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Planning for Power Outages: Why Business Continuity Matters More Than Ever

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By Tom Cole, Managing Director, Abacus Group

 

Will the UK face power outages this winter? While mass blackouts are unlikely, they are not beyond the realms of possibility, with National Grid warning that homes and businesses across England, Scotland and Wales could see their power shut-off for three hours at a time. The potential power cuts have been laid out as a worst-case scenario by the energy group after assessing all possible outcomes. There is reportedly enough capacity to avoid temporary losses of power.

Even with the lights expected to stay on, companies with a clear and consistent business continuity plan (BCP) will be at a significant advantage. Why? Because the ability to withstand the unexpected not only minimises the impacts should the worst happen, but also makes strong business sense today. It demonstrates to investors, customers, and other stakeholders that their operational needs are being taken seriously and that the business is robust enough to overcome any incidents it may face. Furthermore, the watchful eye of the Financial Conduct Authority (FCA) is laser-focused on operational resilience, making it a requisite for firms to identify their important business services, set impact tolerances for the maximum tolerable disruption, and carry out mapping and testing to the necessary level of sophistication.

Tom Cole

The unexpected and rapid onset of the pandemic threw the importance of a robust BCP into sharp relief, highlighting its role as a living, breathing, real-world programme rather than just words on a page. Now, as we enter a challenging and uncertain winter period, it is time for companies to assess their business impact analysis (BIA) and BCP terms. This involves fully understanding the specific risks, evaluating the strength of current contingency plans, and optimising the resources available before and after an emergency.

 

The costs of downtime

An unexpected power outage could bring business operations to a fast and unceremonious halt. The economic effects of this downtime can be substantial. But the impact of each event often extends beyond the obvious: downtime hampers the productivity of almost everyone in a company, leading to lower morale, reputational damage, and lost business opportunities.

Today’s volatility of market conditions means that few companies in the alternative investment industry would be untouched by widespread power outages. This is particularly true for hedge funds trading very high volumes – even a short outage could have significant impacts.

 

Setting out a plan

Therefore, firms should have a business continuity plan that recognises infrastructure outages during organised blackouts. While the requirements will vary between companies, the key components of an effective BCP include a thorough business impact analysis, a review of existing processes, and the creation and implementation of clear continuity strategies.

For some businesses, this may involve turning BCPs of early 2020 on their head: outages are arguably more likely to happen in rural areas, so remote employees could be ordered back into central offices to mitigate the risks of disruption at home. In contrast, some London-based banks are reported to be considering reinstating plans to shift to offsite locations and homeworking. And, of course, many businesses have already made the permanent shift to fully remote working, so they will need to consider other office-free contingency plans.

 

Weighing up the options

In a world of unknowns, firms need to understand their office power resiliency, assessing the effectiveness of their existing backup systems.

An uninterruptible power supply (UPS) remains a primary method to provide power resiliency. While this is only effective for a short-term outage, providing continuous power for an additional 20-30 minutes can buy a firm precious time to take quick action and put its BCP into motion.

Businesses should consider reviewing the size and technology of their UPS unit. A desktop UPS could make all the difference for key personnel to save their work and log off gracefully when the lights go out, but a more central UPS that is plumbed into the architecture of an office’s electrical systems will ensure a more stable power supply. However, not every business will be able to accommodate the size and weight of such a unit, so it is important to understand any potential limitations or obstructions should you go down the UPS route.

A much more effective way of ensuring medium-to-long-term office power resiliency is to pair a UPS with a generator. The role of the UPS is to maintain a power load for the immediate aftermath of an outage whilst the generator becomes available – a process that usually takes only a minute or two. As the Fort Knox of power resiliency, generators need to be in place for an office to be truly protected from blackouts.

Many purpose-built offices in the capital already have generators, but they are restricted to life-support functionalities such as elevators and emergency equipment. While this generally fails to cover office infrastructure, it is an opportunity that should be explored with a company’s office provider, as power generators can be a lifeline when the unexpected strikes.

Of course, not every office will have the space, time, or money for power generators. Ideally, power resiliency questions would have been asked as part of the office selection process, but it is never too late for businesses to engage with their provider and query what is currently in place. Even businesses with suboptimal power resilience can take steps to adequately prepare for outages. Laptop batteries typically run for 4-6 hours, so all companies should use this opportunity to test the worst-case scenario, working via battery and tethering to employees’ mobile phones. This exercise will help everybody familiarise themselves with the steps should an outage occur while also allowing the business to assess the speed and performance of their 4G or 5G networks.

 

Cloud resiliency is key

Cloud evolution cannot be ignored when it comes to full, scalable business resiliency. The widespread move away from on-premises computing and towards the cloud has left many companies in a much safer place and could prove to be a blessing should the UK experience blackouts this winter.

Cloud services reside behind a fortress of purpose-built, always available, and highly resilient data centres. These secure ecosystems hold an abundance of UPS and power generators, which are frequently tested to simulate a total power failure. Furthermore, they connect to various power grids, providing that extra layer of resilience and preparedness for the unexpected.

Should the worst happen, data centres have firm service-level agreements (SLAs) with fuel providers to keep their generators supplied and online for days rather than hours. This arrangement guarantees businesses in the cloud a level of business continuity that an in-office UPS cannot provide.

For companies yet to make a move to the cloud, now is a better time than ever to engage with an IT services provider for advanced, secure, and scalable access to cloud services. Supported by a robust and continually updated business continuity plan, businesses can safeguard and future-proof their operations today to meet the challenges of tomorrow.

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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