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THE EVOLVING ROLE OF THE CHIEF FINANCIAL OFFICER IN 2020

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Byline: Mohamed Chaudry, Group CFO of FoodHub

 

Traditionally, the role of the Chief Financial Officer (CFO) has been unambiguous. As the senior executive responsible for managing a company’s financial actions, the CFO tracks cash flow, provides financial analysis and planning, and takes evasive action when things aren’t looking quite right. It’s a role that hasn’t been around that long – the first companies began appointing CFOs in the mid-1960s. But until recently, little in the remit of the CFO had changed. As we’ve moved through the first two decades of the 21st century, however, CFOs have slowly begun to take on other duties, adopting responsibilities once the concern of other senior professionals. Now, with COVID-19 necessitating significant structural changes throughout the corporate ecosystem, and the shortening boom-bust cycle we’re experiencing,  what does it really mean to be a CFO? And what skills now lie at the core of the role?

 

How the Role of the CFO is Changing and Why

What is expected of today’s CFOs?

While financial acumen remains essential to the contemporary CFO, it is no longer enough for the successful fulfilment of the role. Real business perspicacity is required too. As is technical understanding – because as quickly as the CFO role is developing, technology is changing even faster. And it is impacting the very core of the CFOs responsibilities. While knowledge of banking and investment used to be enough to get by, anyone wishing to hold the role today also needs to understand the changing face of the payments industry. Not just cognisant of the fact that payment gateways and the like exist, but possessing a real understanding of how to identify the best for your company’s needs, how to implement those choices so that there is minimum disruption to your company and your customers. And that’s just the start.

 

Mohamed Chaudry

Technology and the CFO

In my role as Group Chief Financial Officer of FoodHub, tech plays as much of a role as financial ability. A simple example would be applying Sage ERP – an essential of the job that now requires an understanding of operating not just one entity, but multiple operations, multiple departments, multi-currencies, different jurisdictions and taxes – and how all of that impacts the platform on a technical and developmental level. Hacking and data protection are integral to every element of the process. A completely firm grasp of cloud technology and how it can assist the growth and reduce the overheads of a business is essential. And when dealing with developers, CFOs must understand what is being undertaken, its potential to impact the business, and the associated risks.

While many of these concerns would also fall within the remit of a CTO, the CFO must be involved in the processes in order to accomplish their objectives. This has led to a fluidity within the roles, where responsibilities are intermingled, and C-level roles somewhat merging.

It’s not just technical either, there’s a huge emphasis on operations too. In a high growth technology business I am involved in tackling operational problems relating to Human Resources, Marketing and Legal compliance.  The role is no longer just about simply monitoring, but becoming actively involved in, pushing for efficiencies and cost cutting.  FoodHub employs 800+ staff and my role also includes  monitoring staff and operational benchmarks as well as involvement in implementing new policies and procedures.

 

Why is the CFO changing?

The simple answer to that question is, ‘through necessity’. As discussed, technology, in particular, has influenced the CFO role. As it develops, it influences everything it touches. Operating models are becoming increasingly complex, stakeholders now have completely different requirements. But tech is not the only instigator of change. There are environmental factors too.

The global economic downturn of 2009 saw CFOs firefighting as the boom and bust cycle shortened. And it’s continued to shorten since. Prior to that time, the typical boom period was +10 years. Now, it is approximately 8 years and reducing. The runway is shorter, meaning that CFOs need to be as much about strategy as accounting. Planning for diversification in order to weather out the bust following a short burst of growth is as important as being able to take control of the company’s accounts. And at the moment, we’re working through another seismic event that will have its bearing on the role of the CFO – COVID-19.

 

How has Covid-19 impacted the role of a CFO?

Covid-19 has changed so many things. For the CFO it means stepping up another gear. Not just planning for stock control, but understanding whether the business can weather another lockdown, or further consecutive lockdowns. It means fully understanding your industry and making the decision about whether it’s possible to accelerate growth, or if it’s time for an inevitable slow down. It’s about searching for means of diversification, and forward planning to not just prepare for further Covid repercussions, but preparing for the next big scenario too, calculating what that might feasibly be, and how your business can survive.

At present, best estimates are that COVID-19 will impact businesses for 3 years or more. Company survival will depend very much upon the CFOs actions right now.

 

The future of the CFO?

Since its creation, the CFO’s role has always been integral to the success of a business. The changing expectations associated with the role now makes it even more important. But it begs the question of what the future of the role might be.  Based upon my experiences, I can only predict a further blending of the roles. The jury is still out as to whether C-level roles can or should be merged and the effectiveness of those changing roles in a fast paced SaaS business. However, one thing is certain, the skills needed in the roles do overlap and as successful CFOs, we need to adapt, learn, pivot with the changing world. Only that way can we hope to do the best for the companies in our care.

 

Business

Dissecting the expansion of online checkouts

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By

Daniel Kornitzer, Chief Business Development Officer

 

Card payments have long existed as the preferred payment method for online consumers. But in recent years we have begun to see a rise in the use of alternative payment methods. Although card payments continue to serve the majority, it is becoming increasingly clear that consumer preference is diverging rather than reaching a consensus. Across the globe local preferences have developed as eCommerce has grown, and across the global digital payments landscape card payments are being passed over for new ways to pay.

Alternative payment methods are on the rise as they address several of the hurdles which have prevented cards from achieving total rule over consumer preference for online payments. Here are four key reasons for this:

  1. Alternative methods offer a superior consumer experience, particularly when it comes to mCommerce. With the rise of new regulations such as Strong Customer Authentication and developments in Open Banking, alternative payment methods can be faster and easier to use for consumers.
  2. New payments methods such as crypto are growing in popularity thanks to a more attractive offering to consumers such as lower cross border payment fees.
  3. With the digitalisation of services forcing many customers to pay online for the first time and many experienced online shoppers looking for more secure ways to pay, the security of financial data is a major concern. Alternative payment methods can protect customer details by removing the need to share bank details at the checkout.
  4. Not all consumers have bank accounts or a debit card. By offering alternative payment methods businesses are enabling these customers to join the digital economy.

Daniel Kornitzer

Businesses have been watching these trends closely and are constantly looking to improve their checkout experience for consumers accordingly.

 

The impact of COVID-19 on online payments

The need for businesses to expand their online checkout to meet changing consumer expectations is not a new trend. However, it has certainly been accelerated by COVID-19. The majority of businesses agree the pandemic has shifted consumer payment preferences, with alternative payment methods gaining in popularity.

Research shows businesses have seen more alternative methods chosen at their online checkouts with a greater percentage of consumers choosing digital wallets (57%), mobile wallets (39%) and eCash (28%). This has caused businesses to reconsider the way they understand payments, looking beyond traditionally methods to newer consumer friendly alternatives. With this is mind, reports suggest more than 60% of businesses are now making improving their checkout a top priority to fulfil the new high standard of consumer expectations.

 

Businesses are actively expanding their online checkouts

If we compare data from 2020 to 2021 on the payment methods offered or planned to be offered by businesses in the next one to two years, the trend is clear.

The number of businesses not offering or not intending to offer alternative payment methods is falling, as more and more start to recognise the importance of offering choice at the checkout. In the last year alone the increase in the adoption of alternative payment methods has risen dramatically, particularly crypto and eCash. As businesses begin to understand the urgency of upgrading the checkout experience, it is clear that alternative payment methods will play a key role in making this a reality.

 

Establishing crypto as a key player

One of the most interesting areas of payments which businesses should be watching is crypto. Research shows businesses are already backing this trend with almost half considering adding crypto as an alternative payment method as an immediate priority, believing it will help them reach new markets, and more than 50% already have confidence in crypto as the future of payments.

 

Diversifying the checkout as a form of defence

As well as offering a better customer experience and reaching new markets, businesses are expanding their checkouts with alternative payment methods to combat other familiar problems.

Most businesses see their current levels of cart abandonment as an issue, with research showing almost half have experienced an increase in levels of abandonment at the checkout in 2021.  Businesses consider two of the most significant causes of this to be card declines and absence of the customers’ preferred payment method. Offering alternative payment methods is an effective way of tackling these problems at the checkout.

The rise of fraudulent transactions is also becoming a more pressing concern for businesses, with the number of fraudulent transactions increasing since the start of the pandemic. Diversifying the checkout with alternative payment methods can be used as a valuable strategy to lower fraudulent transactions.

 

Looking to the year ahead

2022 looks set to be another year where we will see businesses continue to adopt new payment methods at their online checkout in a bid to keep up with consumer expectations.

By working with a leading payments partner, businesses can benefit from access to a range of payment methods through a single API integration, allowing ambitious plans to become a reality in the year ahead.

All data from this article is taken from our recent research report Lost in Transaction: Finding competitive advantage at the checkout.

 

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How bug bounty programs can help financial institutions be more secure

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By

Rodolphe Harand, Managing Director at YesWeHack

 

Financial services have been one of the most heavily targeted industries by cybercriminals for several years. One alarming stat from the Boston Consulting Group found these firms to be 300x as likely as other companies to be targeted by cyberattacks.

Furthermore, the pandemic has led to a significant increase in the number of cyberattacks targeting financial institutions (FIs), with around 74% experiencing a spike in threats linked to COVID-19.

With FIs holding some of the largest collections of sensitive and private data, it’s clear they will remain an attractive target for malicious actors, especially as any data stolen can be used for fraudulent activities. This leads to the reputational damage of the financial entity that was compromised and has a knock-on effect in terms of monetary and reputational damage to affected customers.

For CISOs at FIs, the conundrum faced is how do you protect intellectual and customer data, and ensure accountability and transparency for clients and stakeholders, at a time when the pandemic has created budget constraints. Research from BAE Systems found that last year alone, IT security, cybercrime as well as fraud and risk departments had their budgets cut by a third.

Below we look at how bug bounty programs can help to address these pressing issues.

 

Protecting valuable data

Protecting customer and intellectual data has always been a top priority for FIs. However, as opportunistic cybercriminals have a lot to gain by stealing this valuable data, there is a constant evolution of threats, which means FIs must stay on their toes. By deploying a bug bounty program, FIs can work with ethical hackers that have a wealth of experience and unique skills when it comes to identifying security weaknesses within a FI’s defence, thus helping to implement effective security measures to help prevent data breaches.

Building trust among various stakeholders such as customers, suppliers and investors is critical for achieving business goals. By deploying a bug bounty program, FIs send out a message that they care about protecting the security of the data of those they work with – which in turn can have a cascading effect resulting in better business performance.

 

Improving accountability  

For FIs to win customers and keep them happy, amidst the growing threat of neo banks and customer-centric fintech organisations, speed of innovation is crucial. As such, many FIs have adopted an agile approach to build, test, and release software faster to bring online and mobile banking solutions to market quicker. However, this can create frictions between development and security teams. Security mandates are deemed to be unnecessarily intrusive and a cause of delayed application development and deployment.

Yet, with DevOps teams needing to build and deploy applications faster than ever before, an epidemic of insecure applications has emerged. According to Osterman Research, 81% of developers admit to knowingly releasing vulnerable applications, while research from WhiteSource found 73% of developers are forced to cut corners and sacrifice security over speed.

With developers often not having the time, tools, skills, or motivation to write impeccably secure code, there is an evident need to provide developers with more support when it comes to building applications securely Fortunately, bug bounty programs can provide a “fact-based” financial implication of inherent security flaws within the process. This makes it possible to hold development teams and service providers accountable for creating or delivering insecure products, thus addressing inherent security gaps within the business units and helping to drive continuous improvement.

Moreover, security awareness and education of developments teams can be improved significantly for those developers that are directly involved with the management of vulnerability reports for their bug bounty programs. This is because, the mere fact of exchanging information with ethical hackers, or assimilating the thinking of a potential hacker and having proof of concepts of vulnerability exploitation on their application components, naturally accelerates consideration of security early in the development stage and provides ongoing learning.

 

Get more return on your investment

According to Gartner, 30% of CISOs effectiveness will be directly measured on their ability to create value for the business. When security budgets are challenged, CISOs need to demonstrate business value through initiatives designed to enhance efficiency whilst stretching the dollar.

This is where bug bounties can help tremendously. Compared to conventional penetration testing, bug bounty offers a fast, complete, and measurable return on your security investment, with businesses only paying out for successful discovery of vulnerabilities. Equally, businesses get access to hundreds of ethical hackers that can test their programs, each with their own unique skillsets as opposed to only one skilled researcher testing the network. This results-driven model ensures you pay for the vulnerabilities that pose a threat to your organisation and not for the time or effort it took to find them.

Bug bounty programs also deliver rapid vulnerability discovery across multiple attack surfaces. With this approach, organisations receive prioritised vulnerabilities and real-time remediation advice throughout the process to accelerate the discovery of, and solution to vulnerabilities.

Another appeal of bug bounties is that due to the continuous nature of testing, more vulnerabilities are found over time as opposed to pen-testing. This is key to financial institutions that require agility to keep up with the continuous roll-out and updates of applications.

 

The cornerstone to a successful security programme

The risk posed to financial institutions by cyber threats will only continue, as evidenced by the number of data breaches seen in recent times. The COVID-19 pandemic has only exacerbated these risks, especially with almost all FIs having needed to shift to a remote working environment – which has only widened the attack landscape.

For FIs, a bug bounty program should be considered a fundamental cornerstone of any security strategy, with it being a modern-day cybersecurity solution that is well-equipped to tackle the immediate security challenges they face. In doing so, FIs will not only prove to customers and stakeholders their commitment to data protection and security but this will also be help them to avoid the monetary damages that could be imposed by regulators if a breach was to take place.

 

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