Connect with us

Top 10

10 TRENDS DIRECTORS NEED TO KNOW AS 2020 APPROACHES

Published

on

WomenCorporateDirectors Names Key Digital, Legal, and Employee Concerns

  

Heading into fall with eyes on 2020, corporate boards should brace for the increasing impact of digital migration, artificial intelligence (AI), and cultural shifts on their companies – and what this means for their role as directors, says WomenCorporateDirectors Foundation (WCD). “Trends point to a very different reality for boards today than five or ten years ago,” says Susan C. Keating, CEO of WCD. “With boards asking more questions of management and exercising more oversight in areas that were once fully ‘owned’ by the leadership team, directors require much more real-time information and awareness than ever before.”

 

Opportunities and risks around emerging technologies and what companies can expect from their workforce, investors, and other stakeholders as far as changes to corporate culture were themes at the WCD Global Institute in Silicon Valley – a sold-out event that is WCD’s largest annual gathering of its members. WCD members serve on the boards of public and large, privately held companies. Nearly 300 board directors, CEOs, and experts on governance and digital, legal, and regulatory matters convened at the Hewlett Packard Enterprise headquarters this spring in San Jose, CA, to explore urgent and emerging developments and concerns for boards.

 

From the discussions, WCD has identified ten trends that are key to board agendas for fall and 2020 – a quick summary of each, with insights from experts featured on relevant panel sessions, follows.

 

10 Trends Directors Need to Know as 2020 Approaches

 

  1. Increasing need for a “digital trust bank.” “An increasing reliance on digital platforms requires us to have a ‘digital trust bank’ to use when things fail, because things will,” says Shamla Naidoo, Global Chief Information Security Officer at IBM. “To build this digital trust, we need to communicate thoughtfully with our customers. We need them to understand that, just like everything else in the world, digital is not perfect – it can fail. But we need them to know that we are not reckless or careless in our decisions. Whether it’s a data breach or an e-commerce failure, we must engage transparently and quickly with customers to show them that we understand the issues and that we take proactive actions where we can and we react quickly where we must.”

 

  1. Persistence of demand for digital currency. “The hardest thing to understand for the vast majority of even the most sophisticated investors is why 100 million people are buying and trading Bitcoin,” says Matthew LeMerle, co-founder and managing partner of Fifth Eraand Keiretsu Capital. “It’s because we have the dollar, the euro, the British pound – all high-quality, reasonably secure, trustworthy currencies that basically maintain their value. But about four billion people in the world do not. Argentina’s peso lost half its value vs. the dollar last year, with one 2-day period down 22%. Indians had all their big bank notes declared worthless – in an economy where 95% of transactions were made in cash. Living in an unstable country may mean having to get out quickly and leaving the money in your bank accounts behind. When your wealth is tied up in these situations, the notion of a secure, usable, digital currency vs. a fiat currency is of enormous value.”

 

  1. Stronger need for boards to push management on technology advancement. “Instead of reacting to what management puts in front of us, boards will need to dig deeper into where the resources and effort are going around the company’s technology initiatives,” says WCD Colombia chapter chair Olga Botero, a director at Evertec, Inc.; founder and managing director, C&S Customers and Strategy; and senior advisor at the Boston Consulting Group (BCG). “We need to ask three questions: What’s the technology that puts us at risk? What are the new technologies we need to keep current and not lose competitiveness? And what new technologies are we not really sure about, but should be experimenting with? Many companies do not spend any money on experimentation and trials. But we need to do more of this because we might find technology that will make sense for our business and help us break ahead of competitors.”

 

  1. Higher risk of anti-trust liability with AI. “There’s a big discussion in the antitrust world about whether AI will be used to collude.” says Maureen K. Ohlhausen, a partner at Baker Bottsand former acting chair of the Federal Trade Commission. “Will two algorithms operating separately in two different companies eventually come to a collusive price? Will this be considered price-fixing? Issues around ‘tacit collusion’ and the true intent of the company in designing pricing algorithms have challenged courts and regulatory agencies, and the lack of black-and-white rules around this will continue to challenge boards and management.”

 

  1. Rapid leaps in AI functionality creating need for guard rails. “Companies are using AI across a broader range of functions – from saving staff time to mitigating subconscious human bias in business processes,” says Nancy Calderon, Global Lead Partner, KPMGLLP; director, Global Delivery Center, Ltd., KPMG India; director, WCD Foundation. “But the exponential benefits that AI increasingly provides must not outweigh the need for governance around its use – and the actual outcomes. For example, a company implemented an AI program to reduce subjectivity in hiring. But the company found that rather than getting rid of bias, the AI program taught itself to prefer male candidates, and automated the bias. This highlights how managers and programmers, from the start, have to consider the assumptions programmed into the AI. Boards will increasingly have to ask management: What guard rails are in place? Even if the intent is good and it sounds like a great business decision, what are the risks?”

 

  1. Broader application of artificial intelligence in cybersecurity.“There is a wide gap in the level of knowledge among companies and how AI can be used to mitigate risk,” says WCD member Nelda Connors, a director at Boston Scientific Corp, Delphi Technologies, Enersys, and Echo Global Logistics. “While AI is the hot topic when thinking about products and services, many companies are not yet at a place of exploring AI for their cybersecurity efforts. But if there is risk that AI can help mitigate, it’s important to identify this. Boards can help move the company to the next level of thinking around AI by asking these questions of management.”

 

  1. Less fear among employees about machine replacement of jobs.“There’s a tendency for people to fear AI as something that’s going to replace them, but companies are changing how they talk about AI with their workforce,” saysEmma Maconick, a partner leading the data privacy and cybersecurity practice at Shearman and Sterling. “Employers are shifting from using the term ‘artificial intelligence’ to ‘augmented intelligence,’ where the human is intentionally kept in the loop. We need more, not fewer, people who can work with AI. The war on talent is not going away – there is an acute shortage of data scientists in the U.S. We need to broaden our perspective and plug into tech-savvy talent pools across the world.”

 

  1. People risk continues to be as important as technology risk.“Technology won’t save us from fraud,” says Claudia F. Munce, a director at Best Buy Corporation, Bank of the West/BNP Paribas, and CoreLogic Inc. “Many companies who are on the digital leading edge think in bits and bytes. They forget that most of the insider threats come from a physical form – someone walking out the door with a laptop. At the highest levels, you really need to understand the people dynamic in your core team and how employees perceive the sense of fairness at the company. But tech can be used as a tool to see things more clearly. It can spot patterns of incidents or behavior that are predictive of insider fraud.”

 

  1. Growing risk around the next level of #MeToo lawsuits.“A couple of years after the headlines and lawsuits prompted many companies to make changes, you can see how the reactions of certain employees reveal the true culture of a company and will lead to the next level of #MeToo,” says Vanessa Griffith, partner, Vinson & Elkins LLP. “Even in companies taking progressive measures, I’ve seen situations in which #MeToo has exposed fault lines within the organization. Some employees are showing their lack of trust in their colleagues, in the system, in management by saying: ‘Well, now I’m not going to mentor women, or be alone with women or travel with them.’ They are opening up themselves and the firm to discrimination claims from women who have had their careers negatively impacted by a refusal of men to take on appropriate roles of sponsorship and mentorship. So they’re trading claims of harassment for claims of discrimination or retaliation somewhere down the road.”

 

  1. Oversight of culture now a permanent part of the board’s brief.“Culture affects a company’s tolerance for risky behavior, and boards are moving from a passive oversight role to being much more active in guiding management,” says Ora Fisher, Vice Chair, Latham & Watkins. “For one, it’s management’s responsibility to implement the culture, but what if management is engaging in the risky behavior? I would be worried if management is strongly resistant to board oversight and regular reporting; that’s a dangerous red flag. Boards have potential legal liability for the risks, and are also able to see things going on at a company that management may miss because they are seeing it every day and it doesn’t register, or are more challenged than some due to the constant pressures of their jobs.”

 

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Mitigating the insurance risks of climate change through geospatial data visualisation

Published

on

By

Richard Toomey, Senior Manager, Commercial Insurance at LexisNexis Risk Solutions UK and Ireland

 

In the lead up to the 26th United Nations Climate Change Conference of the Parties (COP26)[i] November 2021, A United in Science report[ii]  provided a stark warning of the impact and acceleration of climate change. The UK Environment Agency also warned of more extreme weather leading to increased flooding and drought[iii]. While some progress was made at the conference, understanding the changing risks created by extreme weather to price property insurance more effectively, and more importantly, to help mitigate the physical risks posed by climate change, has become imperative.

Mapped geospatial data intelligence including live data on flood warnings and river flows, viewed alongside data held by insurance providers on the properties in their portfolio, can be a key ally in helping to protect customers and reduce claims losses created by extreme weather events.

With the air temperature rising and heavy rain becoming more and more frequent due to climate change insurance providers are looking to identify properties that are more at risk than others. For example, properties with basements carry more of a substantial risk of surface water claims than others and especially in London where space is tight and water runoff is low. In the autumn of 2021, the industry saw a number of high value claims due to basement flooding. There are some really large high net worth (HNW) households with big basements which carry a significant insurance risk.  The problem is that in many cases insurance providers don’t know if they have a property ‘on cover’ that actually has a basement.

The huge and growing volume of data now available to the insurance market to assess property risk to the level the industry needs, could easily overwhelm and prove a barrier to the swift decisions needed in weather-related surge events. However, the evolution of desktop based geospatial data visualisation tools such as LexisNexis® Map View means insurance providers can make quick, informed decisions based on a picture or map of risk, looking at a specific geographical region, a postcode, an address or a single property outline.

They can look at environmental risks including flood, fire and subsidence and live flood data updated every 15 minutes direct from the Environment Agency, as well as highly predictive flood risk data from respected flood modelling organisations. Insurance providers can also bring in data on the characteristics of a property to understand more about its construction, including the type of roof it has, how many floors there are, the square footage, as well as further data on the location and the individuals behind a business to gain a more holistic understanding of risk for pricing.

Mapping of historical flood data brings a further dimension to the understanding of risk, revealing the maximum extent of all individually recorded flood outlines from rivers, the sea and groundwater springs in England and Wales. This takes into account the presence of defences, structures, and other infrastructure where they existed at the time of flooding and includes floods where overtopping, such as at seawalls, river breaches or blockages may have occurred.

But the real step-change for the market has been recent ability to view live flood and other environmental data in tandem with customer and policy data held within an insurance providers’ own databases.

Crucially, this means insurance providers can pinpoint down to individual properties, the policyholders most at risk as weather events unfold, should a river burst its banks, or a flood barrier fail and those properties that may actually be vacant at the time of the event.

Through data visualisation tools, insurance providers can gauge where flood water may go so that policyholders can be warned to take measures to protect themselves, their possessions and to move any vehicles to higher ground. They can even see where roads may have been closed due to fallen trees. All this intelligence helps with planning on the ground resources, working with local authorities and claims adjusters. Then, in the immediate aftermath, rather than wait for a deluge of claims, insurance providers are in a position to reach out to customers known to be in areas affected to support them through the claims process.

The inherent flexibility of today’s geospatial data visualisation tools for the insurance market means risk can be assessed as needed or as constant monitor for a whole commercial property portfolio. Fundamentally these tools are designed to streamline the assessment of property risk.

In the future, commercial and residential property claims data gathered from the whole of the market may allow insurance providers to look at a whole portfolio alongside past claims, but for now they can bring in their own claims data to build a more granular picture of risk, to price more accurately and understand how they could help mitigate future claims and potential losses caused by weather events.

A picture can say a thousand words and data visualisation tools can certainly make highly complex risk data easy to understand and act upon. Being able to instantly visualise an environmental risk to policyholders – day or night – using highly granular data on past and present flood events puts insurance providers in a more powerful position to reduce the misery and costs caused by extreme weather.

[i] https://ukcop26. org/wp-content/uploads/2021/07/COP26-Explained. pdf

[ii] https://public. wmo. int/en/media/press-release/climate-change-and-impacts-accelerate

[iii] https://www. gov. uk/government/news/adapt-or-die-says-environment-agency – The Environment Agency’s third adaptation report October 2021

 

Continue Reading

Top 10

From compliance to the metaverse: Investment trends to look out for during the year ahead

Published

on

By

By Rami Cassis, Founder and CEO of Parabellum Investments

 

In the investment world, the old saying, knowledge is power, has never been more pertinent. As any investor will testify, it is essential to retain an in-depth, and up to date, understanding of news, predictions and trends that specifically relates to his or her specific area of interest.

This is particularly true for investors in the financial sector.

We all know just how quickly the sector can change beyond recognition. The demands of consumers are forever changing, new technology is always waiting in the wings to re-write the financial status quo and the next big digital company is constantly looking to increase its market share. There is always a new trend to look out for.

As we move into a brand-new year and prepare to face the opportunities – and challenges – that doubtless lie ahead, these are some of the trends that are likely to develop during the next 12 months.

 

Personal banking conversations

In its Tech Trends 2021: A financial services perspective Deloitte states that today’s pioneering companies are using advanced digital technologies, virtualized data, and cobots to transform supply chain cost centres into customer-focused, value-driving networks, based around a personal experience.

The concept of personal banking provides a perfect example of how the financial services sector has evolved to deliver digital personal banking.

Before the digital banking revolution, personal banking involved a visit to a high street branch to sit down with a personal banker in the flesh. This personal banker would be the customer-facing, end point of a complex supply-chain, involving training centres, degree courses, carbon-emitting journeys into work – the list goes on.

Compare this to the current version of personal banking. Digital financial services firms such as Monzo have revolutionised banking thanks to sophisticated analytics and a personalised interface. The big banks are now catching up, offering their own versions of ‘modern’ banking insights for the everyday user, and furnishing them with the latest online, smartphone-powered gadgets to enable them to manage their money 24/7, wherever they might be in the world.

However, even this is now becoming somewhat stale, with many financial services providers still seeing personalization simply in terms of personalized messages. Instead, the next chapter will involve smart banks understanding that good personalization requires personalized conversations, not just messages.

Enterprise software is one of the specific investment interests of Parabellum Investments. One of our portfolio companies is ieDigital, a specialist UK financial technology provider. The team from ieDigital and Parabellum Investments analyses the latest developments in business technology regularly.

We understand the importance of pushing digital boundaries. Indeed, one eye should constantly be scanning the horizon to identify the digital tools that the customers of tomorrow will expect. The interpretation of digital transformation is specific to each organisation and translating technology into practical business outcomes requires the focused specialism the combined IE Digital & Parabellum Investments team is qualified to deliver.

We understand – and see daily – the pressure that banks are coming under to deliver an ever more personal service, and see the ability to deliver these personal conversations is one of the trends to watch during the next 12 months.

 

The metaverse

The word ‘metaverse’, is defined in the Oxford English Dictionary as a “virtual-reality space in which users can interact with a computer-generated environment and other users”.

When Facebook changed its name to Meta in 2021 it may have come as a surprise to many of the platform’s users, but it was a major moment in the company’s history. It signalled Mark Zuckerberg’s ambitions for his business; to be the leader in the development of the metaverse.

Indeed, the future of the metaverse is looking sophisticated and bright. With giants like Facebook and Microsoft introducing metaverse elements into the fabric of their business models, it’s a concept that cannot be ignored, and one which is likely to expand rapidly throughout the next 12 months.

Returning to the financial services sector as an example, in a blog post titled Metaverse, the end of banking digital transformation?, CoinYuppie speculates that the metaverse will change banking in a number of ways including:

  • Identify verification. In the metaverse, identity verification will be performed via VR glasses and Metaverse sensor devices which contain a security chip.
  • Real-time creation of financial products. In the meta universe, virtual product managers use gestures to drag and drop the entire process of digital product manufacturing.
  • Games and attractions become a source of bank traffic. You can open branches on Mount Everest, in the Tarim Basin, on the Kunlun Mountains, or in Jiuzhaigou. The bank will combine these magnificent landmarks to fully personalize its branches and display its products.

This is just the financial services sector. Just imagine the opportunities for other industries – and the tools that will be needed to deliver them.

People are likely to need virtual-reality headsets, for example, together with related components such as sensors, as virtual-reality technology becomes intrinsically linked with the metaverse world.

 

Compliance

Another key trend to look out for as we move into 2022 and beyond is how companies deal with their compliance issues.

In the wake of the global Covid pandemic, we are seeing a much-increased hybrid working model, with a large proportion of the workforce now based at home. This creates a logistical headache for compliance teams, who must now ensure that sensitive data and company secrets remain just that, despite a workforce now using multiple digital platforms, messaging systems, mobile phones and landlines.

Cloud-based archive systems that can capture multi modal communications are likely to become essential for companies to remain compliant.

 

Alternative currencies

Cryptocurrencies are likely to retain their position as one of the most talked about developments in the world of alternative currencies.

As an example, Bitcoin has risen nearly 70% since the start of 2021, driving the entire crypto market to a combined $2 trillion in value. However, heightened regulatory scrutiny and intense price fluctuations have somewhat dampened bitcoin’s prospects in recent months.

Despite this, we are likely to see banks increasingly looking at offering mainstream crypto services. We have already seen the start of this, with the first major crypto company going public with the debut of Coinbase in April, increased participation from Wall Street banks like Goldman Sachs, and the approval of the first U.S. exchange-traded fund linked to bitcoin.

 

Conclusion

We all know how quickly the financial sector changes. If you happen to be reading this just a few months after it was written, several of my points might now be in the mainstream – or they might be completely obsolete.

The fact is that unless an investor possesses superhuman powers, it is impossible to identify, with 100 per cent accuracy, what the next big investment trend is. All we can do is use our experience, insights, and up-to-date sector knowledge to predict what the next big trends are likely to be.

 

Continue Reading

Magazine

Trending

Business6 hours ago

Mitigating the insurance risks of climate change through geospatial data visualisation

Richard Toomey, Senior Manager, Commercial Insurance at LexisNexis Risk Solutions UK and Ireland   In the lead up to the...

Top 106 hours ago

From compliance to the metaverse: Investment trends to look out for during the year ahead

By Rami Cassis, Founder and CEO of Parabellum Investments   In the investment world, the old saying, knowledge is power,...

News6 hours ago

NutreeLife triples production with finance from Siemens Financial Services

Plant-based snack manufacturer NutreeLife has massively increased its production capacity with the help of a hire purchase solution from Siemens...

News1 day ago

HYDR DEVELOPS INVOICE FINANCE PLATFORM TO INTEGRATE WITH MAJOR CLOUD ACCOUNTING SOFTWARE PROVIDERS

MANCHESTER – UK – 17th January 2022 – Fintech start-up, Hydr has developed its proprietary invoice finance platform to integrate...

Business1 day ago

What should you be know about PAN data in PCI DSS?

Narendra Sahoo (PCI QSA, PCI QPA, CISSP, CISA, CRISC) is the Founder and Director of VISTA InfoSec   Introduction PAN...

Finance2 days ago

GET READY FOR A LARGER-THAN-EXPECTED INTEREST RATE SPIKE IN 2022

By Nicholas Sargen As investors assess what is in store for 2022, they should not lose sight of what has transpired...

Banking2 days ago

MYTH BUSTING THE ROLE OF OPEN SOURCE IN FINANCIAL SERVICES

Nigel Abbott, Regional Director North EMEA, GitHub   There is no denying the financial services (FS) industry is under pressure to...

Business2 days ago

How Crypto Traders Can Avoid Unexpected Expenses

Have you been dabbling in cryptocurrency in 2021? Are you still relatively new to the world of crypto and feeling...

Finance2 days ago

Looking Ahead: 2022 Fintech Predictions and Reflections

Will Marwick, CEO of IFX Payments   2021 was the year of recovery and opportunity for many, following months of...

Business2 days ago

A systematic approach to stock selection finnCap’s Slide Rule

Raymond Greaves, Head of Research at finnCap   As an engineer by background, I love data and using it to...

News2 days ago

The UK’s Crypto and Digital Assets Group will be welcomed, but it needs to reach out to the industry

by Jennifer Clarke of regtech CUBE   The advent of the Crypto and Digital Assets Group will be welcomed with...

Finance2 days ago

EMBEDDED FINANCE EXPERIENCES, THE BIG MOVE IN 2022

By Louisa Murray, Chief Operating Officer UK & Europe at Railsbank Over the past year, we have seen some fundamental...

News2 days ago

FINANCIAL SERVICES INDUSTRY CRIPPLED BY RAPID RATE OF DIGITAL TRANSFORMATION

Latest findings from ITRS Group highlight urgent need for investment in strong operational resilience in post-pandemic landscape   A new...

Business7 days ago

SMART WEARABLES IN HEALTH TECHNOLOGY

Gavin Bashar, UK managing director at Tunstall Healthcare, discusses smart wearables in health and social care, the benefits, and what...

Finance1 week ago

THREE REASONS TO BE OPTIMISTIC ABOUT FINTECH IN 2022

by Stephen Lemon, Co-Founder and Vice President, Strategic Partnerships & Corporate Development at Currencycloud   It’s become cliched to point out...

Finance1 week ago

FINANCIAL SERVICES – KEY TRENDS FOR 2022

By Jason Aird, Partner, Airwalk Reply   For financial service organisations, the COVID-19 pandemic has led to a company-wide shift...

Top 101 week ago

HOW THE SECOND WAVE OF EMBEDDED LENDING WILL SHAPE 2022

Fuelled by the power of embedded finance, embedded lending is pushing the boundaries of SME funding to new frontiers. Mikkel Velin,...

Top 101 week ago

A CHANGE FOR NOW AND THE FUTURE – WHY THERE’S NO NEED TO LOOK BACK

Warwick Haycock, Accounting Software Specialist at The Access Group     Since March 2020, many organisations have dramatically changed the...

Banking1 week ago

2022: THE YEAR THAT BANKS FINALLY CHANGE FOR GOOD?

Toine van Beusekom, Strategy Director, Icon Solutions   The more things change, the more they stay the same. Looking back...

Finance1 week ago

TRENDS IN FINTECH IN 2022: FROM ARTIFICIAL INTELLIGENCE TO FINANCIAL WELLNESS

By Jayne Zhang, Lead Digital Transformation and Commercialisation consultant, FPT Software   The financial services industry has been pivoting towards...

Trending