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UK small businesses lack individuality

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Out of the 5.7 million private businesses registered in the UK, 96% of them are classed as micro businesses employing nine people or less. This also includes many businesses within the finance sector. These small businesses are the backbone of the UK economy and their contribution is vital to driving financial growth, which will open new markets and create employment opportunities.

With a number of financial regulations, such as MiFID II and GDPR, coming into force in 2018, it would be natural for businesses to spend time focusing on these rather than other aspects of the business. This includes branding and marketing, for example.
With the Internet being the nation’s first port of call when making purchasing decisions, it is more important than ever for financial businesses to ensure they are not only searchable, but memorable, amidst a constantly changing financial landscape.

Jake Amos, Head of UK Marketing, Vistaprint

Vistaprint recently conducted a study analysing the websites of 1000 small businesses in the UK. The findings published in the Small Business Uniqueness Report found that many small businesses were lacking in distinct branding. The report highlighted that many businesses used the same colours, fonts and words to describe themselves, leaving them at risk of fading into the background. The benefits of being able to communicate what makes a small business unique leads to better brand awareness, recognition and recall which are all vital for long term success.

 

There were five main branding pitfalls highlighted in the Small Business Uniqueness Report:

Poor business descriptions

  • 68% of small businesses, including those in the finance sector, are not adequately describing their business online, with some not describing their offering at all. By failing to describe themselves they may be attracting fewer new customers and impacting on customer retention.
  • To avoid falling short, businesses within the financial sector should think of the best way to describe their business effectively, so they can differentiate themselves from their competitors. How well you describe your business may give you a big advantage over someone offering a similar service. This can also help improve SEO so you are more likely to appear in relevant web searches.

Over used clichéd adjectives and jargon

  • 33% of small businesses use clichéd adjectives to describe themselves. Vistaprint’s research found: friendly / independent / family-run / experiences were some of the most frequently used adjectives.
  • If too many businesses use the same language (which can sometimes be seen as jargon) they are at an automatic disadvantage due to sounding the same as other businesses.  While it’s difficult not to repeat cliched adjectives, one thing you can do is look at what your competitors in the financial space are doing and ensure your language differs and is more engaging for your audience.

 

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Financial Services Tech Leaders Summit Takeaways: IT and Data Crucial to Business Success

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By Dominie Roberts, Portfolio Development Director at DTX

 

The Financial Services Tech Leaders Summit is the leading digital transformation event within the finance sector and addresses the role data and technology plays as the industry evolves to meet consumer demand. Aimed at digital and IT executives from banks, financial services, and insurance companies who are involved in the execution of the digital transformation of their business, the event explored the different ways businesses are able to fully optimise digital transformation strategies.

With a range of panel guests and speakers demonstrating their knowledge on key digital transformation trends shaping the finance industry, there is much to unpack…

Adopting an employee and customer first approach

In the past, organisations have had to make a choice… do you put your customers first? Or your employees (relying on the hope that happy employees mean happy customers)? Today, the choice is not quite as clearly defined and organisations must actively invest in both their employees and their customers equally. Of course, with this comes added costs, but these investments are critical to ensure your business succeeds in an increasingly competitive and people-first sector.

If you want to keep your best people, avoid the word “deadline”

The way we work has changed dramatically in recent years but many financial services organisations are still finding their feet when it comes to defining their working culture and expectations. Given the challenges many businesses are facing when it comes to a skills and talent shortage, your company culture has never played a more crucial role in defining the talent you attract and retain. Some of the newer players in financial services are finding that the key to keeping their best people has been to allow for flexible and agile ways of working, but the question remains, does this work for every organisation?

There are two sides of the customer personalisation coin: Protection & Experience                                                                   

When we talk about the sharing of customer data and the advantages of personalisation, we so often focus on the business benefits, i.e. the ability to offer new products or services which meet customer habits, thus unlocking new revenues. But do we need to change the narrative and shift focus to the consumer benefits? For instance, how are we using data to protect customers? Perhaps by putting the knowledge and power into the consumer’s hands, financial services organisations can derive even greater insights, benefiting both the customer and business.

IT must be considered an integral part of any business transformation

Five years ago, IT was seen as something organisations spent money on in order to operate, but today, technology plays a mission-critical role when it comes to saving costs and generating new revenues. IT and data teams are a key asset, and in most successful organisations, technology and business strategy goes hand in hand. Good governance around IT and an outcome-first approach to transformation is sure to bring success far quicker.

You need the right people on board who can deal with regulatory demands

It starts with building personal relationships with regulators and being proactive, e.g. making sure your infrastructure is mapping into all regulatory channels, across jurisdictions if necessary. When there are many legislative masters this is the only way to respond quickly to any changes and it is good practice to take the most stringent regulatory standard and work from there when implementing an optimum control. You would have probably done it anyway – regulators should not be telling you something you don’t know already.

2023: Use of traditional building blocks, impact of AI learning, drive for automation and staying compliant

The traditional building blocks – people, technology and data – are still the right things to be focusing on in 2023, built by smart people and involving all audiences in how it is brought to life. There will continue to be a move away from legacy, but getting rid of it entirely any time soon for an incumbent bank is not realistic. As banks start to organise systems and data they will be increasingly looking at how they use AI learning to improve the customer experience and automation to improve processes. Staying compliant when you are transforming infrastructure will be essential as digital legislative demands on the industry grow. Look to make regular small changes, be transparent and adapt.

Setting resilience goals is critical

As financial services organisations prepare to mitigate impact from uncertain times ahead, operational resilience becomes a key objective. But, what does this mean for your business? Be sure to define exactly what ‘operational resilience’ means for you in order to put in place an action plan if your (workplace) fear becomes a reality. Once you’ve done this, resilience must be embedded throughout your underlying infrastructure (as opposed to being an add-on or an afterthought) to ensure you remain “digitally immune” for what may lie ahead.

Significance of the Multi-cloud

We can all agree that the benefits of moving from on-prem to the cloud are vast, however it’s impossible to ignore the risks associated. Regulators are more switched on than ever to the financial services sector’s increasing reliance on the cloud and you are therefore strongly encouraged to choose a multi-cloud strategy that becomes the backbone of your transformation.

Cloud migration journeys have been slower than anticipated

It may be no surprise but when it comes to expected timelines, there is often a disconnect between a cloud migration strategy and the execution. This means that the promise of true digital transformation has been much slower than originally anticipated. In order to close the gap between the strategy-setters and the practitioners, businesses must identify a process where cloud migration is continuously monitored and adapted to hurdles and feedback along the way.

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Shutting off mule accounts to effectively tackle APP fraud

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Cleber Martins, Head of Fraud Management for Banking at ACI Worldwide

 

Authorised Push Payment (APP) fraud is on the rise. Losses from this type of fraud are expected to record an average CAGR of 21% from 2021-26 in the UK, US and India. To combat this rising threat, late last year the Payment Systems Regulator (PSR) published new rules for banks and building societies regarding the reporting of APP fraud.

While losses won’t keep pace with the overall growth of real-time payments, banks shouldn’t be complacent regarding the risks. And though it’s true real-time payment channels have created a reality where fraudsters can succeed faster, it is mule accounts that allow them to keep getting away with it.

Fraudsters recruit mule accounts often through identity theft, turning a user’s account into a mule account without their knowledge, or by recruiting and targeting more vulnerable people on social media and other online communication channels. Thereby enabling criminals to hide their identity and quickly move stolen funds beyond the reach of banks and authorities, either through other mule accounts at different banks, or by buying crypto or NFTs. This is why, in order to effectively tackle APP fraud, banks need to shut off these mule accounts once and for all.

Banks battling back

Currently, most banks only tend to check outgoing transactions. This means that when a mule account suddenly receives money from numerous different accounts, following little to no activity, it’s usually not picked up. And this needs to change.

Cleber Martins

When battling back on scams, banks need to have the appropriate Know Your Customer (KYC) standards. Thus allowing them to monitor the money coming in as well as out of customers’ accounts and analyse the user behaviour of those accounts. This all helps banks to monitor for synthetic and stolen identities in relation to the money coming into accounts.

Being able to monitor and analyse all the data in real-time requires machine learning algorithms with rich contextual information. Put simply, these models are only as good as the signals and inputs they have been given. This means the more financial institutions – on both the sending and receiving end of the transaction – collaborate on signal sharing, the better they can target mule accounts. Additionally, more data and more accuracy should also lead to a decrease in the number of false positives and an improved user experience for legitimate customers.

To effectively shut off the supply of mule accounts, better collaboration and data sharing between banks and financial institutions are needed and with the introduction of the new PSR rules, we could see this quickly come to life.

Why receiving banks must be held accountable

There’s currently almost no risk at all for receiving fraudulent transactions into mule accounts, despite hosting the mule accounts used by fraudsters to receive stolen funds. This results in most banks doing little to no monitoring or analysis of the money coming into accounts. And little to no meaningful intelligence being exchanged between the two ends of a transaction. To turn the tide on scammers, this needs to change.

The Payment Systems Regulator (PSR) has said that in addition to putting mandatory reimbursement for most victims of APP scams, liability should be split equally between initiating and receiving banks. Unless the receiving bank can prove it has gone to greater lengths to do it’s checks, in comparison to the initiating bank, resulting in the initiating bank being held more financially liable.

This should incentivise a major shift in how banks monitor fraud activity, by increasing how they monitor the money coming in, in combination with behavioural profiling of the receiving accounts. Ideally, once the two sides of a transaction are working together, a “fraud DNA” can be constructed to enable more precise decision making. One strand of that DNA, in practice, would be the initiating end’s sending an intent for a real-time payment, including intelligence about the initiating account in metadata format. The receiving end would then correlate that with their own, thereby adding the second strand of intelligence to the DNA chain. Finally, a decision would be made as to whether to allow the transaction to be completed.

This increase in collaboration between banks, would symbolise the first step of building a framework that promotes the sharing of insights and could mean the end of mule accounts as reliable tools for fraudsters.

What future collaboration might look like

While banks play an important role, mule accounts are often created on social media, through the telecom industry, via email or even postal mail. Making APP fraud a cross-industry problem. This requires a next-level, cross-industry collaboration strategy, that sees solutions, techniques and intelligence being shared between banks and vendors, merchants, issuers and acquirers, and even with social media companies and telcos.

Ultimately, it’s about ensuring customers are better educated and protected and that banks perfect their monitoring of the money that comes in, as well as out, all while sharing that information. Building a true cross-industry framework will help deprive scammers of access to one of their main conditions for growth. As a result, we should begin to see the value of APP scam losses, as a proportion of the value of real-time transactions, drop.

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