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STRENGTH IN NUMBERS: WHY COLLABORATION IS KEY TO SECURITY IN FINANCIAL SERVICES

By Scott Cutler, Director, UK&I Sales, Fortinet

 

Anyone with a passing knowledge of heist movies will know that the best time to strike is when the target is in transit. With that in mind, it’s not hard to see why cyber-criminals have more opportunity than ever before to attack businesses across a range of verticals.

The volumes of data moving between multiple public and private cloud services and applications – via a huge array of internet-enabled devices – are massive and growing. Nowhere is this more applicable than in financial services, where businesses must remain in constant flux to meet consumer performance expectations, often processing and delivering data in real-time.

In some ways, this is exciting – driving business growth and the consumer experience. But it’s also placing an unprecedented security strain on an industry which needs to find new ways to protect itself and its customers.

 

Keeping pace with criminal intent

IT infrastructure has come a long way. The growing adoption of SD-WAN is a prime example of this, helping organisations to increase efficiency and enable digital transformation. But for every advancement in IT, businesses have to develop cybersecurity strategies to match – all while grappling with savvy criminals, ready to make the next move.

As a result, the modern threat landscape is varied and growing. Whether it’s threat actors exploiting SD-WAN weaknesses, coordinated phishing campaigns, rogue employees, Trojan malware, or lone wolf hackers-for-hire, cyber-attacks and data heists now pose a huge threat to the economy of the financial services sector.

In North America alone, it’s estimated that ‘the average cost of a data breach will be over $150 million by 2020, with the global annual cost forecast to be $2.1 trillion.’ The interests at play in each of these breaches are varied, but range from a sale on the dark web to alleged political manipulation at a grand scale. While the Cambridge Analytica Facebook data scandal is hard to quantify in monetary terms, others are more concrete. In 2018, American bank SunTrust suffered a breach that potentially exposed 1.5 million records – while Capital One recently disclosed a breach that impacted 100 million people.

 

Scott Cutler

Collaboration over competition

Financial services have to keep evolving, whether it’s offering 24/7 account access on the go, or driving forward new innovations in payments. However, it’s also crucial to underpin the customer experience with cybersecurity systems to match. Investing in the right tools plays a huge part in this, whether that’s firewalls, security tokens, or anti-virus programs.

But vulnerabilities remain. The financial services industry needs to look a little wider, and explore how organisations can collaborate (rather than compete) with each other to tackle threats. In doing so, they can create safety in numbers – sharing knowledge, spotting threats and developing solutions faster. And, in the age of Open Banking, ensuring a consistent security posture across the broader data ecosystem.

Some are already making strides towards this, and proving the benefit of a unified approach. In the US, more than 100 industry experts from the financial services industry came together in 2017 under a cyber resilience initiative called Sheltered Harbor. The goal is to provide members with an extra layer of security, so that if one falls victim to a cyberattack, another bank takes over, ensuring customers experience minimal disruption.

In the UK, a similar initiative took the form of the Financial Sector Cyber Collaboration Centre. Through this, several banks, securities exchanges and insurance firms have come together to fight cybercrime, and collaborate with the National Cyber Security Centre (NCSC) and National Crime Agency (NCA), in a faster, more coordinated way.

 

Light at the end of the cyber-tunnel

The appeal of a collaborative security approach is clear. However, there’s still work to do – not least because security experts face a confusing array of products, including access control, data confidentiality, privacy, and breach prevention. And products from different vendors may not work effectively with each other – so businesses must also try and prioritise investments in tools that support, not impede, collaboration.

Ultimately, this protection has to be seamless, meaning that interoperability between systems is as important as the systems themselves. Information must be easily and safely shared and the various tools must work together.

When these parameters are in place, an organisation can get the best possible protection for its particular needs, whether across endpoint, network firewall, or cloud environments. Just as importantly, businesses can gain access to the shared knowledge of multiple cybersecurity firms working together to detect threats. This approach offers safety in numbers – and for financial services, it may well be the future of protection.

 

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Finance

HOW TO MANAGE YOUR CASH FLOW IN UNCERTAIN TIMES

CASH FLOW

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.

 

Daily forecasting

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.

 

Good house-keeping

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.

 

Embrace technology

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.

 

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Finance

HOW FINANCIAL SERVICES CAN GET TO GRIPS WITH RISING SUPPLY CHAIN RISK

FINANCIAL SERVICES

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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