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3 critical tips to help SMB’S survive the ongoing inflation crisis

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Ryan Demaray, SMB EMEA MD at SAP Concur UK

 

The past few years have been tough for small businesses, yet the pandemic taught many companies how to be resilient. Now, businesses are better prepared to face unforeseen challenges that could potentially crop up.

This can be linked to the fact that over the last few years, a major learning for business leaders was the implementation of technology and digital tools. 77% believe that the pandemic has led to their business investing in more technology, according to SAP Concur’s Public Sector Expense Fraud report.

Despite investing in more technology, the ongoing inflation crisis continues to loom over both businesses and consumers. The cost-of-living crisis brought on by geopolitical crises has also directly caused many of these businesses to rethink their long-term financial and operational strategies. For consumers, the price of everyday commodities has skyrocketed, and wages have not matched this.

As a result, consumer spending has dropped and businesses are feeling the strain, leaving business leaders to reflect on their spending levels to stay afloat. By implementing the right digital tools, issues brought on by the inflation crisis can be solved. Here are three tips that can help SMBs stay afloat during this ongoing inflation crisis.

  1. Identify where money is being spent

As SMBs are still growing, cash is a top priority for business leaders. With cash flow and demand being threatened due to inflation and lack of consumer spending, businesses are finding it harder than ever to predict spending. To tackle this, visibility of where money is being spent by staff would be useful for reallocating funds or saving for more significant investments to keep the business moving forward.

As well as better visibility, businesses can use digital solutions to identify better suppliers or other business partners that can offer discounts or longer payment terms. These insights can then be used to negotiate more favourable terms with existing partners or perhaps even allow the business to seek new supplier partnerships.

Expense software is an excellent example of a technology tool that can give companies a clear picture of what employees spend their money on and help to keep payments under control. This is especially important as we continue to work in a hybrid workforce, which has impacted business workflows, communication and visibility.

  1. Create stability for employees

Arguably, those who will be most affected by the inflation crisis are employees who will be looking to budget personal finances as utility costs continue to rise. According to our employee experience release survey, nearly three quarters (70%) of employees in the UK are concerned about the impact of the cost-of-living increase on their personal finances.

This will increase tension between business leaders and the employees looking to make savings.

The study finds that employees are seeking a higher salary or pay rise to help ease the burden of increased inflation. While this issue being resolved is dependent on the company, another threat to employees’ finances – late reimbursements for expenses – can be managed by implementing better expense software.

With over half (56%) of employees worried about delayed reimbursements impacting their finances, employees should be working to improve expense policies and processes with automation. Having the right finance software in place will not only simplify the process of claiming expenses, but it can also help to minimise accidental fraud, allowing finance departments to track and control expense claims in real time. Effective technological detection solutions can be implemented for more accurate fraud checks, increasing accountability, boosting compliance and reducing human errors.

  1. Enable responsible business practices

Many companies are already increasing their technology budgets to tackle built-in procedures and monitor employee expenses to minimise running costs. But businesses must ensure they navigate company regulations and compliance to help business leaders gain clarity around finances and act with certainty. Understanding why certain parts of the business spend different amounts will allow business leaders to create more compliance rules on employee spending.

By ensuring that solutions are up to date, both customers and employees will have the right level of guidance and confidence. SMBs can benefit from many modern technology solutions that are scalable to fit a business regardless of size and budget. With scalability, businesses will be adequately equipped with the tools necessary to tackle inflation and the cost-of-living crisis.

Existing staff can also make the most of expense management solutions for other reasons. By replacing inefficient, paper-based processes with automated solutions that can directly connect spending information to an accounting or ERP system, businesses eliminate the need to upload and enter data manually.

This saves time for those who usually work manually, improves efficiency, and reduces the possibility of human errors. It also enables business leaders to manage reviews and approvals with ease and convenience.

Looking at the long-term benefits

Investing in technology and digital solutions will require training for employees to ensure employees are able to understand the new systems and processes. This is an expense that some businesses are reluctant to spend but at such a pivotal time, SMBs need to make sure they are looking at the long-term benefits of automation to survive and permanently reduce costs.

In this current economic climate, it can be difficult to know what measures to take to minimise potential problems. With the right attitude from leaders and employees, up-to-date automation tools and efficient processes, everyone will be able to feel less stress from the inflation crisis and focus on driving the business forward.

Business

Ransomware chokes COBRA: How AI-powered data analysis can support financial services’ plight

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By Toby Butler, Financial Crime Solutions Manager at Ripjar

 

Ransomware attacks are on the increase in the United Kingdom. Most of the British Government’s COBRA meetings have been convened in response to ransomware attacks, showing how cybersecurity breaches are as pressing as national emergencies and crises. The National Cyber Security Centre’s (NCSC) annual review found this year that the country was hit by 17 ransomware incidents that were so impactful they “require a nationally coordinated response”. That extends to the financial services sector, which saw an increase of ransomware attacks with 55% of organisations hit in 2021.

Where does this leave the sector and how can artificial intelligence and machine learning be instrumental in understanding the risks companies face against future ransomware attacks?

Toby Butler

Company information is being stolen and sold to different threat groups, who prey on the individuals in that organisation who are more likely to pay them. The UK is one of the most cyber-attacked countries in the world and the Government has been criticised for being “ill-equipped” to deal with this exponential rise of fraud cases.

 

Ransomware-as-a-Service

Ransomware is one of the most common forms of cybercrime. Fighting it has become one of the biggest problems that organisations today face during their everyday operations. For instance, Malware (malicious software) encrypts the files of a single computer, then works its way through an entire network to reach the server and inflict maximum damage. Company information is being stolen and sold to different threat groups, who prey on the individuals in that organisation who are more likely to pay them.

When these attacks occur the victims, more often businesses, are left with minimal options. If they have substantial backup solutions already in place, they can attempt to restore the encrypted data to their servers. But if that data isn’t already secured elsewhere, they may need to pay a ransom to the criminals behind the attack. Thereby allowing the business to function once again and restoring their reputation. The cost of paying the ransom will feel considerably smaller compared to starting a business again from scratch. Sophos’ State of Ransomware in Financial Services 2022 report found that 52% of financial services organisations paid the ransom to restore their data, the average remediation cost in financial services was US$1.59M.

Cybersecurity Ventures estimates that ransomware is set to cost global businesses more than $256 billion by the end of 2031. By that token, organisations need to be extremely mindful of the potential threats they may face. Businesses need to understand the methodologies these hackers use, to address the weaknesses within their domain and take measures to isolate and prevent further ransomware attacks from happening again.

 

The rise of WAMs

According to a recent report by security firm CyberSixgill, 19% of the 3,612 cyberattacks that took place in 2021 were traced back to Wholesale Access Markets – or WAMs for short. WAMs are, in essence, underground internet flea markets. These markets are where aspiring attackers come to purchase network access from threat actors – the individual or entity involved in carrying out the cyber-attack. Types of threat actors include insiders, cybercriminals, rival organisations, or even nation states stealing data.

WAMs sell access to multiple compromised endpoints (or pathways) for around 10-20 dollars. Researchers found that WAMs listed access to approximately 4.3 million compromised endpoints in 2021, which include access to both provider and enterprise software (for example, an organisation’s Slack channel) up to 180 days before the attack itself took place. This shows how long these compromised endpoints remain undetected without proper internal analysis.

 

How can Financial Services stay ahead of the curve?

The use of Artificial Intelligence (AI) and machine learning is undisputed across modern businesses and sectors, and continues to revolutionise processes across the board. AI is a significant player in the financial services industry, building the ‘cyber-wall’ against nefarious users. It gives organisations optimal insights into reducing the likelihood of a ransomware attack in the future.

Namely, AI and machine learning collects and analyses vast amounts of messy (structured and unstructured) data from disparate sources. The challenge for the sector is to understand the volume and variety of the raw data collected from any source to build better protection in the future.

Structured information could be best understood as the clear data we see in a table. For example, the following attendees made a business meeting: first name – Joan, surname – Smith, age – 46. But unstructured information is information presented in a complex manner. For example, ‘there were five people who attended the business meeting, one of whom was forty-six and called Joan Smith’. Naturally, due to the complex nature of the prose, it would be more difficult for a machine to process that data into a digestible format for further risk analysis. This is where AI continues to prove invaluable.

AI uses natural language processing to understand the information provided on the web. As the software continues to evolve, natural language processing reads the information in a way a human would to extract the key information from the text. By incorporating AI and machine learning within an organisation’s IT infrastructure, companies operating within financial services can be better equipped to handle cybercrime.

These tools are flexible and adaptable, they can be configured to analyse different types of data from different sources to curate key insights. This collated information provides a better analysis of the organisation’s exposure, allowing them the opportunity to get upstream in preventing future attacks. This kind of approach is essential to processing listings on WAMs.

The power to analyse data to identify weakness is vital in the battle against cybercrime. It gives organisations a better understanding into what they could expect to see in the future. Hosting the correct data, and with the analytical skills, financial organisations can gain a better understanding of the methodologies and weaknesses in-house that attackers use and exploit to hold them to ransom. Organisations can then use this as a reference to pinpoint compromised endpoints, giving them a chance to reduce access before this route can be exploited and ruin their business.

With cybercrime and ransomware continuing to remain prevalent, it’s vital that financial services companies understand how they can get ahead of the curve and build a robust security platform within their IT infrastructure that can withstand an attack. In 2022, a ransomware attack occurred every 40 seconds. The mindset for the sector needs to be one of when, not if.

Organisations need to be thinking about an attack now – before it’s happened. Pre-planning and preparing for the worst possible outcome from future threats and adversaries. The introduction of AI and machine learning in the fight against cybercrime is a must, and the sooner the industry gets behind in implementing AI, the safer it will be through the next decade.

 

 

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SVEA BANK ACQUIRES AREX’S FINTECH OPERATION IN FINLAND

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AREX Markets, the data-driven FinTech company that drives financing costs down for SMEs and enables them to get paid quicker, has announced the sale of its Finland operations to Swedish payment and financing institution Svea Bank.

With the deal, Svea will further strengthen its position as a corporate financier, as AREX’s c.1200 Finnish customers and partnerships in the areas of financial management and financial management software will be transferred to the bank’s portfolio. The Finnish operation of AREX has financed over EUR 500M worth of invoices.

AREX’s Spanish and UK operations remain unaffected and remain focused on building embeddable financing products for third party platforms. Customers in Finland have been informed of their transition, and their contracts and service details will port across to Svea.

Svea is reshaping the playing field of corporate finance in Finland, and taking on the operations of AREX in the region is a natural step to strengthen their own business and at the same time offer AREX’s partners and customers an easy path to a wider range of services than before.

“Over the years, Svea has grown a lot also through business transactions, therefore acquiring AREX’s business operations in Finland was a good and natural solution for us. In addition, the deal is pleasant for us at Svea because the focus of our activities is to help partners and customers succeed – offering AREX’s partners and customers a wider range of services is exactly that,” says Pasi Väre, country manager of Svea in Finland.

The deal also brings new opportunities for AREX to focus on the UK and Europe in its roll out of embeddable financing products, which can be white-labelled by neobanks, ERPs and accounting software alike. The business is seeking to bridge the liquidity gap faced by most small businesses in the face of a recessive economic climate.

UK SME’s can continue to access AREX’s core invoice financing product through the Xero marketplace.

“For us at AREX, this is a great step: we are developing a stronger presence in the field of embedded finance, which is underpinned by our sophisticated marketplace software, our strongest point,” says AREX’s CEO, Airto Vienola.

“For the AREX team it was extremely important that we find the best possible corporate financier to take care of the business’ customers and partnerships in Finland. Svea convinced us with their customer and partner-centric approach”, adds AREX’s co-founder Perttu Jalkanen.

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