Annabel Sim, Director at Compleat Software, the P2P Software Creator
As we’ve noticed over the past couple of years, change doesn’t always mean for the better. But it is inevitable, and those that stand still risk being left behind.
The global pandemic has pushed the UK economy to the edge, reiterating the importance of many of the practices that underpin the finance function. And while agile, innovative businesses have adapted to this change and adopted new technologies, traditional companies are yet to set the wheels in motion.
It’s almost 2022 and many companies are still using spreadsheets, while others are putting unnecessary pressure on accounts payable staff by not providing the right tools to get the job done.
Indeed, many of the spend and procurement practices we’ve taken for granted for so long are now completely unsustainable. The acceleration of digital automation has taken their place, bringing with it a whole host of changes to the way finance teams operate.
As we enter 2022, there are four key areas businesses can expect to have a significant impact on the way they operate:
- Remote working and spend management
This initial shift towards remote work left businesses doing away with on-premise technology such as desktop PCs and servers, and scrambling for cloud and SaaS technology that could allow teams to efficiently operate.
And while apps such as Zoom and Slack have made collaboration that little bit easier for remote teams, it certainly hasn’t helped in areas such as spend management and invoice processing.
Financial processes are typically some of the last to be updated – which is fine when it’s working, but what happens when staff need to book a flight or pay for their software subscription? With employees no longer always around in the flesh, do businesses still have insight into what, where, and when employees are making purchases?
Employees need the freedom to spend where and when they like, which is why automation in the purchase-to-pay cycle will continue to be a popular trend in the new year.
Able to provide better visibility and control over company spending and expenses, automated systems take the hassle out of managing decentralised teams. Just because purchases are made out of sight, doesn’t mean they should be out of mind.
- B2C purchasing is coming to B2B
As we’ve just mentioned, employees want to spend like they do in their personal lives. E-commerce has quickly become the go-to channel for consumers, and this is also becoming true for B2B spend.
Staff want to be able to spend at the stores they know and trust, because why pay for a laptop from a historic provider when another offers a better price or faster delivery?
Businesses also can’t afford situations where their employees are waiting for approval on a new laptop they’ve ordered, especially if working remotely. This also means ditching the company credit cards and providing staff with payment systems that work around them, not the other way around.
Deploying a purchase to pay portal means staff can shop at the stores they want, when they need to. It also does away with the dreaded end-of-month receipt gathering, replacing it with an instant payment system that updates in real-time – important for financial reporting and cash flow management.
- Fraud will continue to evolve
Something as simple as an email has seen businesses losing hundreds of thousands of pounds – a trend that has only worsened while staff continue to work from home. But as employees are reluctant to return to the office any time soon, businesses need to find another solution.
Automation in the purchase to pay process is helping not just streamline time spent managing and approving purchases, it’s also reducing the amount of fraudulent activity in the finance function.
Instead of manually having to sift through filing cabinets for paper documents or the 50,000th line on a spreadsheet, the digitising of invoices mixed with automation provides visibility on if invoices have come from the correct supplier as well as making sure all of the important information is correct.
So not only are companies better protected against fraud internally and externally, staff can breathe a sigh of relief knowing that they can rely on a system that matches all of the right information almost instantly.
- Cash flow will remain a top priority
Furloughing schemes have ended in the UK at a time of continued financial insecurity, while 60% of small businesses said cash flow had been a problem for them in 2021. Which raises the question – how much insight do businesses have into their cash flow issues?
To safeguard cash flow in 2022, businesses need to focus on advancing operational efficiencies in the finance function. Businesses can’t afford to have surprises sprung on them, and prioritising factors such as live reporting, digital invoicing, and automation can help bring finance up to speed with real-time spend.
Being able to gain visibility into company spend at the time of purchasing is a vital part of efficiently managing finances – almost impossible to do when staff are working remotely and if businesses rely on end-of-month expense reports.
Plus, by gaining real-time insight into day-to-day spend, businesses no longer have to have large amounts of cash reserves. Analysis into historical spending in areas such as technology, software, or office supplies can also provide a cyclical view of purchases, with the potential for money to be saved through subscription services rather than upfront costs.
What to expect in 2022
For businesses looking to stay on top of whatever change comes their way, upgrading the finance department’s current tech stack has to be a priority near the top of the wish list.
Automation is at the top of most finance leader’s wish lists for good reason. Rather than see robots replace staff, the technology is replacing the old school, tedious processes that need to be made a thing of the past for staff.
And while we all feel like we’ve lost visibility of our remote staff, it doesn’t mean we should lose grip over our finances. Cash flow and spend management will continue to be vital areas of focus, and teams need to be armed with the right tools to provide real-time visibility and control.
2022 is set to be a big year, but businesses still need to make sure they’re one step ahead of the game.
The Evolution and Challenges of Crypto Regulation
Cryptocurrency regulations are evolving quickly around the globe with authorities responding to developing risks professed by criminals exploiting the latest payment methods to mask and launder the profits from their crimes.
According to William Je Founder & CEO, Hamilton Investment Management Ltd, this has warranted the introduction of a more stringent level of due diligence by additional bodies to introduce preventative measures.
William Je Founder & CEO, Hamilton Investment Management Ltd explains: “The past ten years has seen several structural changes in Know Your Customer (KYC) and anti-money laundering (AML) regulations in both Europe and across the world. High-profile money laundering cases and the penetration of illegal monies into global markets have caught the attention of regulators.
“As regulators improve their understanding of these criminal practices, AML requirements have also been improved. However, these improvements have been a reactive process.”
To address the challenges of the blockchain ecosystem, the European Union has started to introduce financial regulations that further bolster the regulatory system in order to improve licensing models. Many member states are regulating crypto assets individually, and Germany is leading the way in being the first to regulate.
Je continues: “These national driven regulations clearly point to a future pathway for crypto companies, outlining the requirements for obtaining and maintaining a financial license from the regulator.
“Compliance, however, is to my mind essential as it not only boosts investor confidence but adds a necessary layer of protection to investors.”
As crypto evolves, so have regulatory bodies’ efforts to monitor, address and enforce restrictions. The most prominent is the Financial Action Task Force (FATF), which details guidance and determines best practices in anti-money-laundering practices and combating the financing of terrorism.
FATF Recommendations number 16, better known as the ‘travel rule’, which requires businesses to collect and store the personal data of the originators and the beneficiaries in blockchain transactions, is the most notable.
Je concludes: “What does this mean? In theory, access to this data will enable authorities to have better oversight and enforcement of crypto market regulations. In other words, they’ll know exactly who is doing exactly what.
As we have always argued – transparency is key. We need to regulate crypto as an asset class with efficacy, which necessitates legislation that is applicable specifically to digital assets and does not hinder the market.
The criminal financial trade which arguably encompasses money laundering, illegal weapons sales, human trafficking, is also international. Thus, cracking down on it is, out of necessity, an international effort.
The decentralised nature of blockchain, which runs contrary to the central-server standard we know and use nearly everywhere, presents a formidable challenge here. Rules and regulations for traditional financial institutions are being implemented wholescale into the crypto sector. We believe that this is arguably wrong footed as it ignores the innovation and uniqueness this asset class and its underlying technology entails.
Traditional forms of regulation from the fiat world do not reciprocally apply to every aspect of crypto nor to the fundamental nature of blockchain technology. However well-intentioned they may be, because these imposed regulations are built on an old system, they must be adapted and modified.”
How bug bounty programs can help financial institutions be more secure
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.
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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