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How shadow IT remains a threat to Europe’s biggest businesses

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By Andréa Jacquemin, founder and CEO of Beamy

 

SaaS is creating underground (or shadow) IT in companies, dramatically increasing their exposure to cyberattacks.

 Seemingly unknown to many IT departments and senior management teams, the use of SaaS applications among employees is booming. It is creating an underground digital world with little regard for security, data protection, or digital sovereignty issues.

 As a result, in the top firms traded on the world’s major exchanges – the LSE, NYSE, and the NASDAQ, for example – and across large companies as a whole, SaaS is now a key factor in digitalising their business.

 The SaaS ecosystem generally relies on the widespread use of tools made available online, which are usually designed for extremely specific tasks and operate on a subscription basis. However, these tools are deployed without the oversight of corporate governance procedures, and mostly pass under companies’ radars, even if they represent millions in cumulative annual costs. This phenomenon is known as ‘shadow IT’. Using cloud software from external vendors regularly results in customer data being stored in non-compliant ways or being hosted outside its originating geography (more than 40% of SaaS used is American) This has the potential to generate a multitude of future security vulnerabilities and compliance issues

 

Only 14% of SaaS tools being used in large enterprises are properly managed

 These are without a doubt “underground” digital systems, with an average of 200+ different cloud providers being used in companies with more than 1000 employees. Out of these 190 providers, only 60 are managed by an IT department, 44 by the data protection officer, and 36 by information security teams.

 If the cloud continues to grow at the rate predicted by KPMG, then more than a thousand different SaaS providers could be used by a single company in 2030. Establishing a clear governance framework for cloud-based SaaS will therefore be vital for the future, since it brings the topics of data sovereignty, cyber defence, and digital performance of our companies to the forefront of issues.

 

 Allowing business teams to manage their own digital transformation

 Since digital transformation involves all departments of a company, and especially business teams themselves, it’s only natural for them to want to tackle it hands-on. The latest generation are more accustomed to quick actions via quicker clicks. This generation is also more likely to expect companies to provide the very best that technology has to offer, whether in terms of processing speed, user-friendly interfaces, or the use of tools to make the working day more productive. It raises alarm bells that this is not yet part of the tech procurement approach in place at major companies.

 The technology required is available on the global market, which consists of almost 100,000 SaaS. with venture capital investments in the hundreds of billions of pounds. These solutions rank among the fastest, most powerful, and best suited to ensuring the digitisation of processes. But there are also those that store and use the most personal data abroad, which could pose a huge and invisible compliance risk to businesses.

 What is needed is the creation of an app store for each company, to give business teams the ability to choose the best software for themselves, while carefully guiding them to select, use and de-risk these tools in the long term.

  

Coordinating business teams and IT teams for effective digital governance

 The CIO holds a strategic position when it comes to providing the company with a framework for decentralising the digitalisation process. The key is to ensure that, despite the technological progress pursued by operational teams, a regulatory framework is respected, personal data processed by these tools is properly protected, and that the risk of external security breaches is minimised. In this context, the CIO acts as the orchestrator of the digital ecosystem, giving freedom to business units while making sure that the application landscape is optimised and safe.

 The focus on a “sovereign cloud” will remain an unproductive endeavour if SaaS, which accounts for half of cloud computing, is still placed in the background. Within companies, it is up to senior management teams to initiate the construction of a decentralised approach to digital governance. This is the only thing capable of successfully bringing structure to this fast-evolving part of the cloud. It is a strategy that requires the involvement not only of the CIO, but of the entire executive committee, and all departments affected by the challenges of digital transformation.

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How FS organisations can utilise data to boost customer experience

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Charles Southwood, Regional VP and GM – Northern Europe and Africa at Denodo

We’ve all heard the age-old adage “the customer is always right”. It insinuates that, in any sector, the needs and desires of those buying a brand’s product or services should be paramount. However, today’s customer has new standards and it is becoming harder than ever for businesses to meet and exceed them.

This is certainly the case in the financial services (FS) sector where getting customer experience right used to be relatively simple. The human touch was traditionally delivered as a bi-product of in-store, transactional interactions. Perhaps, as a result of this, few people ever considered changing their provider and the traditional, established banks ruled the space.

However, with the dawn of online banking and the introduction of new, exciting challenger banks as well as the UK’s unique Current Account Switching Service, the balance of power between the consumer and the bank is changing. Consumers no longer feel locked in. If their needs aren’t being met, they aren’t afraid to look elsewhere and switch their allegiance to other companies. In other words, loyalty is far from guaranteed and customer acquisition is only half the battle.

Retention relies upon delivering strong, unique customer experiences that beat down the competition. In order to achieve this, FS organisations will need to be able to leverage data. Its insights could be the differentiator that enables them to stand out. The positive news is that, in our online world, there is a constant stream of data being produced. However, having access to all this data doesn’t necessarily mean that a brand knows how to effectively analyse and utilise it.

Ensuring data provides insight

The rapid growth in digital technologies and services across the sector has left many FS organisations juggling an unimaginable amount of data. This data is both complex and much of it is lacking in quality. Structured, semi-structured and unstructured, it is stored in many different places – whether that’s in data lakes, on premise or in multi-cloud environments. Before FS organisations can even think about using it to inform customer experience strategies, they need to be able to find it and understand it.

This is where modern technologies – such as data virtualization – can help. Through a single, logical view data virtualization boosts visibility and real-time availability of all data across an organisation.  Unlike traditional extract, transform and load (ETL) solutions, it does not move and copy data. Instead it leaves it in the source systems. In other words, instead of just replicating data, data virtualization reveals an integrated view to those trying to find it.

For FS organisations this provides several important benefits. For example, it helps when data sovereignty issues arise and the movement and replication of data outside certain countries is illegal. Data virtualization solutions can also assist in terms of financial reporting by fetching data in real time from underlying source systems – applying the necessary security and obfuscation whilst delivering the performance, the agility and the accuracy needed through the seamless connection of data.

FS organisations that adopt data virtualization, are likely to see an improvement in the overall performance and efficiencies of their business operations. Overheads will be reduced, as will the length of project times. Above all, data virtualization will rapidly strengthen the customer experience by supporting business leaders to think strategically and make decisions based on real-time insights. But don’t just take my word for it.

The proof is in the pudding: How Landsbankinn is delivering on the CX promise

Landsbankinn is just one of the many financial services institutions that has already successfully embraced data virtualization and its benefits. Despite being the largest financial institution in Iceland – with around 40% of the retail and 33% of the corporate banking market share – Landsbankinn used to face several issues when it came to data sharing and analytics.

Over 45 siloed data sources – including Oracle databases, data warehouses and APIs from internal and external sources – made finding and accessing the right data at the right time extremely difficult. Without real-time data to fuel informed decision making, customer experience and operational efficiency were suffering. As a result, Landsbankinn was in need of a data overhaul to streamline and integrate its infrastructure.

To bring together its complex data landscape and collect data in real-time, Landsbankinn implemented the Denodo Platform – a data integration and data management solution built on data virtualization – to build a logical data warehouse. As a result, the team can now aggregate data from multiple data sources, transform that data based on the applied business rules, and then make it available to consuming applications. Ultimately, this means that, throughout the organisation, the data can be utilised by a wealth of employees, even those who are not particularly IT savvy. It also means that the business leaders can use data insights to make well-versed decisions and provide a plethora of services to Landsbankinn customers both quickly and efficiently.

In recent years, customer retention has become the key to successfully growing a business. This cannot happen without an effective customer experience strategy. The ability to convert data into insight is priceless in an economic landscape where the line between a business thriving, surviving and failing is so thin. Those operating in financial services must harness modern technologies – like data virtualization – to stay at the top of their game and ahead of the competition.

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The Evolution of SoftPoS in 2023

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By Brad Hyett, CEO of phos

Contactless payments and digital wallets have surged in popularity in recent years. Part of this stems from the digital boom that occurred during COVID-19 but it’s also thanks to the ease of use that contactless offers customers. This has helped accelerate Software Point of Sale or ‘SoftPoS’ adoption amongst SMEs and enterprise retailers, with a total of 6 million merchants taking advantage of the technology in 2022 according to Juniper Research.

SoftPoS or ‘Tap to Pay’ technology – is a software solution that allows vendors to turn their phones or mobile devices into contactless payment points. This has made life for small businesses easier, as they no longer have to fork out large sums of money for traditional Point of Sale (POS) terminals, i.e. card readers, or ‘make do’ with outdated payment software.

In light of Apple’s announcement to allow third-party SoftPoS providers to deploy their technology on iPhone last year, adoption is expected to increase further. By 2027, it’s forecast that there will be up to 34.5 million merchants by 2027 – nearly a 500% increase from today. With more payment giants like Paypal and Venmo announcing they will support contactless transactions through their iOS apps in the months ahead, what else is in store for SoftPoS in 2023?

Apple’s role in market consolidation within SoftPoS

Apple’s move to integrate the technology with iOS devices will expand SoftPoS’ usability across mobile operating systems – significantly boosting the size of the addressable market for vendors. For the first time, Apple users will be able to offer Tap-to-Pay solutions which have traditionally been limited to Android devices only.

This will ultimately bring greater awareness and adoption of SoftPoS as we see increased familiarity with Tap-to-Pay solutions among businesses and consumers alike – as they’re no longer bound by the constraints of the type of phone they use.

While the SoftPoS on iPhone rollout currently only applies to the US market, it’s fair to assume this will expand internationally at some point – aiding the normalisation of ‘Tap to Pay’ solutions en masse in the months and years ahead.

The next wave of solopreneurs

The events of the last year will also continue to have a ripple effect over the next 12 months. For example, we’ve seen the tech industry undergo mass layoffs due to a challenging economic environment and rising global inflation.

With large numbers of highly skilled talent out of work, the phenomenon of solo entrepreneurship is likely to see an uplift – as it did during the pandemic – over the next 12 months. Born in a digital-native environment, individuals from this released workforce can now set up their own businesses and run them on mobile devices, as opposed to legacy infrastructures.

This could prove another sizable opportunity for SoftPoS vendors in the coming year, as we predict to see more small businesses sprout as a result of ongoing redundancies.

The growing importance of SoftPoS orchestration

As the market rapidly develops, so too does the choice and ease of onboarding. Financial institutions and retail technology providers can now use a SoftPoS orchestrator to help them deploy Tap-to-Pay solutions quickly and easily for their merchant customers, instead of having to create their own mobile solutions. This saves them time and money – both crucial resources for any business and especially in a challenging economy.

Partnering with a SoftPoS orchestrator is a cost-effective way of providing mobile payment solutions without having to worry about waiting on new software and security updates. With an orchestrator, this is done automatically – making this a much lighter lift with no requirement for technological know-how.

As SoftPos orchestrators are acquirer agnostic, this means they can help businesses provide a SoftPos solution to their own retail customers, regardless of the existing acquirer that they’re already using.

An additional benefit here is that a wider pool of merchants are able to benefit from the technology – growing the overall size of the SoftPoS market. Orchestrators, then, have the ability to drive wider adoption of the technology globally, reaching a bigger audience of end users and advancing the mobile payments industry in emerging markets across the world.

Conclusion

The increased popularity of digital and contactless payment options has driven exponential growth in the SoftPoS market in recent years. The next 12 months will see the technology enter the mainstream, as Apple starts to allow more third-party SoftPoS providers to deploy their solutions on iPhones.

The timing coincides with several emerging opportunities for the technology, including a potential uptick in the number of solopreneurs and mobile-first businesses. This combination of factors will see more financial institutions and legacy technology players work with SoftPoS orchestrators to bring Tap-to-Pay solutions to market in 2023 if they want to stay ahead of the competition and keep up with ever evolving customer demands.

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