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How intelligent AP automation can put construction businesses on solid ground for growth

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Cody Manning, NORAM Chief Sales Officer at Yooz

 

The ability to access personal emails, utility bills, invoices and other important documents, as well as make payments via a mobile device, is a convenience most professionals and modern consumers now consider a necessity for streamlined, efficient productivity. Few business owners and professionals have benefitted more from this innovative option than construction business owners.

Often on the go, construction professionals face unique challenges that rarely affect businesses in other industries. Business owners must travel between job sites managing bids, multiple timelines, projects and personnel while still attempting to keep the business paperwork — including accounts payable (AP) — timely and in order. It is a time-consuming, sometimes overwhelming task that leaves many struggling to stay ahead.

Savvy owners have discovered a better way to manage and grow their businesses, safeguard their privacy and cybersecurity and increase the bottom line: They are moving to cloud-based AP automation.

 

Cody Manning

On the Go & in the Know: Why Mobility Is a Must

Accessibility is crucial to keeping the AP process going anywhere and anytime, and it must fit an individual’s schedule and preferences. The COVID-19 pandemic taught business leaders this invaluable lesson. When the back office is shut down or missing staff, businesses can suffer in several ways. It often results in a backlog of unprocessed invoices, leading to delays and late fees. This cascading effect impacts the cash management of business vendors and tests their patience. During periods of tight supplies and long wait times for certain building materials, this adds to an already stressful situation for both business owners and clients. Staffing issues often result in invoice duplicates or incorrect invoice submissions, which are disastrous for customer relations.

A recent survey from Yooz of more than 1,200 finance and accounting professionals revealed some telling statistics. The study reports that 32% of organizations listed paying vendors and suppliers late as one of their top challenges in the AP process. When asked why invoices are being paid late, 40% of respondents cited “slow processes” as the primary reason. While the study indicated many have learned how to better work remotely, there are still the hurdles of managing a paper-heavy, outdated AP system.

A cloud-based AP automation system can solve all those problems. It captures documents as they come in, regardless of their format. The best automated system automatically extracts and indexes all relevant information thanks to artificial intelligence (AI)-powered technologies such as optical character recognition and smart data extraction backed by machine learning. It then routes the invoice to the right person according to rules every business can personalize, define and tweak to work for their specific needs.

Mobility, then, becomes an opportunity to get necessary accounting work done anywhere, anytime — whether on the road or in a trailer at a job site. A few clicks will take users to documents necessary to review invoices and address retention or lien waivers. As a result, both costs and time required to process and pay invoices drop dramatically, and profitability rises.

 

Making the Right Choice Is Crucial

Owners who have taken their business to this next level have learned it will only work if it’s an airtight solution. With fraud on the rise, construction businesses need a secure platform for their employees, external partners and contractors to submit invoices and receipts.

The right AP automation solution makes a tangible difference when managing multiple construction projects which require allocating costs across multiple dimensions. Machine learning can automatically handle that type of complex cost allocation. What’s more, managing several construction projects often means multiple locations and multiple channels to collect and receive invoices. A state-of-the-art automation platform can perform multichannel merging of scattered invoices with a single, unified capture process. Mobility allows companies, from any mobile device, to manage receipt of materials from the back of a delivery truck and to reconcile them with intelligent two- or three-way matching.

With that much activity, fraud detection capabilities are more important than ever, since nearly four out of ten (38%) businesses have reported a payment fraud attack over the past year.. Using cloud-based solutions with AI-powered machines and deep learning capabilities for AP enables a much higher level of fraud detection and risk prevention for businesses.

 

A Smart Payment Power Tool

Given the fast pace and unique challenges of the construction industry, a cutting-edge digital and mobile workflow is a real power tool. Secure storage in the cloud translates into more peace of mind not only for profitable, growing companies but for their vendors as well. Suppliers should be able to track their payment status online. Ideally, a system would allow those vendors to sign up with a single email address and pick their preferred payment method once, so the system would remember it for all future invoices.

Construction-business growth trends include digital payments, which have become the standard for business-to-consumer (B2C) transactions and increase the ease and convenience of business-to-business (B2B) transactions. In the Yooz survey, respondents reported that almost one-quarter of U.S. companies already use digital payments, with another 49% planning to follow suit this year. Smart business owners are getting on board.

Construction business professionals have discovered that eliminating physical checks reduces unnecessary problems. Owners no longer must rely on timely production from office staff because they can approve payments quickly, take advantage of early-pay discounts, and save time and money by accomplishing those goals from any location at any time. Vendors that opt for payment by virtual card get their funds almost instantly, which significantly increases goodwill and can act as a safeguard against supply chain issues in the future. Suppliers will always show a preference for companies that are time efficient with payments.

The development of AP automation systems has given construction business owners a way to generate additional revenue from cash back with the use of virtual cards. Virtual cards are a great way to catch fraud and waste before an inaccurate payment can go out, because the system will automatically check for the volume and velocity of payments to identify any outliers. Finally, digital payments generate a detailed audit trail.

The older business model for the construction industry has at its core an AP system that is cumbersome, outdated and costly. It does not include a much-needed cyber safety net, money-saving efficiencies or a way to increase revenue streams. Take rising prices for gas which the construction industry can’t run without. When a traditional cost centre like AP begins producing recurring revenue, you can quickly start to offset those increased costs. The innovation of an intelligent, user-friendly, cloud-based, AP automation system is the best tool in a construction business owner’s belt.

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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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