Top 5 Business Finance NZ Trends to Watch in 2021
The year 2020 has been a challenging one for businesses worldwide, including those in New Zealand. With the economic turmoil caused by the COVID-19 pandemic, companies have had to adapt quickly to the changing environment. As we move forward into 2021, it’s essential to stay informed about the latest trends in business finance in New Zealand. Here are the top 5 trends to watch:
1. Continued low-interest rates
The Reserve Bank of New Zealand (RBNZ) has kept interest rates at record lows since March 2020, and it is expected to continue throughout 2021. This measure aims to stimulate economic growth and help businesses stay afloat during the pandemic. However, this low-interest rate also means that depositors face lower interest earnings, which impacts their buying power. Businesses should make adjustments to optimize their cash flows, such as shifting to long-term loans rather than short-term ones.
2. Increase in government support
The New Zealand government has been steadfast in its efforts to support businesses affected by the pandemic. The NZ COVID-19 Resurgence Support Payment provides temporary financial support to businesses that face a loss of revenue or increased costs as a result of a COVID-19 alert level increase. The government has also announced changes to the COVID-19 Leave Support Scheme, enabling more employees to receive financial support if they need to self-isolate, or their workplace is closed due to COVID-19. Businesses must keep up-to-date with changes to government support programs to maximize their benefits.
3. Embracing digitalization
The pandemic has led to a significant increase in the acceptance of digital transactions, resulting in the growth of e-commerce and online sales. The trend is expected to continue throughout 2021, with consumers preferring online shopping for its convenience. Businesses should invest in digital marketing and promotion strategies to capture this growing market. Additionally, it’s crucial to upgrade financial technology and software to streamline processes, making them more efficient and effective.
4. Enhanced cybersecurity measures
With an increase in digitalization, businesses must also take cybersecurity seriously. As transactions become more digital, the risk of cyber threats also increases. Due to remote working arrangements in response to the pandemic, employees are using unsecured networks, making them vulnerable to cyber attacks. Businesses should adopt necessary measures such as cyber insurance, data encryption, and password protection to mitigate security risks.
5. Green finance and sustainability
Environmental protection remains a critical concern globally, and businesses must incorporate sustainable practices into their operations. In line with this, green finance has become increasingly popular. This refers to financing for sustainable projects that positively impact the environment. Businesses need to incorporate environmental considerations into their financing strategies. With green finance growing in popularity, this trend is expected to continue throughout 2021.
In conclusion, 2021 brings new challenges and opportunities for businesses in New Zealand. The key to success is staying ahead of the game by keeping up-to-date with the latest trends and adopting best practices. This approach will help businesses navigate through the uncertainties of the year.
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