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HOW TO KEEP YOUR PASSWORDS, FINANCIAL & PERSONAL INFORMATION SAFE IN 2020

FINANCIAL

Jan van Vliet, VP and GM EMEA at Digital Guardian

 

Keeping passwords, financial, and other personal information safe and protected from outside intruders has long been a priority of businesses, especially for those in the financial services industry. But it is increasingly critical for individuals to heed data protection advice and use sound practices to keep information safe and secure at home too, especially as people from all industries, including those that are heavily regulated, are working from home.

There’s an abundance of information out there for consumers, families, and individuals on protecting passwords, adequately protecting desktop computers, laptops, and mobile devices from hackers, malware, and other threats, and best practices for using the Internet safely. But there’s so much information that it’s easy to get confused, particularly if you’re not tech-savvy. Here is a top 10 list of simple, straightforward best practices and tips for keeping information private, and protecting devices from threats.

 

1. Encryption

Data encryption isn’t just for technology geeks; modern tools make it possible for anyone to encrypt emails and other information.

 

2. Backup your data

One of the most basic, yet often overlooked, data protection tips is backing up your data. Basically, this creates a duplicate copy of your data so that if a device is lost, stolen, or compromised, you don’t also lose your important information.

Additionally, while you should use sound security practices when you’re making use of the cloud, it can provide an ideal solution for backing up your data. Since data is not stored on a local device, it’s easily accessible even when your hardware becomes compromised.

 

3. Use two-factor authentication

Two-factor authentication is an additional layer of security that provides protection in the event that a hacker guesses or cracks your password. Two-factor authentication requires a second verification step, such as the answer to a secret question or a personal identification number (PIN). You should opt for two-factor authentication when given an option.

 

4. Turn your computer off

You’d probably never think twice before logging off for the day and just putting your computer into sleep mode. But when you’re finished using your computer or laptop, you should power it off. Leaving computing devices on, and most often, connected to the Internet, opens the door for rogue attacks.

 

5. Encrypt data on USB drives and SIM cards

Encrypting data on your removable storage devices can make it more difficult (albeit not impossible) for criminals to interpret the data should your device become lost or stolen. USB drives and SIM cards are excellent examples of removable storage devices that can simply be plugged into another device, enabling the user to access all the data stored on it. Unless, of course, it’s encrypted.

 

6. Don’t forget to delete old files from cloud backups

If you’re diligent about backing up your data and use a secure cloud storage service to do so, you’re headed in the right direction. That said, cloud backups, and any data backups really, create an added step when it comes to deleting old information. Don’t forget to delete files from your backup services in addition to those you remove (or overwrite) on your local devices.

 

7. Use secure passwords

It might seem like a no brainer, but password hygiene is the simplest, but often most overlooked, layer of protection. Passwords can be easily cracked by hackers, particularly if you don’t use sound password-creation practices. The best passwords contain uppercase and lowercase letters, numbers, and special characters. You should also avoid using easily guessed words or alphanumeric combinations, such as the names of children or pets, birth dates, addresses, and similar information that can be easily guessed by someone looking at your Facebook profile or through a Google search.

 

8. Be overly cautious when sharing personal information.

This tip applies to both the online and offline worlds: there are many impostors who attempt to trick the unsuspecting into giving out sensitive information by pretending to be the bank, credit card company, or other reputable entity. This can happen by phone or online, via phishing emails or websites designed to mimic the authentic company’s look and feel.

Be vigilant and ask: Who is asking for your personal information, such as your national insurance number or credit card information? Why do they need it? How will they use it? What security measures do they have in place to ensure that your private information remains private?

 

9. Don’t forget to sign out

Signing in to online services is necessary when you need to access your personal accounts, but many users forget to sign out when they’re finished using a service. Even the Google Safety Center warns,”But when using public computers like in a cybercafe or library, remember that you may still be signed into any services you’ve been using even after you close the browser. So when using a public computer, be sure to sign out by clicking on your account photo or email address in the top right corner and selecting Sign out. If you use public computers often, use 2-step verification to help keep your account safe, and be extra careful to sign out of your accounts and shut down your browser when you have finished using the web.”

 

10. Don’t open emails from people you don’t know

This is 101 but it is also so easily accidentally done. If you receive an email from a source or individual you don’t recognise, don’t open it, and definitely avoid clicking any links or file attachments. Almost everyone gets the occasional email from their bank, financial institution, or similar accounts and services. But to be safe, you should always open a browser window and type the URL in the address bar, rather than click on links in emails. Why? Phishing emails are one of the most common ways hackers obtain personal information, tricking users into inadvertently handing over their login credentials to bank accounts, credit cards, and other accounts where they can glean further information, make unauthorised purchases, or even steal your identity.

 

Finance

FIDUCIARY MANAGEMENT

by Devan Nathwani, FIA and Investment Strategist at Secor Asset Management

 

Defined Benefit pension schemes are one of the most significant institutional investors, representing c.£1,700 billion[1] in assets. With investments becoming increasingly more complex, regulatory and reporting requirements increasing and markets generally being volatile, making investment decisions is taking up more of the governance budget. This has been further highlighted in the recent Covid-19 crisis where pension schemes were faced with falling equity markets, collateral calls and new investment opportunities arising from market dislocations. Corporate sponsors saw their pension scheme deficits widen at a time when free cash flow was needed to maintain working capital. There is a vast array of investment or de-risking products that claim to have low governance requirements, however often they can require giving up investment freedom and transparency or have high costs. This is where partnering with a Fiduciary Manager can help.

 

What is Fiduciary Management?

Fiduciary Management is essentially a form of delegated investment decision making. Fiduciary Managers partner with pension schemes to give advice on scheme investments and are responsible for the implementation of that advice. Fiduciary Management relationships are often highly customised and do not have to be “all or nothing”. A simple Fiduciary Management partnership could involve a Fiduciary Manager managing a fund-of-hedge-fund portfolio. A more comprehensive partnership could involve a Fiduciary Manager using their investment expertise to make investment decisions on the entire scheme portfolio. In practice, these partnerships can take many different forms and the best relationships are often highly customised, be it in the services received, the portion of the assets covered or the decisions that are delegated.

 

Devan Nathwani

Why Fiduciary Management?

Every pension scheme is different and in practice will choose to partner with a Fiduciary Manager for different reasons. Some common reasons for partnering with a Fiduciary Manager are:

Independent investment expertise

Over the last 10 years pension scheme investments have become increasingly more complex, with alternative asset classes becoming a core component of the strategic portfolio. Asset classes such as Private Equity, Private Credit and Property require in-depth knowledge of the different strategies deployed within them and often require portfolio management expertise to deal with capital calls and distributions and the sizing of commitments. Independence can be crucial here as these asset classes often carry high investment fees and require careful investment due diligence. A Fiduciary Manager typically has deep investment experience in a broad set of asset classes that a pension scheme can in-source without the cost of building an in-house team. Independence can be very important as a Fiduciary Manager that has no association with the underlying managers that a pension scheme invests with, can make investment decisions with minimal conflicts of interest.

Precision and speed

As highlighted by the market impact following the Covid-19 pandemic, it is important for pension schemes to be able to implement their investment decisions with speed and precision. Markets move every single day and investment opportunities can often arise and pass more quickly than a typical pension scheme governance structure can tolerate. Risk management is one of the most important objectives for a pension scheme, with unrewarded risks needing careful management and rewarded risks needing to be sized appropriately. Fiduciary Managers monitor their client portfolios daily and can act quickly to take advantage of investment opportunities or rebalance the portfolio as markets move.

Transparency

As regulatory requirements have increased, pension schemes are increasingly being asked to monitor their investment decisions with more scrutiny. Regulation requires them to consider Environmental, Social and Governance (ESG) factors in their investment decisions and understand the performance of their investments in detail, including the impact of explicit and implicit transaction costs. In addition, as funding levels improve, pension schemes and their sponsors are looking for tighter control and greater transparency over the scheme’s risks. This is particularly important as schemes approach their desired “End Game”. Good Fiduciary Managers typically have proprietary tools and systems that facilitate better performance and risk measurement. As regulations form and evolve, Fiduciary Managers adapt their investment decision making processes to account for them making compliance much easier.

Limited resources

Typically pension schemes and their sponsors have limited internal resources with limited time to spend on both investment and non-investment related matters. Most companies do not have dedicated pensions treasury teams so it can be difficult to devote the sufficient time that is required to both monitoring investment performance and making investment decisions. Where new asset classes are added to a pension scheme’s portfolio, additional training may be required which can take a considerable amount of time, particularly for more complex asset classes. Partnering with a Fiduciary Manager can supplement any existing governance structure by re-focusing pension scheme resources on more strategic matters.

Accountability

Pension schemes typically receive advice from investment consultants who do a good job of advising on strategic matters but are ultimately not accountable for the performance and the outcome of that advice. Pension scheme representatives are increasingly looking for their advisors to be accountable for their advice and the performance relative to the liabilities. Fiduciary Management solutions typically focus on liability relative scheme performance and are governed by the GIPS Fiduciary Management Performance Standard, to ensure a consistency in performance measurement.

Value for money

Fiduciary Management relationships are often all-encompassing and typically cover all investment related matters for the pension scheme. Through economies of scale, Fiduciary Managers negotiate more favourable asset management fees on behalf of pension schemes and are able to get schemes of all sizes access to investment opportunities that would historically only be available to larger schemes. The combination of investment expertise and accountability under a single Fiduciary Management solution, is expected to deliver better funding and performance outcomes which ultimately offers better value for money.

 

Why now?

Fiduciary Management as an investment solution is arguably more relevant today than historically. The recent crisis has highlighted the need for an investment partner who can help manage the downside risks associated with investing in equities, manage the collateral behind important hedges and take advantage of market dislocations. Many corporate sponsors will have seen their pensions contributions eroded and balance sheet deficits widened during the Covid-19 market crisis and a Fiduciary Management partner could have helped better navigate the volatility.

As corporate sponsors begin to consider the “End Game” for their DB pension scheme, they are increasingly faced with the dilemma of entering low-governance investment solutions that may be poorly constructed or paying an insurance premium to “Buy-out” the scheme.

Solutions such as Cashflow Driven Investing (CDI) tend to overemphasise portfolio construction to be based on uncertain cashflow profiles, and excessively exposing the pension scheme to risky credit allocations, which in a post Covid-19 world could expose pension schemes to adverse funding outcomes.

For corporates who prefer to avoid a large cash lumpsum payment for insurance-based buy-outs, a Fiduciary Manager can offer an alternative solution to reaching the required funding level for such a transaction to take place. By slowly growing the asset base while carefully managing risks, pension schemes can become buy-out ready allowing their sponsors to reinvest free cashflow in existing or new business lines.

Partnering with a Fiduciary Manager today could give pension schemes the tools to better manage the next crisis and offer more flexibility in reaching the desired End Game.

 

[1] The DB Landscape – Defined Benefit Pensions 2019 – The Pensions Regulator dated January 2019

 

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TIME TO THINK OUTSIDE OF THE BLACK BOX

Mike Brockman, CEO, ThingCo

 

If you have the unbridled joy of parenting a teenager you’ll probably know what telematics insurance is.  In very simple terms, telematics or ‘black box’ insurance enables insurance companies to track driving behaviour using technology fitted to the car or via a smartphone app.  It is the first practical example of IoT – machine to machine communication of real-time data.

Telematics has been crucial to helping thousands of young people get experience on the road who would otherwise have found the cost of insurance too high.  When you look at the number of road casualties in the UK over the last nine years there is a clear correlation between the rising adoption of telematics and a fall in young driver casualties[i].  The problem is that as soon as they can, young drivers chuck in telematics and take traditional insurance.  As such telematics insurance has got stuck firmly in a rut.

So why is that a problem?

First, telematics saves lives – think what it could do if more drivers had it.

Secondly motor insurance costs are linked to claims costs – if we can bring down the cost of claims through the engagement, speed of response in accidents and anti-fraud benefits of using telematics data to its full potential, everyone could access cheaper insurance.

Mike Brockman

Thirdly we are living in a world deeply impacted by COVID-19.  Travel trends were already altering prior to the pandemic but have changed and could remain significantly changed for the foreseeable future.  Consumers are beginning to think more deeply now about their motor insurance and value for money.  This may create demand for motor insurance cover that is more responsive to people’s individual driving behaviours – why pay an annual premium when you only use the car once or twice a week?  On the flipside, those nervous of using public transport could see an increase in their car use.  Telematics allows insurance providers to offer insurance based on actual rather than predicted use.

The fundamental reason for telematics getting stuck in a rut is insurance companies are not offering something consumers actually want and they are not deriving value from their investment in the technology.  Different telematics devices give different qualities of data and that data determines the economic equation they have to resolve in terms of how much they pay for the technology and what value they get from it.

Another key factor is that if you give something away – as the insurance industry has done with telematics ‘black boxes’ – you are sending a strong signal to the customer that the technology is of no value to them and only there to serve the insurer’s need.

You need to make the device a desirable piece of technology that consumers would value in their own right – rather than something that is imposed on them to get cheaper insurance.   By introducing new technologies into these devices such as Voice, camera, ADAS, black spot warnings, it becomes a truly connected device that not only helps the driver but also creates incredible amounts of data that’s useful to the insurer to manage risk and provide better customer services.

With next generation telematics, the data is no longer a one way street direct into the insurer.   You can feed that data back to the customer and develop additional services such as a voice alert when they have been driving for too long without a break, an incentive of a coffee at the next rest-stop.

Telematics also transforms the claims process for the customer and the insurance provider. A crash alert can kick in and activate a voice command in the device and that will ask the driver if they had an accident, whether they need help and will alert emergency services if necessary.

This is where the data brings huge value to the insurance provider providing a whole range of detail – like a liability assessment, video footage, fault, g-force etc.  This data is dynamite to First Notification of Loss team with an insurance provider.

But the biggest difference next generation telematics offers is it really strengthens the relationship with customers and insurers can make it fun as well.  Insurance and fun aren’t usually two words you see in the same sentence but unlike traditional insurance, or old school telematics, it allows engagement and the opportunity to provide incentives without any big brother feeling about it.

Technology has changed massively over the last ten years, the quality of devices has developed and the Cloud has opened the potential for telematics products to be designed for customers in the most attractive way.   Barriers around trust and big brother can be broken down by being absolutely clear that the data belongs to the driver – they can choose how it is used to their benefit, spelling out the advantages, being transparent and flexible.

COVID-19 is providing an opportunity to stand back and think about telematics differently – how to make it customer friendly and how to make the economics work.  By leveraging next generation telematics technology the insurance market has a window of opportunity to turn the motor insurance grudge purchase into something consumers really start to value.

 

[i] https://blogs.lexisnexis.com/insurance-insights/2019/04/the-road-to-safer-driving-infographic-how-telematics-can-be-directly-linked-to-reducing-casualties/

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