Christian Damour, Product and Services Manager – Security at FIME
Smartphones are central to our daily lives. We manage our personal and business affairs, watch movies, track our health and, increasingly, make payments. Adoption of mobile payments is rising considerably worldwide, with predictions estimating it’ll be the second most popular way to pay by 2022.
For banks and other issuers, delivering mobile payments is becoming increasingly imperative. There’s a crucial choice to make, though – support the Giant Pays or go it alone.
While ‘flying solo’ may make it more complex, it offers banks a whole host of benefits, including increased control, brand recognition and security. Host Card Emulation (HCE) is one compelling option for banks to develop, launch and maintain their own payment apps for Android customers quickly and cost-effectively. Its caveat, however, is the need for a robust, security-driven implementation plan to ensure a successful app launch from the get-go.
So, what is HCE and how can banks best use it to power their way to the path of mobile payment success?
The A-B-C of HCE
In a nutshell, HCE enables a smartcard to be mimicked on a mobile device using software, meaning transaction data and card credentials are stored in a cloud server, rather than inside the mobile device. This provides greater flexibility and processing power, considerably reducing the cost of deploying mobile payments.
Google first enabled HCE back in 2014. Since then, it’s been selected by several banks (and even Russia’s national payment scheme, MIR) to deliver cloud-based payments without relying on third parties.
Why choose HCE?
Ease and convenience of services is top priority for consumers when choosing a bank, so nailing the UX of any mobile payments solution is key. By utilizing HCE, banks and retailers can retain control over this all-important UX, as well as being able to increase brand visibility and foster loyalty. Looking longer term, it also ensures these stakeholders retain ownership of valuable customer data that can be used to inform the development of products and services.
From a technical perspective, launching HCE apps is a considerably more streamlined process. For example, issuers don’t have to contend with hardware security certifications, as software HCE apps undergo simpler, less expensive functional and security certifications. It also removes the challenge of managing multiple complex and costly relationships that, say, a traditional SE-based solution, creates.
Start with security!
Now, back to that caveat mentioned earlier. While Android offers some security features, such as sandboxing, these are notoriously vulnerable. Its rich OS and unsecure software mean that if rooted, all apps and data are accessible. In short, relying on Android’s security features is simply not enough.
The answer? Layers of security.
To launch HCE solutions effectively, security must be a priority from the start to mitigate concerns surrounding Android device security.
36% of US smartphone users don’t use mobile payments because they are worried that their data is not secure, so security can also operate as a marketing tool to differentiate and gain market share. Crucially, however, a lack of security can leave banks vulnerable to a whole host of customer relationship and reputational challenges if apps are compromised, not to mention potential fines. Plus, the later security bugs are found, the more expensive they are to correct.
Banks and other issuers cannot afford to be among the 43% of Android apps found to be at a high security risk. But they don’t have to go it alone. Working with a strategic partner can help banks adhere to best practice when defining, designing and deploying HCE solutions, ensuring the protection of data, money and consumer loyalty. Seeking support from the very start of projects also mitigates costly and unexpected delays and challenges, streamlining that all-important launch time.
HOW TO MANAGE YOUR CASH FLOW IN UNCERTAIN TIMES
While the world is constantly changing, probably at a faster pace now than ever before, businesses need to manage cash flow and costs to drive success in uncertain times, says Matthew Thorpe, partner at Haines Watts Essex.
Managing people and expenses
There are certain costs that you just can’t avoid as a business – to keep your operation running seamlessly, but scrutinise the detail and cut down on any non-essential expenses. Check things like your SaaS subscriptions and look out for costs that auto-renew and if you do cancel, remember to also cancel your direct debits too.
You might want to put a freeze on hiring new people, but ensure that other roles and responsibilities are clearly and efficiently assigned across your team. The Coronavirus Job Retention Scheme (CJRS) has been introduced by the Government to help UK employers access support to continue paying part of their employees’ salary to avoid redundancies. Affected employees are classed as “furloughed workers”.
Once furloughed, the employee cannot work or they will not qualify for the scheme. For businesses that perhaps need to go further, there may be some roles they don’t need any more, but businesses should work sensitively with people to manage this.
Cash is king
In uncertain times, owner managers will need to keep operations going to ensure financial stability. You should look to manage debt more efficiently by negotiating extended payment terms with creditors. You could also renegotiate loans for longer repayment terms to give yourself a lower monthly payment, helping the business to set some cash aside each month.
As a business owner, you need to create a cash flow projection and update this regularly if you are to improve things. You can do this using financial information to create a picture of how the business will look in the next 12 months. The forecast needs to show revenue sources and expenses, which will show the ups and downs of business income and can be used to make sure that enough finance is in place.
While banks and other finance providers recognise that the cashflow of a business may be disrupted by the impact of Covid-19, they are still going to want to see that you are viable and continue to trade in these uncertain times. Make sure your business is organised and don’t let disorganisation cause unnecessary issues. You can evidence this by having detailed forecasts; current order books and projections (as best as possible).
Having instantly accessible, accurate financial information allows you to plan effectively, spot issues before they become problems and manage your money in the most efficient and rewarding way.
Software is now incredibly user-friendly and accessible from anywhere. For a business owner embracing the technology, this means:
- Invoicing can be done instantly when a job is complete, emailed to the customer with an easy to use link to a payment platform.
- Comparison websites can automatically monitor and help maintain lowest cost for things such as light & heat, insurance etc.
- Technology can be used in place of face-to-face meetings. It can also enable them to adapt production lines to different demands.
All of these things and more, used properly, can make managing your business finances quicker, easier and often cheaper. You will also be able to bring clarity to where your business stands and prepare for the next steps.
HOW FINANCIAL SERVICES CAN GET TO GRIPS WITH RISING SUPPLY CHAIN RISK
By Alex Saric, smart procurement expert, Ivalua
UK businesses have never been more dependent on their suppliers to help them deliver goods and services to their customers. Be it retail, manufacturing or financial services, suppliers have a vital role to play when it comes to innovation and meeting customer expectations. However, as supply chains become increasingly global, businesses are potentially exposing themselves to more risk than ever before.
This is especially true in financial services. Whether it’s the impact of geopolitical events like Brexit or global tariff wars, supply shortages, security or the businesses impact on the environment, an organisation’s failure to identify and mitigate risk could see millions wiped off its share price, and its corporate reputation left in tatters. Risk can present itself anywhere and at any time, so financial services firms must be ready to address it. However, many simply don’t have the ability to evaluate suppliers for risk factors, leaving them wide open to business operations being hindered, or being slapped with financial penalties.
More suppliers, increasing risk
One reason why financial services firms aren’t able to evaluate suppliers is the breadth and scale of today’s supply chains. For example, French oil company Total said in in a recent human rights briefing paper that they work with over 150,000 direct suppliers worldwide. This is just one example of how large and varied the roster of partners has become. Research from Ivalua has found that financial services businesses on average are working with around 3,600 suppliers annually, which is evenly split between UK-based and international partners. That number is expected to rise, with 60% expecting the number of suppliers they work with to rise.
The expanding nature of suppliers is only going to expose financial services firms to more potential risk than ever before, yet 78% say they face challenges gaining complete visibility into suppliers and their activities.
A lack of supplier visibility leaves businesses unable to identify and mitigate against supply chain risk. In fact, almost three-quarters (73%) of financial services firms have experienced some type of risk during the last 12 months. These include; supplier failure (43%), environmental impact, such as pollution or waste (35%) and supply shortages (45%). Supply shortages can be among the most damaging to a business, as seen by both the KFC chicken shortage which closed stores, and the summer 2018 CO2 shortage which caused companies such as Heineken and Coca-Cola to pause production, impacting supply across Europe during the World Cup.
Businesses unprepared for the worst
One way financial services firms can better prepare for risk is to ensure they know what to plan for to reduce the impact. However, whilst some say they have a contingency plan in place to deal with risk, many of them are unprepared. Financial services firms admitted to not having comprehensive and deployed contingency plans in place to prepare the supply chain for risk such as; natural disasters (68%), supply shortages (67%), geopolitical changes (65%), environmental impact (63%), supplier failure (62%) and modern slavery (50%).
In order to effectively prepare for these types of risks, it’s vital that financial services businesses fully understand their suppliers, their business environment, global variations in regulations, geopolitics, and a host of other factors. But for many, there are multiple challenges when it comes to gaining this understanding. A prevailing factor is an inability to gain visibility into all suppliers and activity because supplier management data is stored in multiple locations and formats, making insights difficult to access. This leaves teams unable to review supplier activity and assess compliance.
Making supplier management smarter
It’s imperative that financial services businesses are able to respond or prepare for supply chain risk. Clearly, much more needs to be done to ensure they have complete visibility of suppliers, especially in an era where regulators can levy heavy fines for GDPR breaches and scandals spread in minutes over social media. These types of risks can be reduced in the future if procurement teams have a 360-degree view of suppliers which will help with contingency planning and risk management.
For example, in the instance of supply shortages, plans could be put in place that identify alternative suppliers to ensure any shortages do not impact end users. This type of supplier collaboration is paramount when it comes to managing and mitigating against supplier shortages. When it comes to regulations, financial services firms can’t allow a lack of visibility to limit their ability to ensure all suppliers are compliant.
To do this, teams must take a smarter approach to procurement that gives complete visibility into suppliers throughout the supply chain. This will allow financial services firms to identify and plan for risk, reducing the potential damage, and ensuring they are working with and awarding business to low-risk suppliers. Supply chain risk is rapidly becoming an overarching concern for financial services firms, but by providing the ability to assess suppliers, they will have all the insights they need to mitigate the impact on business operations.
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