Business
Let’s Talk: Picking the best fintech tool for your business
There’s no denying that big and small businesses need to employ some technologies for their financial operations, given the difficulties that organisations face today and the requirement for flexibility and efficiency.
But which option is better for your company? What qualities should a fintech tool have?
In this week’s Let’s Talk, we go over the important factors that our experts consider when selecting a financial tool or app for their business.
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Sam Kothari, Head of Growth ANZ, Airwallex
“Choosing a fintech partner can be overwhelming. The risk of wasting time and money on solutions that aren’t quite right, can mean you stick with the status quo. The secret to finding the right fintech solution for your business is in the prep.
“Start by asking what problem am I looking to solve? Do you need a partner for payments, obtaining capital, regulatory obligations, or managing the books? Clarity upfront will help avoid any overlap or incompatibility, and your team can be a helpful resource to identify priority pain points.
“When selecting a partner, businesses often overlook the time and resource commitment needed to get the service up and running. Factor in that your team may need training, or the solution may need time to integrate into your tech stack. Expecting efficiencies overnight will lead to disappointment. Instead, ensure you know what’s required at the outset, as well as the customer support available.
“Most importantly, your partner must be able to grow with you. Consider what support you’ll need in the future and whether your chosen fintech partner can meet these needs.”
Michelle Kvello, Founder, Lantern Partners
“The real key to finding the right fintech tools for your business is to start by identifying the key finance processes that you want to automate. Too often I find businesses start with the tool or app itself, without understanding the processes first and that can lead to even greater inefficiency and frustration that really isn’t the fault of the tool they picked!
“Once you have clarified the processes then pick the cornerstone fintech tool you need in the business, usually the tool or platform that underpins your general ledger. It’s the foundation you build your fintech stack on. Ideally all your other fintech tools should integrate with that primary technology tool and that’s how you get real efficiency.
“Finally, I think there has to be an understanding that there is always a tradeoff between flexibility and useability. The more flexible a tool is the more difficult it is to manage and vice versa if it is easy to manage it may not have 100 per cent of the functionality you ideally want.”
Benjamin Yeo, Chairman of the National Corporate Finance Committee, Moore Australia
“With a vast array of fintech companies in the market, it can be overwhelming for business owners to research and then decide which fintech is most suitable for their business. My advice, having just been a judge for the Finnies 2022, the most recognized awards that celebrates the success of the Australian fintech industry, is to log into the FinTech Australia website. The FinTech Australia website provides a wealth of information on Australia (and international) fintech companies, along with Industry Reports and a Services Directory which greatly assist businesses identify the most suitable fintech/app for their requirements.”
Alex Pasminka, Chief Marketing Officer, Shift
“Always start with research. When running a business and squeezed for time it can seem easy to go with the first option you find. That can end with frustration if it doesn’t fit your business, isn’t flexible or is going to cost you more in time than it’ll save in money.
“If you’re looking for a tech-driven financial provider, make sure it integrates with your systems and cashflow needs. Nothing beats word of mouth, so ask around your circle of business colleagues to get opinions of the tools they use.
“Questions to ask your network, and yourself, include: Is it easy to use? Does it suit my exact business needs? Is it flexible, i.e. if it’s a financial solution can I change my payment schedule or the product I’m using? Will it make my customers’ lives easier? Is there a real person I can contact for support?
“The wrong tools can slow you down. The right tools can become real sales enablers for you and have a flow-on effect for your trade customers and – ultimately – your cashflow.”
Vijay Sundaram, Chief Strategy Officer, Zoho
“Cash and financial health is the lifeblood of any business, and the best way to keep it flowing is not through multiple disparate tools and apps, but a single platform that integrates everything from invoices, accounts and inventory, to subscriptions, expenses and point of sale. It’s easy to think that the more platforms you use the better, but the opposite is true. If you use half a dozen different apps or tools for your financial operations, your business will operate in silos; whereby crucial data and insights don’t flow throughout your business. As a result, you’ll be forced to manually complete tasks that could be automated, which wastes precious time.
“Not only that, using multiple tools is more expensive and takes longer to integrate, understand and master. The benefits of an integrated finance suite is that it streamlines your back-office finance operations, is more affordable and accessible, easier to administer and enables you to make real-time, data-driven business decisions. The best integrated finance tools, like Zoho Finance Plus, don’t only integrate with one another, they integrate seamlessly with your entire business, from your CRM to your marketing and data analytics tools.”
Daniel West, Chief Sales and Support Officer, MYOB
“In an increasingly data-driven business landscape, using the right digital apps is crucial for sustainability, growth and ongoing success. Business management tools should not only support your existing operational tasks, but be scalable to make sure you’re covered for future technology needs aligned to your long-term goals. Look for tools that can truly support your needs and provide you with real-time insight into your business. I’d recommend businesses:
- Opt for cloud-based solutions so you access your business data on any device and from anywhere – an invaluable advantage in a competitive, fast-paced business environment.
- Choose tools where you pay only for what you really need – so you’re not wasting money on apps where you use only a handful of their available features.
- Weigh up your business needs against the app’s capabilities and do your research to see if you could perhaps consolidate to save overall subscription costs – for example go with one more advanced tool in place of three others.
- Check if your chosen tools can properly integrate with each other to avoid experiencing digital disconnection, and ensure the software provider is aware of any potential integration problems and are addressing these head on.”
Callan Mantell, Vice President JAPAC, Oracle
“When you think about the construction industry, the image of the Sydney Opera House, or The Beehive might pop into your mind. Your first thought is probably not fintech. However, the builders and head contractors who deliver these iconic projects – and our homes, data centers, warehouses, and everything else, do need to think about how technology can be deployed to dramatically improve their back-office processes.
“Many builders have made great strides in efficiency and innovation at the job site with technologies like the Internet of Things, reality capture, drones, and autonomous vehicles. Even more efficiency gains can be had by automating and streamlining the progress claim and payment processes.
“Cloud-based collaborative claim and payment management solutions can boost efficiency and reduce risk across the entire process. And by supporting compliance with the Security of Payments (SoP) or Construction Contracts (CC) Acts, they help ensure everyone is paid fairly and on time.”
Merlin Luck, Regional Vice President of Small and Medium Businesses, Salesforce
“There’s more choice than ever when it comes to fintech tools, providing small-to-medium-sized businesses with greater access to the financial instruments they need to realise their growth ambitions. For example, the days of visiting the local bank manager at a brick-and-mortar store have given way to online financial institutions running on state-of-the-art technology backends.
“Sixty-six per cent of customers expect companies to understand their unique needs and expectations, and only 27 per cent feel that financial institutions provide great service and support. As such, it’s crucial to choose a fintech provider that can tailor to your small business’ circumstances and customers. Prospa, for example, allows small businesses to apply for loans of up to $250,000 using a simple online application running on Salesforce Service Cloud. After a quick credit check, in many cases, business owners receive their funding in 24 hours.
“Powered by Salesforce, these options are possible with Prospa’s sophisticated use of data insights to create a single view of the customer.
“Given the competitive fintech landscape, small businesses need to choose providers powered by sophisticated technology to ensure the benefits of a 360 customer view can be implemented for more personalised services.”
Anny Le Wilson, Chief Revenue Officer, Joust
“Fintechs are often all painted with the same brush based on the misconception that a fintech can be a one stop shop for all parts of your business. This is simply not true. Businesses are complex and there will be different solutions required for different business goals and outcomes. It’s important to select the right fintech partner for different parts of your business, this can range from the payment processors, to the KYC process, to payroll and project management, all the way through to marketing and sales. The tools required for a fintech should be very dependent on the key objectives and outcomes the business is aiming to achieve. When the objectives and outcomes are clearly defined, choosing the right set of tools becomes easier.
“For businesses that are transitioning to digital models, a digital customer acquisition strategy is important for managing the sales pipeline and maintaining a sustainable business model.
“The majority of Aussies are now accustomed to the benefits of digital connectivity to get business done.
“Using digital channels to drive customer acquisition means that you are connecting with people who are already looking for your services. Digital marketing channels have the capability to drive significant flows through a business, delivering a stream of quality customers on a consistent basis. If managed properly, these customers can multiply based on other products they may be in the market for or by providing referral and advocacy for your business.
“Finding the right fintech partner for digital distribution, and customer targeting, is an important part of scaling your business. The true value of digital customer acquisition is unlocked when businesses make an ongoing commitment and integrate it into their workflow.”
Paul Byrne, CEO, Zai
“One service that all businesses should be asking their payment providers about right now is PayTo. Built on the back of the New Payments Platform, PayTo allows businesses to charge their consumers through direct bank transfers using their PayID. It’s incredibly useful for companies that run business models with recurring payments, as it both automates the payment and allows it to happen in real-time. As it’s a direct bank transfer, you also avoid merchant fees for card payments and any charges that may occur if you attempt to draw payment out of an overdrawn account.
“Embedded finance experts such as Zai have been working closely with NPP to deliver best-in-class solutions for PayTo.The service was only launched last month, but companies should start enquiring about it now to get ahead of what will be a major shift in how Australians manage payments.”
Karl Durrance, Managing Director ANZ, Stripe
“Payments provide the essential rails for commerce. Whether that’s your customers paying you, you refunding your customers, or ensuring your employee’s wages and expenses are paid, payments are what makes the world go around. With the plethora of payment options now available as digital wallets, subscription services, online marketplaces, having the right financial infrastructure to power your online payment processing and commerce solutions can save you time, money and help streamline your business.
“Digital transformation isn’t just an option for businesses looking to get ahead. It’s now a necessity for any company of any size and that’s where platforms like Stripe come in. Optimising payments, adding new business models, driving additional revenue streams and scaling faster are all key to business success. From homegrown brands like Luxury Escapes and The Dinner Ladies to much larger multinational businesses like Xero, Atlassian, and Scentre Group (Westfield), being armed with the right tools means we can collectively grow the GDP of the internet.”
Rob Taylor, Head of New Markets ANZ, Zoom
“The customer experience is more central to financial services than ever before. People want flexible, secure options from wherever they happen to be. We’ve worked with customers like NAB to evolve the way financial services are delivered, using Zoom Rooms, Meetings and Zoom Phone. Features like virtual receptionist, smart call queues, and end to end encryption give your team and customers easy access to secure, streamlined services.
“If it’s apps you’re after, look no further than the Zoom Apps library. It’s a treasure trove of tools. I’ve been loving the online whiteboard from Miro, using visual tools like sticky notes and diagrams, to democratize participation across our hybrid teams and produce more actionable outcomes.
“With the DocuSign app integrated directly into Zoom, users across banking, finance and insurance industries are benefiting from the incredible time saver that is digital signatures. After weaving this app into my own day-to-day, it’s hard to imagine we ever used to courier contracts over to customers or vendors for their physical signatures! It’s a real game changer.”
Lucy Allen, Global Head of eCommerce, OFX
“Fluctuating exchange rates come with the territory of managing a global ecommerce or import/export business. Rather than using precious time watching foreign exchange markets all day, an easy way to streamline cashflow and help protect your business from volatility is through natural hedging.
“This occurs when your overseas revenue, earnings, and costs, from customers or partners, are in the same currency. Costs can also include different business expenses, such as paying taxes, vendors or suppliers. The biggest benefit to natural hedging for businesses is more certainty over profit margins, as you aren’t converting revenue unnecessarily at an exchange rate you can’t control.
“Fintech tools such as an OFX Global Currency Account, which grants access to eight virtual currency accounts, allow businesses to achieve natural hedging; you can receive, hold and send funds in multiple currencies, within a single dashboard. So you can bypass unnecessary conversion fees eating into your profits.”
James Campbell, Regional Manager ANZ, SnapLogic
“Integrating diverse apps and data as well as automating core workflows and processes are critical first steps to creating a modern, connected financial services experience for consumers. Doing so allows you to harness the power of your data to gain insights for better decision- making, inform the development of new products and services, streamline operations, lower costs and more.”
“Many firms are already using automated workflows and AI to keep pace on the surface with consumer expectations. But these pockets of automation and digitalisation are often siloed, the product of disconnected data and applications, leading to inconsistent consumer experiences.
“The fact is the faster you can integrate all your applications and systems, the better you can compete with seamless, connected experiences for your customers. It allows you to harness the power of your data to gain insights for better decision making, inform the development of new products and services, streamline operations and lower overhead costs, and more. With a true 360-degree view of your customer, you’re able to deliver personalised marketing and services that meet their needs.”
Chris Dahl, Co-CEO, Pin Payments
“Small businesses play a significant role to the Australian economy, yet are often the least advanced when it comes to digitising and optimising their own operations. However, nowadays, it’s very easy to outsource aspects of the business which are time consuming or laborious using technology.
“Firstly, if you haven’t already, make sure you have the right digital accounting software (like Xero or MYOB) to simplify this process. Once this is in place, look for aspects of the business which could be made more efficient. There are apps for monitoring business expenses (Expensify), getting your invoices paid early (Marmalade) and handling your backend business payments (Pin Payments/Stripe).
“While there are countless apps to make running your business easier, what you decide on will depend on your needs. Take the time to read reviews from other businesses using the tools you’re considering, to get a better idea on their impact to your business.”
Marcus Lasarow, Founder and CEO, CashD
“Considering the flexibility of our work lives now, the pay cycle is the last bastion for change. Along with the emergence of apps that enable micro savings, BNPL services and financial coaching, many employees are also seeking the option of earned wage access to match their new work models.
“The traditional pay cycle is outdated, there are more people accessing apps to get their pay before pay day rolls around, as opposed to using credit applications for living costs. An app that enables workers to get paid their up-to-the-minute accrued earnings from their employer at any time on any day, can flip the old pay cycle system on its head.
“The CashD app integrates with a company’s existing processes across payroll, workforce management and HR solutions, and offers an extension of the company payroll funds. A 2020 survey demonstrated that flexible pay solutions that empower employees, such as an app for access to a real-time digital wallet of earned funds, can increase staff retention by 19% and speed up recruitment by 27%. The seamless low risk experience can be a game changer for the business, and make them an employer of choice.”
Patrick Tripp, SVP of Product Marketing, Cheetah Digital
“Marketers in banking and finance are used to navigating regulations. Strict rules make it challenging to connect with consumers in a meaningful way, something now expected from all brands digitally. However, with the right tools and support, restrictions can spur creativity and see finserv brands uniquely differentiate from their competitors.
“Banking and finance marketing teams must have access to industry-compliant solutions that enable them to make bold customer interactions. Rather than having non-engaging, one-way communications, there is an increasing need to offer a two-way conversation between business and consumer across all channels.
“Solutions that offer personalised and two-way engagement with consumers across multiple channels will increase the customer lifetime value due to their meaningful experience with your business, which then presents the opportunity to cross-sell and upsell with your happy clients.”
Carly Shamgar, Co-Founder & CEO, Shouta
“Utilising fintech tools and apps in the workplace can streamline processes and give you more time to focus on the running of your business. The question is, what are your pain points and what tools are available to help you?
“I work with businesses every day who struggle with the hassle of corporate gifting. Often, businesses are ingrained with old school processes and ideas around gifting that can be time consuming, expensive, and a logistical nightmare. Many are now opting for new-age fintech alternatives to simplify the process.
“The Shouta Biz platform allows businesses to digitally gift clients and employees in a way that is quick and affordable – it’s a must-have fintech tool for all businesses big and small.”
Guy Olian, CEO, Smart Ease
“Given the huge number of fintechs in the marketplace, thorough research is critical before adopting a solution or partnering with a business. Many of the best fintechs solve a single problem and have specialist expertise in their niche; look for case studies to get a good sense of the business problems solved and the applications in different settings. A good source of advice or information could be your industry body or association.
“While the tech aspect is key, most fintechs are only as good as their service. Often you need more than just a platform to complete a transaction. You may need some advice or consultation, so find a fintech that will listen to you, has the resources to help, and that puts customers first. As well as asking the right questions, look for genuine testimonials that demonstrate a strong service record.
“Finding the right solution for your business can unlock huge potential. These innovations can make your business more efficient by increasing productivity and reducing operating costs. Smart Ease, for example, helps businesses decarbonise and digitise their operations – which helps to increase business efficiencies and lower overhead costs.”
Brian Renvoize, Director of Growth AU, Wayflyer
“Australia is home to a thriving culture of entrepreneurship and innovation, with a rising number of individuals committing to the dream of establishing their own businesses. With the eCommerce space bustling in particular, there is a need for agile and smart tools that support businesses in this sector and enable them to grow, especially from a funding and analytics point of view. One of the biggest challenges is that traditional finance providers often don’t consider the unique context of eCommerce businesses.
“However, new alternative finance providers are increasingly offering solutions tailored to the needs of this sector. This includes things like evaluating business performance holistically when assessing funding applicability. It also means providing fintech tools/apps which help entrepreneurs make data-driven decisions based on insights from sales, revenue and more. In short, business leaders should collaborate with a company that sees the relationship as a partnership – one where both parties thrive.”
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Transport providers, businesses and governments on Saturday are rushing to get all their systems back online after long disruptions following a widespread technology outage.
The biggest continuing effect has been on air travel. Carriers canceled thousands of flights on Friday and now have many of their planes and crews in the wrong place, while airports facing continued problems with checking in and security.
At the heart of the massive disruption is CrowdStrike, a cybersecurity firm that provides software to scores of companies worldwide. The company says the problem occurred when it deployed a faulty update to computers running Microsoft Windows, noting that the issue behind the outage was not a security incident or cyberattack.
Here’s the Latest:
Microsoft: 8.5 million devices on its Windows system were affected
Microsoft says 8.5 million devices running its Windows operating system were affected by a faulty cybersecurity update Friday that led to worldwide disruptions.
A Saturday blog post from Microsoft was the first estimate of the scope of the disruptions caused by cybersecurity firm CrowdStrike’s software update.
“We currently estimate that CrowdStrike’s update affected 8.5 million Windows devices, or less than one percent of all Windows machines,” said the blog post from Microsoft cybersecurity executive David Weston.
“While the percentage was small, the broad economic and societal impacts reflect the use of CrowdStrike by enterprises that run many critical services.”
Weston said such a significant disturbance is rare but “demonstrates the interconnected nature of our broad ecosystem.” Windows is the dominant operating system for personal computers around the world.
Austrian doctors’ group calls for better data protection for patients
In Austria, a leading doctors organization said the global IT outage exposed the vulnerability of health systems reliant on digital systems.
“Yesterday’s incidents underscore how important it is for hospitals to have analogue backups” to safeguard patient care, Harald Mayer, vice president of the Austrian Chamber of Doctors, said in a statement on the organization’s website.
The organization called on governments to impose high standards in patient data protection and security and on health providers to train staff and put systems in place to manage crises.
“Happily, where there were problems, these were kept small and short-lived and many areas of care were unaffected” in Austria, Mayer said.
Germany warns of scams after major IT outage
BERLIN — The German government’s IT security agency says numerous companies are still struggling with the consequences of a far-reaching technology outage.
“Many business processes and procedures have been disturbed by the breakdown of computer systems,” the BSI agency said on its website.
But the agency also said Saturday that many impacted areas have returned to normal.
It warned that cybercriminals were trying to take advantage of the situation through phishing, fake websites and other scams and that “unofficial” software code was in circulation.
The agency said it was not yet clear how faulty code ended up in the CrowdStrike software update blamed for triggering the outage.
European airports appear to be close to normal
LONDON — Europe’s busiest airport, Heathrow, said it is busy but operating normally on Saturday. The airport said in a statement that “all systems are back up and running and passengers are getting on with their journeys smoothly.“
Some 167 flights scheduled to depart from U.K. airports on Friday were canceled, while 171 flights due to land were axed.
Meanwhile, flights at Berlin Airport were departing on or close to schedule, German news agency dpa reported, citing an airport spokesman.
Nineteen flights took off in the early hours of Saturday after authorities exempted them from the usual ban on night flights.
On Friday, 150 of the 552 scheduled inbound and outbound flights at the airport were canceled over the IT outage, disrupting the plans of thousands of passengers at the start of the summer vacation season in the German capital.
German hospital slowly restoring its systems after widespread cancellations
BERLIN — The Schleswig-Holstein University Hospital in northern Germany, which on Friday canceled all elective surgery because of the global IT outage, said Saturday that it was gradually restoring its systems.
In a statement on its website, it forecast that operations at its two branches in Kiel and Luebeck would return to normal by Monday and that “elective surgery can take place as planned and our ambulances can return to service.”
Britain’s transport system still trying to get back on track
LONDON — Britain’s travel and transport industries are struggling to get back on schedule after the global security outage with airline passengers facing cancellations and delays on the first day of summer holidays for many school pupils.
Gatwick Airport said “a majority” of scheduled flights were expected to take off. Manchester Airport said passengers were being checked in manually and there could be last-minute cancellations.
The Port of Dover said it was seeing an influx of displaced air passengers, with hourlong waits to enter the port to catch ferries to France.
Meanwhile, Britain’s National Cyber Security Center warned people and businesses to be on the lookout for phishing attempts as “opportunistic malicious actors” try to take advantage of the outage.
The National Cyber Security Center’s former head, Ciaran Martin, said the worst of the crisis was over, “because the nature of the crisis is that it went very wrong very quickly. It was spotted quite quickly and essentially it was turned off.”
He told Sky News that some businesses would be able to get back to normal very quickly, but for sectors such as aviation it would take longer.
“If you’re in aviation, you’ve got people, planes and staffs all stranded in the wrong place… So we are looking at days. I’d be surprised if we’re looking at weeks.”
Germany airline expects most of its flights to run normally
BERLIN — Eurowings, a budget subsidiary of Lufthansa, said it expected to return to “largely scheduled” flight operations on Saturday.
On Friday, the global IT outage had forced the airline to cancel about 20% of its flights, mostly on domestic routes. Passengers were asked to take trains instead.
“Online check-in, check-in at the airport, boarding processes, booking and rebooking flights are all possible again,” the airline said Saturday on X. “However, due to the considerable extent of the global IT disruption there may still be isolated disruptions” for passengers, it said.
Delta Air Lines and its regional affiliates have canceled hundreds of flights
DALLAS — Delta Air Lines and its regional affiliates canceled more than a quarter of their schedule on the East Coast by midafternoon Friday, aviation data provider Cirium said.
More than 1,100 flights for Delta and its affiliates have been canceled.
United and United Express had canceled more than 500 flights, or 12% of their schedule, and American Airlines’ network had canceled 450 flights, 7.5% of its schedule.
Southwest and Alaska do not use the CrowdStrike software that led to the global internet outages and had canceled fewer than a half-dozen flights each.
Portland, Oregon, mayor declares an emergency over the outage
PORTLAND, Ore. — Mayor Ted Wheeler declared an emergency Friday after more than half of the city’s computer systems were affected by the global internet outage.
Wheeler said during a news conference that while emergency services calls weren’t interrupted, dispatchers were having to manually track 911 calls with pen and paper for a few hours. He said 266 of the city’s 487 computer systems were affected.
Border crossings into the US are delayed
SAN DIEGO — People seeking to enter the U.S. from both the north and the south found that the border crossings were delayed by the internet outage.
The San Ysidro Port of Entry was gridlocked Friday morning with pedestrians waiting three hours to cross, according to the San Diego Union-Tribune.
Even cars with people approved for a U.S. Customers and Border Protection “Trusted Traveler” program for low-risk passengers waited up to 90 minutes. The program, known as SENTRI, moves passengers more quickly through customs and passport control if they make an appointment for an interview and submit to a background check to travel through customs and passport control more quickly when they arrive in the U.S.
Meanwhile, at the U.S.-Canada border, Windsor Police reported long delays at the crossings at the Ambassador Bridge and the Detroit-Windsor tunnel.
U.S. filings for unemployment benefits rose again last week and appear to be settling consistently at a slightly higher though still healthy level that the Federal Reserve has been aiming for.
Jobless claims for the week ending July 13 rose by 20,000 to 243,000 from 223,000 the previous week, the Labor Department reported Thursday. It’s the eighth straight week claims came in above 220,000. Before that stretch, claims had been below that number in all but three weeks so far in 2024.
Weekly unemployment claims are widely considered as representative of layoffs.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in an attempt to extinguish the four-decade high inflation that shook the economy after it rebounded from the COVID-19 recession of 2020. The Fed’s intention was to cool off a red-hot labor market and slow wage growth, which it says can fuel inflation.
AP AUDIO: More Americans apply for jobless benefits as layoffs settle at higher levels in recent weeks
AP correspondent Shelley Adler reports filings for unemployment benefits have risen.
“The Fed asked to see more evidence of a cooling economy, and for the most part, they’ve gotten it,” said Chris Larkin, managing director of trading and investing at E-Trade. “Add today’s weekly jobless claims to the list of rate-cut-friendly data points.”
Few analysts expect the Fed to cut rates at its meeting later this month, however most are betting on a cut in September.
The total number of Americans collecting unemployment benefits rose after declining last week for the first time in 10 weeks. About 1.87 million Americans were collecting jobless benefits for the week of July 6, around 20,000 more than the previous week. That’s the most since November of 2021.
Continuing claims have been on the rise in recent months, suggesting that some Americans receiving unemployment benefits are finding it more challenging to land jobs.
And there have been job cuts in a range of sectors in recent months, from the agricultural manufacturer Deere, to media outlets like CNN, and elsewhere.
The four-week average of claims, which evens out some of the week-to-week volatility, rose by 1,000 to 234,750.
Strong consumer demand and a resilient labor market has helped to avert a recession that many economists forecast during the extended flurry of rate hikes. As inflation continues to ease, the Fed’s goal of a soft-landing — bringing down inflation without causing a recession and mass layoffs — appears within reach.
While the labor market remains historically healthy, recent government data suggest some weakening.
The unemployment rate ticked up to 4.1% in June, despite the fact that America’s employers added 206,000 jobs.
Job postings in May rose slightly to 8.1 million, however, April’s figure was revised lower to 7.9 million, the first reading below 8 million since February 2021.
Darden Restaurants is adding Tex-Mex to the menu.
The parent company of Olive Garden, LongHorn Steakhouse, Yard House and other chains, said Wednesday it’s buying Chuy’s for approximately $605 million.
Darden said it will acquire all outstanding shares of Chuy’s for $37.50 per share. Those shares closed at $25.27 apiece on Wednesday, then soared past $37 in after-hours trading once the deal was announced. Darden shares fell 1% in after-hours trading.
Darden said the boards of Darden and Chuy’s have unanimously approved the acquisition. The deal is expected to close later this year, if it’s approved by Chuy’s shareholders.
Chuy’s Holdings Inc. was founded in Austin, Texas, in 1982. It now operates 101 restaurants in 15 states and has 7,400 employees. It’s known for its eclectic decor and fresh food, including handmade tortillas and sauces.
Like Darden, Chuy’s owns and operates all of its restaurants. Darden President and CEO Rick Cardenas said Chuy’s is a differentiated brand with strong growth potential that will expand Darden’s dining options.
Darden, based in Orlando, Florida, operates more than 1,900 restaurants and has 190,000 employees. It also owns Ruth’s Chris Steak House, Cheddar’s Scratch Kitchen, The Capital Grille, Seasons 52, Eddie V’s and Bahama Breeze.
“Based on our criteria for adding a brand to the Darden portfolio, we believe Chuy’s is an excellent fit that supports our winning strategy,” Cardenas said in a statement.
Chuy’s Chairman, CEO and President Steven Hislop said the acquisition will accelerate Chuy’s business goals and expand the brand to more communities.
The deal comes as both restaurant companies have been struggling with a downturn in customer traffic due to consumer concerns about inflation.
In Darden’s fiscal fourth quarter, which ended May 26, same-store sales — or sales at restaurants open at least a year — were flat compared to the prior year. Chuy’s same-store sales were down 5% in its first quarter, which ended March 31.
Investment bank Jefferies downgraded shares for both restaurant chains earlier this month, saying they’re being squeezed by price promotions at fast-food chains like McDonald’s as well as at casual dining peers like Chili’s and Applebee’s.
