Bumpy take off: opportunities in the travel sector 

Travel and in particular cancelled flights have been in the headlines recently and the rise in bookings suggest the appetite to travel is recovering post pandemic. There are reasons to be optimistic, but many uncertainties remain; on the supply side, businesses operating air holidays cautiously await possible ATOL reforms from the Civil Aviation Authority (“CAA”), whilst on the demand side, the appetite for travel will almost certainly be hit by the cost-of-living crisis and inflationary pressure in the long term.  

Staycation or overseas; we still want to go on holiday

Trading so far seems to be resilient to the diminishing levels of disposable income amongst households. The booking cancellation spree that was feared by some has not materialised. Agents are confident that the summer season will be good; pent up demand and deferred bookings are likely to be offsetting much of the impact of reducing budgets for now.  

Much of the UK population are showing signs that they need a holiday for relaxation and for some time away from home. A recent YouGov poll suggests this is a bigger driver for UK holidaymakers than aspirations to visit dream tourist destinations. The staycation boom may have started in the pandemic, but there is also the growing desire for shorter, more frequent and more flexible get-aways. This is an interesting trend to watch as investors look carefully at a company’s future growth plans.   

Cheap airfares are history

Demand and soaring fuel costs are also likely to result in increased airfares. UK travellers have yet to experience any major price hikes due to some airlines hedging some of their fuel exposure. Given the expected rise in airfares, and continued heavy media coverage of flight cancellations, it’s possible that bookings will be impacted sooner rather than later. Holidaymakers may also be looking even closer to home with the cost of petrol and likely increase of rail fares, all of which suggests holiday and caravan parks will remain an attractive sector for investors.   

Staffing remains a critical issue  

Given the currently strong volume of bookings and the need to service exceptional levels of demand, addressing staffing shortages is vital for businesses; inadequate staffing must be resolved if organisations are to effectively use this period to repair COVID impacted balance sheets. Traditional sources may no longer be an option as EasyJet’s chief executive Johan Lundgren pointed out recently in an FT article, 35 to 40 per cent of potential Easyjet recruits were being rejected because of their nationality, up from 2.5 per cent before Brexit. 

Travel businesses may need to have more flexible working arrangements and think carefully about their reward schemes to attract and retain the talent they need for the longer term. Management teams will need to be able to present a clear plan of how they are addressing staff shortages now and in the future.

Changes to the ATOL scheme a real concern

Many tour operators are also braced for the cash flow implications of possible changes by the CAA to the ATOL scheme, the timing of which could be catastrophic given the precarious position many businesses find themselves in following the pandemic.  

Failures in the travel industry which ultimately resulted in the collapse of Thomas Cook in 2019 mean the CAA has proposed amendments to the APC (“ATOL Protection Contribution”) (which protects travellers in the event of insolvency). As a result of these collapses the air travel trust fund has been depleted. Currently a fee of £2.50 per passenger is paid by tour operators to the CAA. This is not considered appropriate because it is not related to the booking value, and therefore the CAA is seeking to build a better system and also replenish the air travel trust fund. 

This fee is likely to increase alongside other possible amendments. Customer accounts could be segregated so that customer funds are held separately from operating cash. This would mean operators would have no access to the funds until the customer returns from holiday and would result in severe cash flow pressure for many tour operators.  

Although the industry has bounced back and travel sector management teams’ confidence appears to be growing following a precarious period, many challenges remain, and the travel trade is still fragile.  

Technology should help protect against market headwinds

Innovations in technology continue to be a differentiating factor for many businesses; contactless payments, electronic COVID passes and streamlined bookings processes can all help improve customer satisfaction. These factors should protect businesses against any booking reluctance caused by market headwinds. Furthermore, the appetite for bespoke holidays appears to be increasing, with consumers often opting for a personalised experience. Those firms that can harness technology and tailor itineraries to individuals’ preferences should be well placed to grow despite challenging market conditions. 

Please contact Jack Hibbs to find out more about opportunities in the travel sector.   

Jack Hibbs, Engagement Manager

[email protected]

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FS Tech 2022: Q&A with Karen Avey

Simon Hemsley speaks to Karen Avey, an Armstrong specialist about the opportunities for FS Tech. Karen has worked on numerous B2B research studies for global banks, insurance companies, wealth managers and payment providers as well as voice of the customer programmes for Appway and Accenture. She has supported several successful FS buy side deals for Armstrong.

In this article Simon and Karen explore what’s driving the growth in FS tech, the challenges of adoption and the continued attraction for mid-tier investors.

Understanding FS tech
“Customers are used to the speed and convenience of Amazon, and they now expect that from their banks and insurers as well.” Karen


We talk to our clients and companies a lot about fintech – how different is fintech to financial services technology that banks and insurers and others have been using for decades?


I don’t think it’s that different in theory. They’re both about applying new technology to financial services (FS) businesses, that’s it. They’re using a whole range of technologies to transform the FS industry, which covers banking, insurance, wealth management etc. Where fintech is perhaps different is that it’s tech-first, so deploying automated processes, data analytics, cloud, AI and machine learning as part of the IT environment. There’s an opportunity for fintech firms to displace legacy tech providers.


FS has always been a leader in technology, driven in part by the need to process large amounts of complex data, and to automate processes to increase efficiency and cut costs. Do you think there’s been a step change in the interest and investment in tech in recent years? 


The banks are further ahead of most FS sectors now, as they’ve invested more in systems and transformation. Wealth management is trying to catch up. I spoke to a range of insurance companies on a recent project and I was surprised by how far behind banking they are. I get the impression that they have a lot more legacy systems than in banking.

Things are starting to change though as insurance companies, similar to banks, realise they have to digitise rapidly to avoid being left behind. These are real challenges for companies trying to transform their tech and processes, and I’ve seen this with the banks and insurance companies who are struggling to find the development skills they need.

There’s a real skills gap especially when you’re operating in a complex, highly regulated environment where people need to know the tech, the sector, market practice, the regulation and how products are priced. FS companies can’t risk their reputations and the market seems to be moving towards outsourcing technology development to get round the problem of finding the right people. 

Drivers for adopting technology 
“The CTOs and COOs I’ve spoken to from more traditional financial institutions want to remove the complexity of running multiple ageing systems that don’t talk to each other.” Karen


What are the key drivers and use cases for FS companies looking at new tech?  


I speak to a lot of Chief Technology Officers, and everyone has different pain points, but there are some common themes.

1. Customer service

Customers are used to the speed and convenience of Amazon, and they now expect that from their banks and insurers as well. The pandemic has sped up this technology adoption as people have become increasingly comfortable transacting online. That’s unlikely to drop back significantly, so it’s a real competitive advantage for FS companies who can build effective, efficient tech-enabled services.

2. Regulation

Regulatory compliance is still a major driver. For banks better tech can reduce the operating costs of complying with regulations as well as improving their chance of finding suspicious transactions. False negatives (like missing potential money laundering) are objectively bad, but many false positives (potential cases that turn out not to be money laundering) can be expensive to hunt down. Better tech can improve the chances of finding the signal from the bad guys as well as reducing time spent sifting through the noise of false reports.

3. Legacy systems

The CTOs and CEOs I’ve spoken to from more traditional financial institutions want to remove the complexity of running multiple ageing systems that don’t talk to each other. They’ve all got these legacy systems that aren’t customer friendly, are expensive to run and it’s getting increasingly difficult to find staff with the skills to maintain them. They want to make things faster and cheaper and they see clear benefits to adopting modern financial technology; more efficiency, customer centricity, and profitable growth.  

4. Complex ecosystems

These are complex environments to operate in. For insurance the market is fragmented and they often sell their insurance products through lots of different channels, including banks. These channels may own the customer relationship and the insurer provides the product; the end user just wants to have everything in one place. Not only does the insurer need an IT platform that delivers across all its functions; it also must interface properly with the banks. Added to that it has to conform to all the regulations and data protection laws.

5. Cyber security

There’s also obviously data security and privacy concerns. The costs are massive, IBM recently worked out that the average cost of a data breach in the financial industry is $5.72m. Cyber criminals are increasingly sophisticated, and the FS sector is an attractive target. It’s not just the costs, the reputational damage and regulatory implications are huge.  

Opportunities for investors  
It’s hard to innovate using legacy systems and yet it’s really difficult when you look around the market to replace them.” Karen 


Is there an inherent tension in financial services between choosing a set of “best of breed” systems or just picking one system that does everything? In my experience, while a system might be able to do everything, it’s probably not going to be good at actually doing all of those things.


Often customers have to choose best of breed systems because they cannot find a niche system that can do everything they need it to. For instance, claims is a core process for insurance companies and their legacy claims handling systems are complicated, slow and falling over. Insurance companies have got this real drive to offer digital self-service because customers want to settle claims much more quickly. They want to invest more into claims settlement using AI for the lower value claims to get them settled within 24 hours. It’s hard to innovate using their legacy systems and yet it’s really difficult when you look around the market to replace them. There’s nothing off the shelf that does a proper job of claims handling. There are definitely investment opportunities for FS tech that delivers a credible, robust and agile claims handling system.  


Are there technology trends that investors should be aware of? 


FS tech deals continued during the pandemic and there seems to be no sign of activity letting up. It’s a really popular area for investors and you can see why when everybody in FS is talking about digitisation, moving to cloud, improving customer service, cost cutting, efficiency and increasing revenue.  

What’s driving fintech is new, it’s about making consumer’s lives simpler whether they are spending, saving or investing money. If they’re going to get the best from an app, as a consumer, it needs to be able to access their bank account, say via an API, and that app will have to have FCA approval as well. 

Services and sectors that support that shift include:

  • Payments: There are some impressive fintechs in payments, Square has millions of businesses of all sizes – from start-ups to large enterprises – they’re using Stripe’s software and APIs to accept payments, send pay outs, and manage their businesses online. 
  • Neo banks: Neo banks (also known as an online bank, internet-only bank, virtual bank, or digital bank) are financial institution that operate exclusively online without traditional physical branch networks. Users perform their financial transactions through Neo bank’s app or website. Neo banks offer low fees (no infrastructure cost), better customer service, and enhanced technology using AI. The market size of neo banks was estimated at nearly $35 billion in 2020. A good example is N26 in Germany which got a full German banking license in 2016 and now has customers across Europe.  
  • Embedded finance and banking-as-a-service: This is where companies and ecosystems embed financial services in their offerings effectively making every company a fintech company. There’s an opportunity here for mid-tier technology companies to play an important intermediary role between traditional financial institutions and their clients; helping them to manage risk and compliance.  
  • Digital currencies and blockchain are hardly a new trend but they’re quietly becoming part of the underpinnings of new technologies.
  • Buy Now, Pay Later (BNPL) is interesting with companies like Klarna who offer direct payments, pay after delivery options and instalment plans in a one-click purchase experience. We’re close to the moment where, as consumers, we’ll be able to do all our financial transactions through one place.

There’s all sorts of interesting new companies and ideas. We’re also seeing crossover into other disruptive technologies like wearables; there’s a company called Preventicum that offers insurance companies a solution which can detect users’ cardiac arrhythmia via smartphone.  What’s next is really hard to predict. Given that customers want convenience and speed these trends are very attractive. FS doesn’t really have the option of ‘do nothing’ about them.

Challenges to growth
FS tech is not one big bucket.” Karen 


What are the challenges to adoption of tech by FS companies? 


There are the usual implementation challenges of slow delivery, over promising and overspending. You also have to meet the regulation and compliance requirements of both the sector and the jurisdiction you’re operating in. It can quickly become fiendishly complicated and makes it a difficult market to enter. 

It’s really important for investors to keep in mind that FS tech is not one big bucket. If an insurance company is looking at their customer journey, they look for an expert in customer journey with experience of insurance. They need both, however, even if you’re an expert in customer journey, they won’t use you if you’re not in the insurance market. The same applies to jurisdictions because they all have different rules. If you’re an expert in Switzerland, it’s really hard to break out of that. Swiss customers want someone who understands Swiss regulation.

Purchasing criteria for tech 
It surprises me how often it still comes back to relationships.” Karen 


What are the key criteria for purchasing tech in FS? 


It’s important to recognise that these technologies are increasingly strategic, business driven and no longer led by IT. That means the product needs to be easy to use, offer a great user experience and do what it says on the tin. I know that sounds basic, but they don’t always! They may also be working with consulting firms who will influence the decision. It’s important that the FS client likes and has confidence in the team they’re working with. It surprises me how often it still comes back to relationships and that companies prefer to buy technology from people they know or is used by their peers.  

Frequently companies can’t properly articulate what they want and need a lot of guidance. It’s important their suppliers listen to their requirements to build the trust of their customers. I’ve spoken to companies who’ve signed on the dotted line without really understanding the difficulty of the implementation, this is exacerbated by the gap in skills we talked about earlier. Often FS companies are looking for the low code / no code approach discussed in Mike Callow’s article where they can train their people to make changes easily and quickly.  

This goes back to how to grow these businesses. It’s not like a consultancy where you can hire in people to get the relationships. On the technical side technology companies may take a buy and build approach as they look to add functionality to their product offering. A problem for mid-tier tech companies is that the fintechs get snapped up really quickly and often by the tech giants. PayPal has bought loads, for example they recently bought Izettle which lots of small businesses were looking at. Similarly, FNZ buying Appway is part of the move towards giving institutions a single platform.   

The next technology is hard to predict. We do know FS companies still have a long way to go on their digital transformation journeys and they’re all at different stages. Also, that there’ll always be a need to evolve technology in FS to meet customer needs and regulators demands, as both change all the time.

Please speak to Simon Hemsley or Solomon Ishack if you’d like to discuss opportunities in financial services.

Simon Hemsley

[email protected]

Email Simon

Solomon Ishack

[email protected]

Email Solomon

Armstrong supports BGF’s investment in Harnham

Armstrong is pleased to have provided commercial due diligence (CDD) for BGF in support of its investment in Harnham, a leading Data & Analytics (D&A) recruitment specialist.

Founded in 2006 by Simon Clarke (Executive Chairman) and David Farmer (CEO), Harnham is a leader in the D&A recruitment market and places candidates in roles for companies ranging from startups to blue chip businesses. With over 150 consultants globally, Harnham’s core D&A recruitment specialisms span across Data Science, Marketing & Insight, Risk Analytics, Data & Technology and Digital Analytics.

In 2021, Harnham launched Rockborne, a new business line operating an Attract-Train-Deploy (ATD) model focused on training and deploying STEM graduates on long term D&A employment placements. Through bespoke training programmes, Rockborne’s academy equips junior candidates with the technical, business, and soft skills required to excel in their future D&A careers.

We conducted in-depth interviews with both clients and market experts to get a comprehensive view of the firm’s operations. Our work also included benchmarking key internal KPIs, and an in-depth analysis of both the D&A recruitment and ATD markets.

Rahul Satsangi at BGF said “Simon, Solomon and the wider Armstrong team delivered an insightful and comprehensive commercial report supporting our investment into Harnham. They carried out an in-depth market and client referencing programme leveraging their experience in the sector to provide clear commercial insights to support our investment hypothesis and Harnham’s growth plans. We thank the Armstrong team for all the work they put into the report and look forward to working with them again in the future.”

Please contact Simon Hemsley or Solomon Ishack to discuss Armstrong’s views on opportunities in recruitment in more detail;

Simon Hemsley, Partner

[email protected]

Email Jack

Solomon Ishack, Senior Consultant

[email protected]

Email Solomon

Armstrong supports Bedford Consulting as it takes investment from Keensight Capital

Armstrong is pleased to have provided sellside commercial due diligence (CDD) support for Bedford Consulting, the leading EMEA implementation partner of Anaplan’s Enterprise Performance Management (EPM) software, as it takes investment by Keensight Capital, the technology-focused, pan-European growth buyout private equity firm.

Bedford Consulting is an Anaplan Gold Partner and has been its EMEA partner of the year for the past seven consecutive years. Anaplan is a pioneering developer of SaaS-based connected planning and analysis (“xP&A”) software which has transformed the way in which enterprises monitor, plan and drive business performance. Bedford Consulting has offices in London, Düsseldorf and Stockholm, and employs approximately 80 deep-domain technical Anaplan experts who support more than 250 large and mid-market customers across the automotive, banking & insurance, consumer goods, technology, transportation and utilities sectors.

Keensight’s partnership will support Bedford’s founders in their ambitious growth strategy to support Anaplan’s journey to increase its penetration in the xP&A market, to expand across Europe, and to extend its service offering to its clients.

Armstrong sellside CDD work included an assessment of market demand for Anaplan and the wider EPM SaaS and consulting market, a detailed review of the competitive landscape for both EPM and for Anaplan implementation partners, and a detailed assessment of Bedford’s growth opportunity.

Neil Doyle, Chairman of Bedford Consulting, said; “We enjoyed working with the Armstrong team. They got an understanding of our business and market position quickly. The CDD report was comprehensive and high quality, they helped investors understand the Anaplan market and our growth opportunity within it.

Simon Hemsley, Partner at Armstrong said; “Congratulations to Neil and Cathal and the team at Bedford, and thanks to the other advisors involved – it was a real team effort. Bedford is a great business and has a fantastic opportunity to grow because of its high-quality client service, its deep expertise in xP&A, and collaborative relationship with Anaplan. We look forward to seeing the business continue to grow in partnership with Keensight.”

If you’re interested in discussing Armstrong’s views on opportunities in the technology or business services sectors, please contact one of the team;

Mike Callow, Partner

[email protected]
+44 7894 594 500

Email Jack

Rupert Cookson, Senior Consultant

[email protected]
+44 7983 110150

Email Solomon

Charlie Mundy, Consultant

[email protected]
+44 7853 430630

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Simon Hemsley, Partner and Head of Business Services

[email protected]
+44 7957 340534

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New Leadership Habits: An Interview with General Sir Peter Wall

General Sir Peter Wall, CEO of Amicus and ex chief of the British Army recently spoke at an Armstrong event at the In & Out (Naval and Military Club).  He shared his thoughts on what leadership needs to look like in prolonged periods of uncertainty. 

When we first discussed speaking at our event it was to talk about leadership following Brexit and the pandemic, now we have Russian’s invasion of the Ukraine. What does this tell you about future uncertainty? 

Western democracies have become complacent and Putin saw his chance and took it. We should accept this is not a passing phase and we’re in unpredictable times. Our society is neither particularly resilient nor robust and the inversion of business priorities in favour of the individual employee over business needs is placing a major constraint on businesses. Added to this are the growing challenges of supply chains fragility, energy prices, inflation and depletion of natural resources. CEOs certainly have plenty to think about.  

Private equity is perhaps more comfortable with disrupted environments and uncertainty – but their portfolio companies may well be less so.  

What do companies need to do to adapt, survive and thrive?  

Any growth plan that doesn’t consider how to get the best from their talent is missing a key element – and that’s primarily about leadership. Just look at the difference between Ukrainian and Russian forces to see how important motivation and alignment behind a just cause can be; and how leading your people by sleight of hand, where alignment is lacking, leads to failure.  

In most businesses the cost of people is their biggest expenditure: you want a culture that justifies that cost in getting the job done. Leadership, creativity and innovation are all part of that equation. This calls for sound leadership habits – there are no silver bullets – it comes down to a mixture of character and approach. 

What are the new habits needed from leaders? 

Our view at Amicus is that there needs to be shift to solving problems rather than admiring them. Leaders need the trust of their people and have the confidence to empower them to execute credible strategies. 

  1. Get people focused on how to think rather than what to think. Regulation and compliance are forcing people onto stereotypical solutions; that may be ok for steady-state. We want free-thinkers who can adapt to changing circumstances and have the confidence to explore the unknown. 
  1. Leadership is paramount.  How else do you get people to trust you enough to make difficult decisions on your behalf, rather than referring their problems upwards for you to deal with? 
  1. In uncertain times we need an acute comprehension of the risks we are carrying and our appetite for them.  We may need to increase that risk appetite to maintain momentum. 
  1. In difficult times we clamp down on cost, which is usually a blunt solution.  It’s important to distinguish between cost and value, and maximise the latter.  There will be difficult choices: savings often erode resilience, which may seem attractive in the short term but can have awkward consequences. 
What would you look for in a management team in 2022? 

They need to be brilliant at the basics.  Giving people their heads is a strength. I would want to see a team empower their direct reports and actively manage delivery performance. Insist on excellence; accepting mediocrity isn’t leadership. 

About Amicus

Amicus is a strategy and leadership consultancy; they help companies create sustainable results by bringing out the best in their people. You can learn more here

Armstrong supports MML’s investment in Vyta, a leading IT recycling company

Armstrong is pleased to have provided commercial due diligence (CDD) for MML Ireland in support of its investment in Vyta, a leading company in the IT recycling industry, with a strong focus on customer service, sustainability, and security.

Established in 2001, Vyta specialises in the secure and responsible disposal of IT equipment, covering collection, data security and wiping, re-commerce, and disposal, all in an environmentally responsible manner. Vyta is the only provider based in Northern Ireland to hold both the ADISA and R2 accreditations, and is one of the largest IT asset disposal companies across the island of Ireland. MML’s investment will support Vyta’s growth strategy in the UK and Europe. Vyta’s first acquisition is FGD, an Essex-based IT disposal company.

As part of the CDD process, Armstrong carried out in-depth interviews with a range of Vyta’s and FGD’s customers, as well as market experts and competitors to give MML a rounded view of Vyta’s market position in the ITAD (IT asset disposal) sector, and its opportunity for growth. Armstrong also assessed market demand and the competitive landscape and worked with MML’s deal team and the FDD team on analysing management’s business plan cases and internal KPIs.

Chris Walsh at MML said; “Matt, Simon, Rupert, and the whole Armstrong team provided a comprehensive and high-quality report supporting our investment into Vyta. The report was insightful and helpful for MML and the management team, with insights and recommendations that will help to shape the strategy to scale the business. We look forward to working together again in the future.”

Simon Hemsley, Partner at Armstrong, said; “The ITAD market in the UK & Europe is a good opportunity for a buy-and-build strategy, as it is fast-growing but fragmented by service line & country. Vyta has a strong management team which has grown the business significantly in recent years and is well-positioned both as a consolidator and for organic growth.”

For further details on this project and Armstrong’s views on opportunities in the business services and industrials sectors, please contact;

Simon Hemsley, Partner

[email protected]
+44 7957 340534

Email Jack

Matt McNally, Director

[email protected]
+44 7894 736523

Email Solomon

Rupert Cookson, Senior Consultant

[email protected]
+44 7983 110150

Email Charlie