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Finance

THE ROLE OF FS IN A WORLD WHERE DATA PRIVACY IS KEY

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By Ashley Bill, Lead Solution Consultant, Micro Focus

 

In many ways, financial services has been a data-led industry since long before anybody would have considered using a phrase like ‘data-led’. From its earliest roots, the role of finance in society has involved tracking transactions, associating those transactions with individuals, and doing so in a way which is secure, robust, and trustworthy. Today, of course, the internet’s place at the heart of every day life means that businesses in all sectors are now striving for the same kind of implicit trust with customers which has always been critical for FS – and that shift is leading to some real changes in the value of data.

 

Privacy as a force for change

The new reality of data-led business is leading to new ideas around how businesses can and should work with customer data. Consumers are now familiar with the idea that businesses have a set of responsibilities regarding the data they hold. Both high-profile incidents in which data is lost or stolen and regulations designed to mitigate those risks, such as the GDPR, have led to a new set of expectations. Companies need to ensure that data is held safely, used for the right purposes, and disposed of once it is no longer needed.

The technological response to this challenge has been significant. Knowing what data is stored, where it is stored, and why it is being stored can often require not just additional software, but a fundamental restructuring of underlying systems. This constitutes a substantial investment, but the new data lifecycle tools and processes that have been put into place not only reinforce customer privacy, but also give businesses deeper insight into the data they hold.

This insight can be applied as a way of generating direct benefits from the expense of data lifecycle projects, giving businesses a more rounded view of their customers by connecting silos of data and making them available for analysis. In financial services, for instance, the need to identify all of the data held on a given customer also makes it easier to see how customers of one area of the business might go on to buy other products.

 

Ashley Bill

Data responsibility and social responsibility

However, there is another way in which data privacy compliance might deliver direct business benefits, which is all too often overlooked. Over the same period that responsible data usage has become a key concern for many businesses, we have also seen a broader sense of social responsibility come to the fore.

Corporate social responsibility (CSR) takes on a wide range of forms, from initiatives designed to improve how diverse and inclusive workforces are, to action that addresses climate change. CSR aims to make the world a better place, and improve the organisation’s reputation in the process. In a world where consumers are very willing to make purchasing decisions on ethical grounds, this can be just as valuable as proper data compliance for a business’s performance and resilience.

And, indeed, companies have in the past done good work aligning these two considerations. A good example is the Heartland Payment Systems data breach in 2008. In that case, the company went above and beyond the legal requirements by not only disclosing the leak, but actively working to help the industry as a whole prevent similar incidents in the future. As the financial services industry strengthens its data management capabilities and new ways of working with data propagate across sectors, the opportunity to publicise socially responsible data practices seems clear.

Examples like this are, however, rarer than one might imagine. On the whole, the link between privacy and responsibility is mostly made by web browsing and communications software that takes consumer privacy as its central remit. There are various possible reasons for this gap between what could be two very closely-aligned areas. Certainly, consumers’ desire for privacy is much more widespread than their willingness to take actions, such as using a password manager or reading end user license agreements, and it may be just that we haven’t yet found the right language to communicate a passion for privacy in a way that connects with customers.

 

The future of privacy in financial services

With society trending towards both an awareness of data issues and a demand for ethical corporate behaviour, though, this gap feels likely to close in the not-too-distant future – and financial services is likely to be a key area where we see this play out. While social media is perhaps the sector that people tend to entrust with the greatest quantity of personal data, financial services – alongside healthcare – certainly hold the most sensitive data that a person might share.

From this privileged position, financial services firms can take the lead by proactively helping people to manage and control the data they share with the world, and teach people about the efforts being made to ensure privacy within the business in the process. Establishing a data privacy value chain with B2B partners to make sure your firm is not only secure, but that every link along the chain is working to protect the consumer, likewise casts a halo that establishes the business as proactive, trustworthy, and ethical.

The world, after all, is now data-led – and becoming more so. It’s a good time for the original data-led industry to show leadership on how to do it responsibly.

Banking

LEGACY INFRASTRUCTURES MUSTN’T HOLD BACK INNOVATION IN FINANCIAL SERVICES

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By

Ian Perry, Principal Solution Architect at Zscaler

 

We are living in a changed world; one of hybrid home/office work and customers who may never return to bank branches and the services of the high street. According to RFi Group, 73 per cent of UK consumers interact with their main bank via digital banking at least once a week, and only 23 per cent believe nothing can replace what they get in a branch. Meanwhile, institutions including JP Morgan, HSBC and Nationwide have all indicated an intention to retain new higher levels of homeworking.

Now that employees work from a multitude of locations and customers bank and manage their money online the race is on to adapt processes, systems and support structures for safe, secure and productive homeworking and digital access for customers. Inevitably, this calls into question legacy infrastructures in financial services and how they might impact digital progress.

 

New tools, old systems?

The question is, how can banks and other financial institutions securely provide a higher level of remote access to their systems and applications when incumbent infrastructures were developed for an entirely different time?

Of course, the first thing to note is that banks aren’t coming at the problem from a standing start. Oft-cited legacy infrastructures have been added to over time so that many set-ups are now an on-premise/cloud-hosted hybrid. In fact, the finance sector has invested heavily in cloud infrastructures and cloud-based office applications.

The issue is how to harmonise this set-up so that it works for users and organisations as a whole. Here, there is work still to be done. It’s often the case that core banking applications remain in mainframe on-premise networks, whilst other operational tools reside in the cloud. Cloud-based Office 365 is a case in point. It supports digital working, as organisations need it to, but a range of its benefits and functions are at odds with legacy network setups.

Inevitably, when a product or service innovation reaches implementation planning stage, the starting point is the existing network, its systems and processes. The hard part is flipping this approach to assess what the resulting experience will be from the user point of view, but that is exactly what’s needed. It’s an approach that competing market disruptors have been ideally placed to adopt from day one.

However, that needn’t mean that financial institutions must completely overhaul their legacy infrastructure – something that would be expensive and complicated. They can still fully capitalise on the benefits of cloud-based services, among them flexibility, productivity, business continuity and the right customer and user experience.

 

Zero Trust without friction

One way is to take a ‘Zero Trust’ approach. As a result of recognised risks, 72 per cent of companies are prioritising the adoption of such a security model. This resets a data security approach from one that traditionally secured the perimeter to one that protects users, devices and business resources.

It’s a shift in emphasis from securing the network to securing each access and doing so without introducing friction into processes for users. We can think of legacy digital protection methods as a visitor getting a key from reception and being allowed to wander around the building, and compare that to a frictionless cloud experience in which a security guard shows the visitor directly to the room they need.

The Zero Trust model lends itself to high levels of remote access, which is exactly the situation organisations are now in. Employees work from anywhere, from a range of devices, and customers access services previously provided in-person online. Applications are no longer exclusively within the data centre, they are outside the network perimeter meaning that traffic must be enabled to run securely through the internet, rather than through corporate IT. Doing so not only equips organisations for the way things are today, it can also reduce the cost of individual site maintenance and enable the full benefit of cloud-based tools.

The technology now exists to make high levels of security completely invisible and so, with a growing number of security processes now taking place in the cloud, educating customers will be key. The industry must come together to improve user interfaces to signal what’s taking place behind the scenes.

With the right security approach, financial services can deliver on new access priorities to support their workforces and serve customers. Convenience, as well as security, should be the aim along with a strategy that ensures legacy doesn’t hold back innovation. That way, banks and other finance institutions can begin to fully capitalise on the benefits of cloud, adapt to meet customer demands as they evolve and compete in a disrupted market.

 

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Finance

HOW CFOS CAN TAKE A HOLISTIC APPROACH TO ENTERPRISE AGILITY

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By

Frederic Portal, Financials Product Marketing Director, at Workday

 

Whether brought on by a market shift, technological innovation or as we have seen over the last year, a pandemic, change in business is constant. But to survive it, or even thrive in it, organisations must find a way to adapt rapidly, while remaining strong and stable in the long-term. This is where enterprise agility and the CFO come into play. In theory, the concept of enterprise agility — a company’s ability to outperform the competition and drive growth in new, ambiguous situations by learning and adapting — sounds like something every business should inherently do. Yet, many are trying to introduce technology or implement processes before defining and establishing what agility really means to them as an enterprise. In other words, embracing agility should be a holistic approach and crucially must be led by the CFO. The CFO and financial team are instrumental in making sure that a business can lead digital transformation, steer through uncertainty and ultimately, embrace a culture with agility at its core. However, in order to achieve enterprise agility successfully, there are some simple factors that a CFO should consider when guiding their organisations to become truly agile.

 

Enterprise agility starts with the CFO

The last year made it clear that the finance function is leading business recovery. In fact, a Workday survey with C-suite leaders showed that 37 percent of respondents agree that finance is the function most likely to influence digital growth in a business. Overnight, CFOs and their teams had to rethink their processes and leave behind legacy technology in order to keep up with the continuous change that the pandemic now demands. Naturally this prompted a company-wide transformation.

To make sure this transformation towards agility doesn’t stop at technology adoption, CFOs should put practical steps in place, working in collaboration with all senior leadership, from IT to Sales and HR, to build a plan that will guide a wider change within the business. Once a plan is in place, it must be communicated and then reinforced to the rest of the workforce by providing them access to real-time data and cloud-based models. Led by the CFO, this will give crucial insight into payroll, cash flow and planning scenarios. In turn getting the entire organisation on board, creating uniformity and ensuring teams are all working from the same source of truth to move the business forward.

 

Embracing an agile mindset 

When incorporating new agile processes, CFOs must work with all business leaders to define and integrate an agile mindset. Enterprise agility isn’t just a process, it needs to be baked into the heart of the organisation — and its digital transformation agenda — so that teams across the business embrace qualities such as quick thinking, being perceptive and taking action. Adopting this way of thinking and behaving is the foundation for any agile organisation and must begin with the finance department.

Take Aon as an example. The multinational British professional services firm sells a range of financial risk-mitigation products, including insurance, pension administration, and health-insurance plans across 120 countries. By March 2020, COVID-19 resulted in the company’s entire team working from home, which meant Aon’s finance team had to do a fully-remote close. While this had never been attempted before, Aon had baked agility into its financial processes by investing in the right cloud-led, and agility enabling technology. With up to date data, and transparency across the regions, Aon’s finance team was able to close remotely, with one region even being able to close a day early.

 

Empowering agility 

Transparency and accessibility are also key to enterprise agility. So, it’s critical that CFOs empower all departments to work from the same data sources, assumptions and outcomes in their workflows. It is only by prioritising digital transformation and having technology structures up-to-date, that businesses can experience real results, and fast.

Take Netflix, for example. Even in this streaming powerhouse there were improvements to be made to back office processes. Netflix’s back office systems had usability issues due to clunky workflows and limited visibility. Led by the CFO and investing in transforming the back office into one unified system, Netflix was able to introduce an agile mindset across the business that was vital in turning this around. For instance, every time Netflix creates an original show or movie they have to create a legal entity and set up the banking and with Workday it just takes minutes to add it to an existing framework. Implementing the right technology resulted in more efficiency, more agility and fewer silos among the IT, Finance and HR teams.

 

Taking a holistic approach to enterprise agility

The disruption of 2020, and impact COVID-19 has had, is showing no signs of slowing down in 2021. It is simply no longer enough to just deploy new technology or processes with hopes of becoming  agile. In order for an organisation to truly embrace agility, it must take a holistic approach and proactively adopt an agile mindset across the entire organisation and its way of working. This is where the CFO plays a pivotal role.

 

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