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RegTech, CYBER AND DIGITALISATION: A COLLABORATIVE FUTURE

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Vaibhav Malik, Head of Cybersecurity Advisory Practice, Integrity360

 

It’s hard to think of many aspects of our daily lives that haven’t been impacted by the pandemic.

Some changes, such as the daily wearing of face masks and remote working, are more apparent, having been instated to protect people and reduce the spread of the virus. Others, however, have been subtle, indirect consequences of the “new normal”.

Let’s consider the financial landscape.

Back in March 2020, deVere Group revealed that the use of mobile finance apps in Europe increased by 72% in the week after the pandemic had begun, with lockdown and social distancing restrictions altering and/or limiting the ability to bank physically.

There have undoubtedly been some positives to this dynamic.

Banks and other industry players have continued to respond this past year with an energised focus on enhancing customer experience, digitising and advancing their offerings to ensure access to critical services in connected spheres. Yet as this transition has occurred, it has also unveiled vulnerabilities and a broader attack surface for cybercriminals.

Vaibhav Malik

The statistics speak for themselves. According to data from Carbon Black, cybersecurity attacks aimed at the financial sector increased 238% between February and April 2020. BAE Systems meanwhile reveals that almost three quarters of financial institutions reported an increase in cybercrime activities between February 2020 and April 2021.

And it is not simply a case of higher volumes – equally, it is one of increasing complexity.

Biometric authentication has been exposed as an attack medium; novel technologies such as machine learning, IoT, and deep fakes are now being used; and the targeting of smart devices has taken centre stage.

In response, the financial services industry has been faced with an increasingly convoluted regulatory environment to instil better practices and security hygiene, but this too is becoming difficult for traditional compliance compartments to manage.

 

The rising tide of regulations

To clarify, more comprehensive regulations are no bad thing.

Where many organisations have adapted their models to align more effectively with the new normal, they have become exposed in terms of their continuity, resilience, processes and assets. It’s a shift that needs addressing, and we’ve seen the undoubted benefits brought about by data protection acts such as GDPR.

The problem for many organisations is comprehending and responding to the rate of change. Rule changes have increased 500% in the past decade, with a new regulatory update now being implemented every seven minutes.

At the same time, compliance has never been more important.

Where the threat landscape continues to intensify, regulations have been put in place to promote best practice and reduce vulnerabilities. Further, in 2019, the Securities and Exchange Commission (SEC) issued 862 enforcement actions, ordering those in violation of regulations to pay more than $4.3 billion combined.

Striking the balance is difficult, but fortunately there are solutions.

Where the regulatory environment is the midst of a major transformation, companies must likewise transform their approaches to compliance and risk management. This cannot simply be a case of getting more hands on deck given the cost and limitations of manual work – such is not a sustainable way of scaling.

Instead, RegTech provides an appropriate path forward.

Albeit a relatively novel technology, RegTech leverages machine learning, natural language processing, blockchain, AI and other cutting-edge technologies that vastly improve the ability of businesses to swim against the rising tide of regulation.

Capable of processing high volumes of data at incredible speeds, it can quickly analyse raw legal text and identify new areas of compliance that should be considered. It removes the potential for human error, with a more accurate and comprehensive evaluation creating a streamlined compliance process.

 

Combining compliance and cybersecurity

Indeed, RegTech is a technology that has obvious benefits, but it should not stand alone. Rather, it should form just one element of an organisation’s multi-faceted effort to improve best practice and operational hygiene.

Here, cybersecurity has an intertwined role to play.

Simply being compliant from a regulatory perspective won’t protect you holistically. While it can provide a framework for overall best practice, companies must also be proactive in identifying their blind spots.

As we’ve already discussed, attackers are using complicated mechanisms to detect and attack networks. Therefore, companies must enhance their methods of protection and response.

Threat intelligence, for example, can automate response and mitigation processes by learning about possible incidents to identify an attack before it has even happened. Managed Detection and Response (MDR), meanwhile, can be used to contain malware, trojans, viruses and other malicious threats before eradicating.

These are valuable technologies, but to truly bolster a company’s defence, security practitioners must first understand how an attack might happen by studying vulnerabilities, and to some extent thinking like an attacker.

This should not be a siloed process – DIY doesn’t typically work for cybersecurity. External advisors should be consulted for the simple fact that greater diversity in decision making will likely result in greater innovation, and therefore greater benefits relating to reduced costs, process improvement, better protection and alike.

 

Capitalising on the opportunities

The arguments for RegTech, cutting-edge cybersecurity and external advisors may often be combatted by a series of roadblocks.

Beyond the perception of costs, management may feel that security enhancements will impede overall operational effectiveness, leading to these areas being regularly overshadowed by more traditionally commercial requirements. Yet, when considering the costs of what could happen, security must become a priority.

What are the risks? What are the potential costs of a breach? Or a violation fine? How might it affect our reputation? Such vulnerabilities need to be exposed and discussed transparently throughout all layers of an organisation in order to transform attitudes and build a wider awareness.

Additionally, better practices will lead to greater opportunities.

ISO 27001 compliance is a requirement many prospects will demand before even considering conducting business with a financial services company; in Ireland, the central bank is building a resilience framework that financial institutes will need to adhere to; and the UK is introducing new Financial Conduct Authority (FCA) legislation that will need to be adhered to by March 2022.

RegTech and cybersecurity are not simply a case of mitigating risk, but equally one of maximising opportunity. By being a first mover in compliance and security, a wider pool of potential customers can be enticed, and by placing these technologies at the heart of a digital transformation strategy, futures can be secured within what will continue to be a rapidly changing landscape.

 

Finance

FOUR STEPS TO INTEGRATING INTELLIGENT AUTOMATION IN THE FINANCE DEPARTMENT

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Marieke Saeij, CEO of Visma | Onguard

 

It’s clear that Intelligent Automation (IA) is still very much an emerging technology, with one indication being that is has only been mentioned a handful of times on Twitter since the beginning of 2021. Results from our latest annual FinTech Barometer reveal a mixed picture in terms of awareness, with half of finance professionals having never heard the term before. Whilst this is unsurprising for a technology concept very much in the ‘early adopters’ stage, organisations can stand to gain real benefits from embracing Intelligent Automation now, particular within the finance department. With this in mind, we explore some of these benefits and share a step-by-step best practice to implementing it into business operations.

 

Intelligent Automation ensures a predictable order-to-cash process

Such is the speed of introduction of new technologies that it’s a challenge for businesses to keep pace. As the newest innovation in finance, Intelligent Automation is one that organisations can’t afford to let pass by. It truly takes financial process automation to the next level. In addition to helping maintain a high-quality customer service, it also complements the existing skillset of finance professionals in the industry.

Marieke Saeij

While Robotic Process Automation (RPA) and Big Data are key innovations for the sector, IA can be likened to an additional layer that enhances existing technologies. By combining applications, this layer is capable of independently assessing situations and determining the appropriate process sequence. It can, for example, fully determine the risk of a specific customer, and can also predict at an early stage which invoices will be paid late, or even not at all, ensuring that finance professionals can then plan accordingly. The result is a reliable and predictable order-to-cash process.

 

The four steps to an IA-proof organisation

While the benefits of IA are numerous, implementing the technology can prove complex, although some are already treading the IA path without knowing it. In this instance it’s crucial to become aware and begin the purposeful process to full integration. Below are the four key steps to becoming fully IA-proof.

  1. Exploring the potential: Brainstorm where automation can be applied

Step one is to examine the extent to which automation can help your organisation. Blue sky thinking is the key here. What is the ideal relationship with the customer? What does the ideal order-to-cash process look like? In this phase, involving multiple departments from within the organisation is key, from management to operations. The finance professionals who have the most contact with customers are likely to have the strongest knowledge of which processes they would like to see automated. With no limits to ideas, it’s best to explore all the opportunities in the entire order-to-cash process and describe broadly the potential value to the organisation.

 

  1. Decipher which data and technology is needed

The second step is to map out which data and technology is required. Working with a specialist, either external or from the internal IT department, is beneficial at this stage to see where the opportunities lie. In many cases, off-the-shelf solutions are already readily available to help make the difference, so it pays to do the research and gain advice where possible.

 

  1. Firm up the strategy

With the plan mapped out, it’s time to fit the pieces of the puzzle together. Which technology and accompanying software is proving most valuable? It’s vital at this stage to analyse the results the organisation is achieving from deploying the right technology and software. It’s also important to outline any limitations and emphasising the potential risk of failure. This is the business case and the basis for the elevator pitch that will be presented to internal stakeholders.

 

  1. Draw up the roadmap and start benefitting from agility

The fourth and final step is prioritisation. The roadmap will describe step-by-step how to move from the undesired current situation to the desired end goal. In the first step, choosing a subproject that is relatively easy to achieve will help gain support from other departments within the business, and provide invaluable experience that can be applied to the more complex components that follow later. This agile approach facilitates a learn-by-doing mindset and allows the following steps to be tackled in a smarter and simpler way.

 

Effective preparation is half the battle

Exploring the potential of automation, mapping the required data and technology, establishing the strategy and laying out the roadmap are the four crucial steps to ensure the foundation for Intelligent Automation. Effective preparation and estimating which technology and accompanying software is needed will help to create a streamlined and error-free order-to-cash process. To ultimately save time and costs, empower finance professionals and maintain customer loyalty, the time for Intelligent Automation is now.

 

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READING BETWEEN THE BUZZWORDS: DISCOVERING THE POWER OF INTELLIGENT AUTOMATION?

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by Yad Jaura, Product Marketing Manager at Netcall 

 

The nature of automation means that new technologies, ideas and solutions are frequently developed and invented. New words and phrases are banded bandied around, with many similarities and discreet distinctions. A relatively recent buzzword in the business process transformation arena is Intelligent Automation.

Here I explain what is meant by intelligent automation. In doing so, I aim to unravel some of the terms that are intrinsically linked to automation and explain why intelligent automation can be so crucial for organisations in transforming business processes, fast.

 

So, what is intelligent automation exactly?

Put simply, it is the combination of multiple process automation technologies together into a single platform or solution. Those process automation technologies include low-code, robotic process automation (RPA), built-in workflow, integration platforms and intelligent business process management suites (IBPMS). Using any combination of these to automate business processes qualifies as intelligent automation.

 

And how is that different from hyper automation?

It’s very similar to be honest; they were created by the technology research analysts. Forrester coined the phrase intelligent automation, while Gartner came up with hyper automation. Essentially, they mean the same thing.

 

Define RPA and how that is a part of intelligent automation?

The simplest definition is that robotic process automation (RPA) focuses on automating repetitive and rules-based on-screen processes. Intelligent automation does the same job but in addition to using RPA techniques, it incorporates other artificial intelligence (AI) technologies (like machine learning, natural language processing, structured data interaction, intelligent document processing).

RPA when combined with Process as a Service technologies such as low-code can automate interactions with existing systems on a screen. In effect, what the robot is able to do is replicate the actions that a person takes when they are operating various different systems, and do those things automatically.

For example, opening a system, accessing some data, copying it, pasting it to another system, generating a report, emailing that report to someone. This is a process flow. And a robot can be instructed to replicate that exact process flow. It’s especially effective for repetitive and tedious tasks, the robot can take that activity and free your people to work on other more meaningful tasks.

 

Why is intelligent automation so important?

Releasing your people from the necessary but repetitive or high-volume tasks can open up endless possibilities. It’s extremely potent in a customer experience orientated environment because staff can use that freed-up time on activities that need more cognitive, imaginative and interpretive work and more complicated interactions with customers. It allows robots to perform the menial tasks freeing up people to concentrate on delivering a great experience for customers.

 

Can you trust a robot?

Yes. You have to select suitable tasks and you have to program it correctly. But you can absolutely trust that the robot will do EXACTLY the same process, with no deviation from what you asked it to do. RPA robots don’t make mistakes or stop for any breaks – for the right type of tasks, they are better suited to the work than humans are.

The analysts also believe that we need to put our trust in automation and software robots. I particularly liked this quote from a webinar we ran with Forrester in 2020:

“Every process within an organisation needs to be automated in software, or else be liable to failure, and the consequences of failure.”

I really like that, because for me, it provides a real-world definition of intelligent automation in practice. Intelligent automation is the automation of business processes at scale. Plus, the quote demonstrates where we are headed – the idea of automating everything in software, so that those processes can be operated from anywhere, at any time. It’s been proven in the last year, with lockdowns and restrictions, because processes are no longer reliant on people being in specific locations, with access to certain paper, machines etc in that location. Intelligent automation is really about process automation at scale, to address these issues.

 

If the potential is endless… will automation and robots take over everything?

People will always be needed in organisations. You need a human to build an RPA process – a robot can’t think of what is needed to build the set of tasks for another robot. Intelligent automation gives you the best of both worlds. Build faster, reliable processes that are virtually infallible. Use your people for the human interaction side of your business and for the planning, creative and intellectual responsibilities that only a human being has the ingenuity and talent to deliver.

Side by side, people and robots can develop highly competent, successful operations and deliver outstanding CX, every single time.

 

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