Consumer trust & loyalty
It’s often said that financial transparency is essential for gaining consumer trust. But the tech sector doesn’t typically struggle with trust issues. In fact, according to a report by the Financial Services Compensation Service, there’s more trust in technology than in any other sector.
But we need to consider the split between established organisations and new businesses. The number of tech start-ups in the UK has more than doubled since the Brexit vote. And these new enterprises have an extra hurdle to jump through when it comes to trust: namely, that unfamiliarity doesn’t pay.
There’s a firm belief that the most important and useful ‘currency’ in financial markets isn’t cash; it’s transparency. Without it, investors don’t have all the information they need to decide whether or not they’ll provide funds to support a business.
And it isn’t just important for gaining consumer trust. Transparency is also essential for gaining investor trust and is seen as one of the main drivers of economic growth. Investor support is particularly important to start-up enterprises. Without it, the opportunities for development are limited.
High retention / low turnover
Businesses, especially in areas such as corporate finance, are generally considered by employees to be more enjoyable places to work when there is greater openness. It’s key for boosting morale and overall job satisfaction.
Unfortunately, staff turnover is highest in the IT and technology sectors. Due to its competitive nature, tech-sector employees with in-demand skills are more likely to actively search for new projects, or they’re head-hunted. It’s also notoriously more difficult for startups and small businesses to retain staff, so that makes it a double whammy for tech start-ups.
There’s also an increasing trend today in the UK for companies to extend financial transparency to employee salaries. In many cases, and if done right, this has helped minimise ‘office politics’. So this kind of openness can be an effective and efficient method for boosting company culture and ensuring employee satisfaction across the board.
We’re living in the digital age, and the convenience of ‘going digital’ has significantly raised the expectations of the average consumer. We’re becoming accustomed to the instant gratification that online services provide.
Today, customers can contact brands at the touch of a button using social media, and receive an instantaneous, personalised response. They can buy products online for same-day delivery, order takeaways on the web, and keep up-to-date with the latest news as it happens.
In light of recent technology advances, customers expect more from the brands that they deal with. There is a definite ‘want = get’ mentality. Customers want to know how businesses are performing; they want to know that their money is safe. So if a business is more open about their financial position, they can potentially improve their customer experience.
The risks of transparency
Financial transparency can be hugely beneficial and tech companies could learn a lot from looking at the successes of financially transparent organisations. But, it only works when it’s done right. Of course, there are risks – with one of the greatest being the misinterpretation of data.
That’s why it’s essential to maintain accurate, clear financial information at all times, using a comprehensive accounting dashboard. And utilise standard processes for making this information public. Innovative, revolutionary technology is key to increasing financial transparency across the country.
At The Accountancy Cloud we would be more than glad to assist you with your services should you need help, therefore, feel free to contact us