building reporting processes, managing inconsistent data sets, maintaining ageing data stores and importantly overseeing differing levels of governance, adding more cost and complexity to the task at hand. For a large multi-segment global bank or asset manager this fragmented and manual approach to data management and analysis is not sustainable given the scale of processes and multi-geographic considerations that they have to comply with.
As regulators continue to push the long-term structural change agenda, financial services must now ready themselves to meet more robust reporting requirements to comply with the ever-changing regulatory landscape. The objective is to simplify and better manage data across teams with the governance and security provided by technological capabilities now offered through modern cloud capabilities to drive needed reporting. This will allow firms to replace old and inconsistent data with a centralised data architecture, providing a single source of truth. The time and cost reduction from data sourcing, ingestion, and the normalisation of data for analysis, can shrink to significantly streamline reporting processes.
Customer 360 experience
Consumers provide financial institutions with a vast amount of information, ranging from their banking habits to their behavioural preferences. Financial organisations have traditionally been slow to tap into the totality of this information to provide a better experience for customers.
The quest to provide greater visibility and a 360-degree view of customer behaviour is at the core of financial services organisations’ priorities. Customers want smooth, easy digital experiences that can speak to their desire for ease of use and convenience. This is seen in the ways virtual banking consumers have opted for technologies that are simple to interact with, self-directed and frictionless when it comes to carrying out digital transactions. New regulations, such as PSD2 and rules around open banking have also primed customers to expect more.
The challenge for legacy institutions is to bring the ease and usability of digital-first platforms with the sophistication of a major, global provider. Tapping into the full spectrum of data created by consumers is central to a successful transition.
Wealth advisory, investment management professionals are increasingly looking at data capabilities to support ongoing relationship management with their clients. Using data to understand customers in this way helps banks to successfully move customers up the wealth value chain. Wealth management organisations can digitise the investment process – from finding customers to managing accounts, and offering bespoke plans. Effective use of data in this sector can free up time for advisors, helping to retain key customers and charge higher commission levels thanks to a new level of personalised service.
Developing an effective ESG strategy
Environmental, social and corporate governance (ESG) considerations have grown in significance with increasing stakeholder pressures, driving a response by firms to prioritise their sustainability agenda. To understand, evaluate the problem and take action, firms need access to technology providing holistic ESG data capabilities and solutions, with performance and scale.
Financial firms are amassing large data sets from the public sector, including government reports, scientific bodies and private sector reports, to understand and address the climate challenge. Businesses are moving with urgency to acquire robust data sets, to meet ESG criteria and sustainability metrics needed to evaluate impact and make progress against their own commitments. There are several pervasive business use cases for teams experiencing ESG data challenges, including portfolio construction, financial planning and regulatory reporting that will require an effective ESG data management strategy.
Ever present challenges in the ingestion, standardisation, and sharing of ESG data will be at the forefront of every organisation – as they process the magnitude of the challenge and transform their operations to address the issue. With cloud-native solutions, firms can use ready-to-use query data across established marketplace data sets. They can then share that data across teams in a secure, governed way – with greater speed to market. Organisations can meet the need for scalable analytics, and access a data ecosystem to build their own proprietary ESG applications for different user and workflow requirements.
A business fit for the future
With data cloud solutions, businesses can effectively analyse the vast amounts of data available to them, equipping them to meet the ever-changing financial landscape. Leaving behind legacy systems will open up a multitude of opportunities and benefits that will drive business growth. This includes developing a 360 view of the customer, improved data governance and the opportunity to use data to support an effective ESG strategy. Without the ability to harness data through the cloud, companies will get left behind the competition and struggle to meet the standards that modern consumers expect.
Central Bank Digital Currency: What is the future of our Banking System?
Source: Finance Derivative
Dr Pooja Lekhi, Vice Chair, Department of Quantitative Studies, University Canada West
Central Bank Digital Currency (CBDC) is an electronic form of currency issued by a central government that citizens can use to make digital payments and store value. If a country issues a CBDC, its government will consider it to be legal tender, just like fiat currencies; both CBDC and physical cash would be legally acknowledged as a form of payment and act as a claim on the central bank or government.
CBDC Benefits over Fiat Currency
One of the biggest advantages of Central Bank Digital Currency is an increase in the safety and efficiency of both wholesale and retail payment systems. A central bank’s digital currency facilitates the quick settlement of retail payments andhas the potential to improve the efficiency of POS (point of sale) and P2P (peer-to-peer) payments.
In addition to domestic transactions, the current cross-border payments model depends heavily on central banks operating the real-time gross settlement (RTGS) infrastructure within which all local banks’ obligations must settle. Due to the existence of time lags in cross-border payments, participating parties are exposed to settlement and credit risk. A CBDC can eliminate counterparty credit risk, and the use of digital currencies in cross-border transactions can be cost-effective. This implies several advantages of CBDC over traditional money, including higher transaction speeds, tangible reduction of fees and automation of payment systems, and increase of their usability.
Advantages of CBDC over cryptocurrencies
The unique feature of CBDC is that it is backed by central bank deposits or a government pledge – they offer stable value and the benefit of regulatory stability and audit transparency.
Traditional cryptocurrencies, like Bitcoin, involve complete decentralization and lack of control by any regulatory authority. CBDCs do not completely rely on decentralized technologies. They are administered by central bank agents and distributed via digital ledger technology. The technical support is carried out centrally.
Countries exploring CBDC
The People’s Bank of China is one of the first central banks to develop a CBDC. They deployed a special task force in 2014 to research and implement a digital yuan. China’s digital yuan can now be used for wealth management products and bank loans. This move by China’s central bank extends the use of digital currency beyond the purchase of consumer goods
In 2017, the world’s oldest bank, Swedish Riksbank, began its CBDC project called e-krona. In collaboration with Accenture PLC, a pilot took place between 2020 and February 2022. E-krona was launched with the purpose of offering a robust alternative in case of emergency or turmoil of private payment service providers, thereby ensuring the Swedish payment system remains stable.
The Bank of England and Bank of Canada are still investigating integrating CBDC into their financial systems.
Other countries which are in a pilot phase of a central bank digital currency include Russia, Thailand, Malaysia, South Korea, the United Arab Emirates and Saudi Arabia.
Concrete plans to launch a CBDC are recorded by the Atlantic Council tracker in Canada, Australia, Brazil and India, among others.
“Around 100 countries are exploring CBDCs at one level or another. Some researching, some testing, and a few already distributing CBDC to the public,” said Kristalina Georgieva, IMF Managing Director
Introducing CBDCs worldwide has the potential to change the future of money. Firstly, it might raise crypto adoption as people will have access to the platforms to convert cryptocurrencies into legal tenders. Furthermore, countries are seeking to preserve key aspects of their traditional monetary and financial systems while experimenting with new digital forms of money to give users more convenience, safety and efficient services. As regulators and central banks take concrete steps and measures in the direction of establishing CBDCs, the world will begin to embrace digital currencies as a standard.