Connect with us

Wealth Management

The sustainability agenda could be a rallying point for the EU

Published

on

by Dr. Nicolas Befort, Chair of Bioeconomy and Sustainable Development at NEOMA Business School

 

In her recent State of the European Union address, Ursula von der Leyen compared the current push for sustainable transformation in the EU with efforts to rebuild the continent following World War Two.

The EU is firmly rooted in the post-war era desire to use the common market as a vehicle for peace and cooperation. The return of war to Europe, combined with the urgent need for ecological transition, is a challenge to those founding objectives and requires a major response.

Yet recent events, including tensions between Brussels and Budapest, pose a hurdle to European unity. In her speech, President von der Leyen advocated relaunching the EU’s integration effort through a convention to revise existing European treaties and promote sustainability objectives. Could the development of a greener way of living and conducting business be a unifying goal for all member states to rally around?

It is widely accepted that sustainable economies must cut their reliance on fossil resources and ensure their emissions are within planetary limits to keep global warming well below the 1,5°C threshold. Green energy projects must be undertaken with the objective of supplanting fossil fuels, not complementing them.

Businesses and governments need to know which policies and technologies need to be developed to promote this transition. Organisations such as the EU could play a vital coordinating role.

Joint European energy policies should support the gradual extinction of polluting industries. The current scarcity of renewable resources means their implementation must be directed in priority to sectors where they will be of most benefit to the largest number of people – such as in the healthcare, housing and education systems.

Achieving these objectives will require a significant level of innovation, and innovation on any scale is expensive. In the case of the EU’s plan to spend €3 billion on the creation of a hydrogen bank, mentioned in President von der Leyen’s address, the element of risk is colossal.

When investing in sustainable technologies, it’s never a good idea to put all your billions in one basket. If a technology is not as effective as initially thought, the potential negative rebound effects can take chunks out of the returns on investment. And, of course, any economies depending on this technology to replace fossil fuels could be seriously destabilised.

The answer to this is abandoning the mentality of investing in a single resource and moving instead towards a wide variety of resources, which can and must be channelled into directives with a high social impact value.

So, instead of pushing this level of capital into investing in hydrogen, the EU should instead split their funding between numerous technologies, with a focus to scaling them up for eventual commercial implementation. This will allow the production of energy and consumer goods to be relocated to European countries.

As well as coordinating the development of new technologies, the EU should set its hand to the rudder in steering regulatory action. The unveiling of the Green Deal in December 2019 was highly effective in helping to launch a wave of new economic policies geared towards the ecological transition.

Such policies aimed to support the development of “Farm to Fork” strategies, and the replacement of linear supply chains with the circular economy. In this case, the policies were directed by the overarching principles of the Deal, providing a sense of cohesion.

For new policies to be effective, they must create a regulatory framework encompassing both the supply and demand for renewable resources. Policies which focus too heavily on demand, without offering support to suppliers and manufacturers trying to reorganise their supply chains, risk causing market segmentation.

For example, governments setting a strict deadline for the banning of plant protection products will help accelerate the transition to more sustainable forms of agriculture. But they will also need to find alternative ways to prevent crop yields decreasing due to insect damage.

However, as with the approach to new technologies, attitudes to policy solutions must not focus disproportionately on any one factor. The carbon tax is a good example, such taxes may be effective, but only in combination with other tools such as regulations and innovation policies.

Strategies must be flexible and receptive to feedback from the general public as well as key sectors of the economy in order to encourage the transformation of industries that have the potential to cut their emissions and incrementally close down those that don’t. Policies should also encourage the emergence of new industries such as bioeconomy.

Finance

SaaScada Top Five Predictions for 2023

Published

on

By

From BNPL for business, to sustainability and financial inclusion, 2023 is going to be a year of change as the UK’s fintech darling status comes under challenge  

SaaScada, a cloud-native core banking engine, today released its predictions for 2023, offering insights for the financial services industry.

Nelson Wootton, CEO and Co-Founder:

We will see a surge of interest in ‘BNPL for business’ or Merchant Cash Advance

Much as we’ve seen an explosion of Buy Now Pay Later for consumers, as merchants tighten their belts and the economic outlook becomes even more challenging, we foresee great demand for BNPL style models of finance for B2B in 2023 – in particular, retail. For example, Merchant Cash Advances will enable merchants to receive stock and pay it off over a period of time – as that stock is sold to customers. This helps them to avoid big upfront capital investment, while the lender is repaid as each product is sold.

This model is extremely low risk for the lender, especially for wholesalers of non-perishable products, where the lending agreement can even include the flexibility to move unsold stock to another merchant. Lenders can also check in on the velocity of sales and track daily (or even hourly) against sales projections to help them understand their risk on the loan. For wholesalers or franchise style models, offering merchant cash advances will help to build new revenue streams, while strengthening the relationships with their key retailers by essentially providing them with stock for ‘free’.

Of course, for this model to work, the lender must be able to access real-time data insights into purchases from their customers. This means using a cloud-native core banking engine to connect modern and legacy infrastructure, create real-time event streams, and generate bespoke data sets.

The UK’s fintech darling status will be put to the test in 2023

It’s been a rocky geopolitical year with the global economic slowdown, the war in Ukraine – not to mention Brexit, the pound crash, and having three prime ministers in as many months. Big fintech valuations have shrunk globally, and funding rounds have been few and far between, as UK fintech investment plummeted from $27.8 to just $9.6 billion in the first half of 2022. So, when we look to next year, many will ask if the UK can hold onto its “fintech darling” status.

But to me, any doomsday hypothesising feels like a knee-jerk reaction. Investment naturally goes in cycles, and investors are always watching closely to see which areas are getting the best returns and recalibrating before they invest more. The UK fintech scene is bursting with a wonderful blend of finance and tech innovators who are up for the challenge, so I do not think that position in the industry will be lost.

In particular, fintechs who can harness data effectively are the ones to watch. The future is all about data – being able to predict and track changing customer needs, identify areas of trapped value, and gain a single customer view; it is these things that will enable them to gain a greater share of wallet, even during recession.

UK fintechs should also keep in mind that while they will continue to see investment, they will need to be more cautious with their spending as funding rounds may be slower, valuations lower, and investments more frugal than before. So being cost-conscious will be an asset.

FS firms will miss the Consumer Duty deadline if they can’t leverage customer data

July 2023 will see the FCA implement a new Consumer Duty, which will require the financial services industry to deliver products and services to meet real customer needs at a fair price. Under the new regulation, FS firms must give people the support and information they need to make informed financial decisions, which is particularly important in the current economic climate. But, many FS firms will likely miss the July deadline because they don’t have a complete picture of their customers and how to serve them best.

To meet the diverse needs of customers, including those in vulnerable circumstances and financial distress, banks must have a comprehensive customer view. But today, many banks and wealth managers may struggle to achieve that level of customer insight because they still operate under a cumbersome product-centric data model, in which relevant information is siloed.

With a cloud-native banking platform, FS firms are armed with granular real time insights into customer spending so that they can understand customer needs, assess their financial health, and make recommendations effectively. Without this level of visibility, firms will not stand up to scrutiny from the FCA, and could even face fines in cases of serious misconduct.

Next year, cloud-native core banking providers will become the holy grail for FS firms needing to comply with Consumer Duty, by helping to re-architect how core banking services are delivered. The granular level data can be used to drive hyper-personalisation, unearth opportunities to grow accounts, accelerate the design of innovative new products, and improve the customer experience.

Steve Round, Co-Founder, expects the following core trends will shape the financial industry in 2023:

FS firms will be forced to improve transparency around sustainability commitments

The UK led the way on green finance at COP26 by committing to create the world’s first Net Zero Financial Centre. Now, a year later, the FCA has proposed a UK sustainability disclosure regime. With the rules under review until January 2023 and expected to apply from 2024, FS firms must lay the foundations for sustainability reporting now to comply with future regulations.

Going forward, any organisation delivering banking services must be able to examine the environmental impacts of business operations, as well as the impact of partners. Therefore, FS firms will feel the pressure in 2023 to become more transparent about their commitment to Net Zero targets and sustainability initiatives.

Consumers have also become increasingly focused on sustainability, and want to know how their purchase decisions affect the environment. By collecting customer payments data and tracking environmental impact, FS firms have the potential to launch greener services and help reduce environmental impact for eco-conscious consumers. For example, using transactional data from customers to analyse the carbon footprint of their purchasing decisions – allowing them to make choices about where they spend their money or even choose to carbon offset against purchases. If FS firms fail to launch sustainable products and services next year, there is a serious risk that market share and customers will be lost to more eco aware competitors.

The rising cost of living will drive a new era of financial inclusivity

As the chancellor admitted in the Autumn budget, we are now in recession. More consumers – even those on middle incomes – may find themselves falling into the financially ‘vulnerable’ category, struggling to keep up with soaring mortgage rates, energy bills, and inflation. In 2023, banks will be under pressure to provide more targeted help and support to those that need it to ensure that people don’t fall through the gaps.  Customer insight, driven by comprehensive real time data, will be essential to allowing banks to identify those who are at risk of becoming vulnerable before it happens and help put plans in place to help the customer and avoid bad debt.

There will also be a renewed focus on financial inclusivity – and it’s critical that banks look at credit with fresh eyes. Expect to see banks focusing on designing practical products and services to help those who are struggling financially. Offering advice is one thing, but banks will also be looking to offer personalised and flexible offerings, such as having multiple wallets to help manage different bills and savings. To support their customers, banks will need to leverage their customer insights and technology to deliver more flexible banking solutions that make it easier for their customers to manage their finances. Or, they risk losing customers to competitors offering more feature rich products.

Continue Reading

Wealth Management

Keeping Cyber Insurance Premiums Down with Deep Observability

Published

on

By

By Mark Coates, VP EMEA, Gigamon

There is no doubt that the cyber insurance industry has experienced something of an evolution in the last five years. As the threat landscape has changed beyond recognition, so have the risk management strategies aimed at staying ahead of cybercriminals. The result is an exponential rise in premiums: 85% of cybersecurity business decision makers saw an increase in their cyber insurance premiums over the past 12 months, and 82% of insurers are expecting these rises to continue. Given that cyber insurance makes up a key component of many cybersecurity and business continuity plans, what can organisations do to keep premiums down while maximising coverage?

The key is to improve proactive protection and to embrace deep observability – employing real-time, network-level intelligence to track activity across a network. Deep observability provides IT and security teams with the ability to amplify the power of their current log and trace-based monitoring tools, rapidly detect suspicious activity and act accordingly. Achieving this ‘single source of truth’ also helps to reduce complexity and cost – a crucial benefit as premiums continue to rise and we enter a tougher economic climate.

Where it began

Against the backdrop of increasing cybercrime, the ‘NotPetya’ attack was a landmark cyber-threat for various reason. Perhaps most significantly it signalled the beginning of cyber insurance premium rises. Launched in 2017, NotPetya was a malware launched as part of a Russian state-sponsored cyberattack campaign targeting Ukrainian IT infrastructure. Beyond financial setbacks for global organisations, NotPetya’s proliferation caused the drastic rise of premiums and lowering of coverage limits, as insurers adjusted their policies to reflect the changing cyberthreat landscape.

Since then, a global pandemic and the subsequent shift to home or hybrid working created a perfect storm for the rise of ransomware. This form of cybercrime can cause such large-scale and financially destructive consequences that insurers have had no option other than hike up prices for more vulnerable businesses in order to stay profitable.

Zero Trust is an essential

With challenges comes opportunity. This upending of the cyberthreat landscape serves as a potential catalyst for organisations across verticals to optimise their cybersecurity.

According to the recent Gigamon State of Ransomware report, phishing and malware were the top routes for ransomware attacks in 2022. Cloud applications were also cited as a common ransomware attack vector, particularly by those in the UK. Protecting against a misconfigured cloud or human error isn’t the job of cyber insurance – this should be reserved to cushion the financial blowback in the event of a breach. Instead, enterprises must proactively take steps to bolster their security posture.

This includes ensuring all access across digital infrastructure is authenticated. Trust is earned, not freely given in this threat landscape. A Zero Trust architecture – which requires authentication of all users regardless of their position in an organisation – helps prevent unauthorised access and works to restrict suspicious lateral movement across a network. Fortunately, it’s now a topic regularly discussed in Boardrooms. Across EMEA in particular there is growing confidence that organisations will be able to implement this architecture in the next few years (51% agreed in 2020, compared to 83% in 2022). To get there, however, deep observability is a critical foundation; you simply cannot manage and grant access to what you cannot see.

A single source of truth

Threat actors can bypass SIEMs and endpoint detection and response tools, yet they will always leave a metadata trail. This is why deep observability is so crucial to cybersecurity. It grants security operations (SecOps) teams the ability to analyse this metadata, spot suspicious behaviour and take the appropriate steps to mitigate an intrusion before it escalates. Such enhanced visibility and control are crucial for maximising the efficacy of Zero Trust architecture and fostering a security-first approach within an enterprise.

With premiums so high, organisations also undoubtedly want to turn to solutions that provide ROI as well as better security. As more tools come into play, cost and complexity rises. Many enterprises will not have the budget to keep adding more solutions to their technology stack in hope they will improve their cybersecurity and reduce their insurance prices. Instead, they need a single source of truth and a complete view across the entire IT infrastructure – cloud included. From here, teams can identify network bottlenecks and eliminate irrelevant, duplicate or low risk traffic. Deep observability is therefore not only a must for security, but also for making budgets go further.

Organisations need to brace themselves for a challenging economic down-turn and continued rises in cyber insurance premiums by implementing a strategy based on Zero Trust, deep observability and network-to-cloud visibility. In turn, security teams can be far more confident in their security posture, business leaders are satisfied by a lower spend and insurers become more confident when taking on their customer’s risk.

Continue Reading

Magazine

Trending

Business14 hours ago

Ransomware chokes COBRA: How AI-powered data analysis can support financial services’ plight

By Toby Butler, Financial Crime Solutions Manager at Ripjar   Ransomware attacks are on the increase in the United Kingdom....

Banking21 hours ago

How Banks Can Boost App Innovation, Speed and Compliance

Steve Barrett, Senior Vice President of International Operations, Delphix  As new finance and banking applications disrupt the market each day,...

Business21 hours ago

SVEA BANK ACQUIRES AREX’S FINTECH OPERATION IN FINLAND

AREX Markets, the data-driven FinTech company that drives financing costs down for SMEs and enables them to get paid quicker, has...

News21 hours ago

ICICI Lombard and AU Small Finance Bank announce Bancassurance tie-up

ICICI Lombard General Insurance, India’s leading private sector non-life insurance company, is entering into a Bancassurance tie-up with AU Small Finance Bank....

Finance21 hours ago

Crypto’s tipping point

Chris George, Senior VP of Product at Somo argues that Crypto needs to improve its scalability to be taken seriously Cryptocurrencies are...

Business4 days ago

Why Procurement is key in delivering your ESG strategy

By Edward Cox, Principal at Efficio Consulting   Environmental, social, and governance (ESG) has shifted from a niche to a...

Finance4 days ago

Skedadle to change the game for advertising with Currencycloud partnership

Currencycloud, the experts simplifying business in a multi-currency world, has partnered with Scottish start-up app Skedadle to provide its users...

Finance4 days ago

How financial services organisations can harness the power of low-code/no-code

By Joman Kwong, Strategic Solutions Manager, Financial, at Laserfiche   The UK’s erratic economy, and its spiralling cost-of-living crisis, have...

Finance4 days ago

SaaScada Top Five Predictions for 2023

From BNPL for business, to sustainability and financial inclusion, 2023 is going to be a year of change as the...

Business6 days ago

Hidden channel costs: how to find and tackle them

By Mark Wass, Strategic Sales Director, UK and North EMEA at CloudBlue     Growth for businesses will always be a...

Finance6 days ago

Is your business ready for finance automation?

Mari-Frances Bentvelzen, Business Head and General Manager of Global SMB at SAP Concur   As managers continue to drive their...

Top 106 days ago

The power of a proactive customer service

By Delia Pedersoli, COO, MultiPay   2023 is shaping up to be another challenging period for B2C businesses. While the...

Business6 days ago

Automation nation: Liberating workers from desks, data entry and the doldrums

Gert-Jan Wijman, VP of EMEA at Celigo.   Just when businesses thought the tough times were over, even more challenges...

News6 days ago

Protean and Fino Payments Bank tie-up to expand PAN card issuance services in India

Fino Payments Bank has tied up with Protean eGov Technologies (formerly NSDL e-Governance Infrastructure Limited), a market leader in universal,...

Business6 days ago

What is the True Cost of SMS Phishing?

Gemma Staite, Threat Analytics Lead   Cybercriminals will recycle attack strategies for as long as they are effective. In Fraud...

Technology7 days ago

Digital Asset Management (DAM) To Transform Enterprise Brand Management

Alexander Rich, Co-founder and CEO – Desygner    Rapid digital transformation fuelled by the pandemic has undoubtedly proven beneficial to...

Finance7 days ago

Cost of living: How to identify vulnerable customers

Ellie Engley is account director at REaD Group   In the current climate, the cost of living crisis is a...

Banking7 days ago

Is traditional business banking the best option for SME finance squeezes?

Airto Vienola, CEO, AREX Markets  The pressures facing business and personal finances alike have been well documented. Stories are now starting...

Business7 days ago

Breaking down communications silos to streamline the customer experience

Dave Tidwell, Head of Technical Pre-sales, DigitalWell   The pandemic has, without doubt, moved the goalposts when it comes to...

Business7 days ago

How growth can be a big challenge when a business becomes multiple entities

By Paul Sparkes, Commercial Director of award-winning accounting software developer, iplicit. Organisations don’t just grow in size – they also...

Trending