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ACCELERATING THE DELIVERY OF APPLICATIONS WHILST REMAINING COMPLIANT

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Huw Price, Managing Director, Grid-Tools

Written by Huw Price, Managing Director, Grid-Tools

A recently published Fujitsu Financial Services Report (2013) highlighted that nearly one third (27%) of financial services organisations consider updating their legacy applications as their main priority over the next few years. However, achieving this whilst keeping software development budgets under control will be a challenge for many financial services organisations going forward.

Huw Price, Managing Director, Grid-Tools

Huw Price, Managing Director, Grid-Tools

Financial institutions also have the added pressure of ensuring that they are meeting compliance with an ever growing and tightening series of regulatory requirements and deadlines.  For example, current data protection legislation, such as HIPAA, PCI DSS, the EU Data Protection Directive and the UK Data Protection Act, impose vigilant practices around the use of data. As a result, banks cannot simply test using any data they want. They need to ensure that sensitive data is masked and that personally identifiable information (PII) is suitably protected – an exercise that can be quite labour intensive and cost-prohibitive.

As of 1st February 2014, banks in the EU, EFTA, San Marino and Monaco were required to have migrated their systems to be compliant with SEPA (the Single Euro Payments Act). The final deadline – following a six-month extension in January – for non-SEPA payments is now 1stAugust 2014. Designed to simplify bank transfers denominated in Euros, SEPA requires all financial institutions that deal within the EU (non-European banks have until October 2016) to ensure they have the standards, procedures and infrastructure in place to comply. In order to meet these deadlines, banks require the ability to test standard message formats, such as FEDWIRE, CHIPS, PAIN, ISO020022 and PACS. Failure to do so may prevent them from interacting with other EU banks.

As banks look to overhaul their systems, new applications will have to be tested and compliant before they go into live production.  With increased pressure on cost control and cost reduction, banks need to find more intelligent ways of finding and using test data.

More recently testing and development budgets have started to rise in line with an organisational and industry-wide focus on greater quality. This is often accompanied by an internal emphasis on cost-efficiency and delivering IT projects on time and in budget.   In order to respond to these requirements IT and development teams need to be able to provision ‘fit for purpose’ test data to the right place at the right time to accelerate and improve test cycles. At the same time they need mitigate the risk of delays, rework and spiralling costs, which slow the time to market of any new application development project.

One of the key ways to get new projects to market fast is to minimise the risk of production defects. The main challenges to successful project delivery are: communicating poor or ambiguous requirements, introducing quality too late in the development lifecycle, and delays caused by manually searching for or creating the right test data. More often than not testing issues and production defects are related to not having the right data in the testing environment in the first place. This is often down to the fact that the development team doesn’t specify clearly enough at the outset what the testers should be testing for. This can then involve rounds and rounds of iterations and circling backwards repeatedly adjusting specifications. When testing teams have received poor requirements they typically end up testing too much or testing with the wrong data. 56% of defects can be traced back to the requirements being undefined or poorly defined. When requirements are clearly defined from the outset, it reduces the number of bugs that make it into live production.

Test data management specialist, Grid-Tools has a visual flowchart tool, Agile Designer™, which helps organisations build quality into their software from the start by mapping requirements to clear, unambiguous visual flow charts.  Therefore, business analysts and project managers who are trying to accurately estimate the cost of a project now have a process to do this.  Once all of the requirements are mapped out in a clear and unambiguous fashion this creates a firm foundation from which to determine time, complexity and cost estimates. Agile Designer is part of Grid-Tools suite of test management solutions.

Today, IT departments need to focus on creating a more agile, automated and standardised testing environment; one that does not rely on manual intervention and where changes can be made more easily without causing huge delays. This demands an end-to-end test data management solution.  Implementing an end-to-end Test Data Management (TDM) solution offers financial institutions total control over their data throughout the development life-cycle from requirements and test case design to finding, making and provisioning the ‘right’ data for testing and QA. Adopting an end-to-end TDM solution improves the quality and accuracy of testing and supports agile development where errors are caught early and fixed more quickly, allowing financial institutions to reduce the number of defects found by 95%.  This also reduces the test cycles by more than 30% while reducing the testing time spent searching for data by 50%.

Banks looking to update their legacy applications will be faced with challenges around testing data, profiling, data masking and sub-setting as they try to move this data around in order to upgrade their systems.  Grid-Tools Datamaker™ tool facilitates compliance with data protection legislation, whilst significantly reducing infrastructure costs by extracting small, secure intelligence subsets from production.  Datamaker™ also allows financial institutions to import, manage, enhance and generate banking messages (SWIFT, FEDWIRE, CHIPS, ISO20022, PAIN and PACS). This is particularly useful to banks who have yet to meet SEPA guidelines. However, it is the ability to quickly design, find and make fit for purpose test data, or synthetically create data where none exists, that makes Datamaker™ really stand out from the crowd.

To find out more about Grid-Tools, its suite of test data management solutions and how it is helping financial institutions update and bring new applications to market quickly and cost effectively, why not download our latest whitepaper here.

 

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Everything you need to know about APIs for business

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Everything you need to know about APIs for business 1

By Omar Javaid, president, Vonage API Platform, Vonage 

If your work brings you into close proximity with technology, chances are that you’ve come across APIs. Like many of the tech acronyms we hear –  DNS, VOIP, SaaS – APIs fall into a category of terms that most of us would consider best left to the IT department. However, APIs are a vital tool for any tech-enabled business, and a basic understanding of them at management level can help to drive sales, increase customer satisfaction, and improve the user experience.

Although they seem daunting, getting to grips with APIs is surprisingly straightforward. API stands for Application Programming Interface, and can be simply defined as a software tool used to control programmes. Essentially, APIs create sets of rules that allow applications to communicate with each other – they are the part of the server that receives requests and sends responses. Today, when data is transferred between a pair (or more) of programs or applications, an API normally makes it happen.

To give a real-world example: when a user types Instagram’s URL into their browser and hits the Return key, a request is subsequently transmitted to Instagram’s remote servers. That browser then processes the response code it receives and displays the page. For the browser, Instagram’s server is an API – allowing it to communicate and relay information back to you without interruption or delay.

The job of the API is to simplify the complex data exchanged between these servers, and to make the interaction as seamless as possible for the end user. Considering that the vast majority of our business and personal lives now take place virtually, any solution that optimises the online experience is extremely valuable.

Using APIs to improve the customer experience 

One of the core benefits of APIs is that they enable businesses to free themselves from the time consuming and costly process of developing in-house software to power a single core application. Instead, developers can outsource certain tasks to remote “off-the-shelf” APIs, saving time, money, and allowing resources to be channeled elsewhere. These add-on services allow businesses to offer a more complete, one-stop solution to customers, whilst streamlining the process to optimise user experience.

Omar Javaid

Omar Javaid

Although we may not always realise it, APIs are playing a vital silent role in almost every purchase and interaction we have online. Take booking a holiday for example. As we browse comparison sights, APIs are working furiously behind the scene to aggregate information from airline databases, hotel websites, and excursion providers. The API performs the back and forth needed to retrieve the information, whilst we are able to sit back and view all of the results on the same page. Simplifying this process enables travel comparison websites to make the search for holidays quick and easy, and encourages customers to stay on the site by offering all that they need in one easy to consume package.

APIs also allow smaller businesses to utilise tools provided by some of the world’s largest and most successful companies. Google’s Calendar API for example could be used within a beauty salon website to enable customers to book and schedule treatment reminders, whilst Apple’s weather tool could be plugged-in to an events company website to give customers real-time weather updates. While the API’s developer does retain ultimate control over how the API is used, there are still countless ways to integrate these tools to benefit your business and improve the functionality of your website.

Communications APIs

The recent Covid-19 pandemic in particular has highlighted the value of an API class that normally receives little attention; communication APIs.

Today, companies are boosting spending on unified communications-as-a-service (UCaaS), along with video conferencing, collaboration, and voice technology solutions given the exponential growth in home and remote working as a result. Where face-to-face contact is limited by necessity, businesses need to be able to communicate with employees and customers in ways which are secure, simple, and cost-effective.

Given how rapidly the technology landscape changes, APIs are the clear solution to avoiding the expense of developing tools from scratch, in addition to harnessing the power of the advanced features offered by established API providers.

Using them, businesses are able to adapt to suit changing customer preferences; for example offering an online chatbot to handle customer queries, or by using multi-channel messaging to connect with customers via WhatsApp or Messenger. These tools are not only useful, but can also allow you to gain intelligence into a customer’s preferences and habits – both useful marketing gauges.

On the other hand, comms APIs can also help to address problems that may crop up internally within organisations and workforces. There are APIs which allow callers to automatically sync calendars, meaning that meetings will only be scheduled when all parties can attend. There are also APIs for timezone conversion, permissions requests, and for video link calls and messaging. With the work from home trend continuing for the foreseeable future, investing in these areas is critical if businesses want to keep delivering at the highest levels.

Considering all of the above, it’s clear that we can expect to see the adoption of APIs continue. Developers are constantly working to create increasingly sophisticated products, and many have moved towards exclusively building and hosting APIs, rather than building the apps themselves – creating a so called “API Economy” of sorts.

This focus on creating the best possible APIs has allowed smaller businesses to harness the collective expertise of the world’s largest and most successful companies, and the chance to use these tools represents a fantastic opportunity for growth. The reach of APIs extends far beyond the IT department, and with a basic understanding, they can be used by senior management and leadership teams to optimise all areas of the business – not bad for three small letters.

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Unexplained Wealth Orders: Rightly Celebrated or Over-Rated?

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Unexplained Wealth Orders: Rightly Celebrated or Over-Rated? 2

By Nicola Sharp of financial crime specialists Rahman Ravelli considers the attention given to unexplained wealth orders – and emphasises that they can be challenged.

There is little doubt that many sectors of the media – and their readers – enjoy a story that involves an unexplained wealth order (UWO). They do, after all, have many of the ingredients that many look for in a good tale: allegations of wrongdoing on a large scale, someone being made to hand over assets worth more than most people will earn in a lifetime and the sense that justice has been seen to be done.

In the latest UWO, which was widely covered in the media last week, Leeds businessman Mansoor Mahmood Hussain was compelled to hand over property worth just short of £10M, after being accused of acting as a money launderer. He has been ordered to surrender the assets because the National Crime Agency (NCA) believed his wealth was the proceeds of crime, and so considered him a suitable target for a UWO.

Introduced by the Criminal Finances Act 2017, UWOs give law enforcement agencies powers to require persons to explain how they came to possess their assets, and to show that their wealth has come from legitimate sources. A UWO can be sought without any civil or criminal proceedings having begun. There is no need for the subject of a UWO to have been convicted of an offence or to have had a civil law judgement against them. Agencies can apply to the High Court for a UWO against any property valued at over £50,000, if the person owning it is reasonably suspected of being involved in serious crime (or connected to a person who is) and there are reasonable grounds to suspect that a person’s lawfully-obtained income would be insufficient to allow that person to obtain that property.

Like Zamira Hajiyeva before him, Mansoor Hussain’s inability to provide a credible, innocent explanation for his wealth has cost him – and generated headlines. Hajiyeva may be best known for somehow racking up £16M of expenditure at Harrods. But this only became known when she was the first person to be the subject of UWOs. The NCA expected her to explain how she had bought a £11.5M Knightsbridge house and a £10.5M golf course in Ascot, bearing in mind her husband is the former head of the state-owned International Bank of Azerbaijan, had a salary of no more than $70,000 and was convicted of fraud and embezzlement. Earlier this year, she lost her appeal against the UWOs, thus enabling the media to re-run her story and giving the NCA the chance to make approving noises about UWOs being a valuable tool in tackling illicit finance.

But before there is a rush to applaud UWOs, it should be said that the NCA’s relationship with them has been a chequered one, to say the least. Since becoming available to the NCA, the agency’s success rate with UWOs has been patchy. This is despite the standard of proof for UWOs being significantly lower than that required in criminal cases. Last year saw the NCA granted three UWOs for London property valued at £80M. Yet less than a year later, these UWOs were discharged, with a judge criticising the NCA’s “unreliable’’ assumptions and “artificial and flawed’’ reasoning. The Court of Appeal then refused the agency permission to appeal this decision.

While a UWO is a tool that enables law enforcement agencies to seize assets they believe are the proceeds of crime without anyone ever being convicted, it does not yet appear to have become the great weapon against illicit wealth that many would have hoped. Of the four cases begun since UWOs were introduced, two are still being contested. Mansoor Hussain’s case is the first time a UWO has successfully led to the recovery of assets from an individual.

Although, a UWO can be seen as effective in certain situations, it will often be considered the most (and perhaps only) viable option when a prosecution has failed or when the authorities do not believe there is enough evidence for a realistic chance of a conviction.

When being faced with an UWO it should be remembered that whilst agreeing to settle and hand over property is not an admission of guilt, anyone facing a UWO must consider carefully how they respond to the authorities. It is vitally important to take the right advice. Deciding how to proceed when assets worth millions are at stake can be the biggest decision a person ever has to make.

In such circumstances it will often be the case that an intelligent, robustly-argued challenge to a UWO – and, in particular, to the allegations being made by the law enforcement agency seeking the UWO – will bring success. But that success will depend on knowing precisely how to respond – and who to turn to – if and when you become the intended target of a UWO.

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How Siloed Data Leaves Financial Institutions Open to Fraud

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How Siloed Data Leaves Financial Institutions Open to Fraud 3

By Stephany Lapierre, CEO Tealbook

Reducing the risk of fraud is a top priority for all financial institutions since fraud is responsible for massive profit loss, as well as the degradation of an institution’s integrity and brand.

In trying to prevent fraud, most executives look to protect themselves from the outside in, implementing layers of security and launching reactive measures. However, in order to truly protect your organization from fraud, it’s imperative to begin by looking at your existing internal structures. The most critical and often overlooked area to assess is how your organization obtains, enriches, and distributes data.

Streamlining and scrubbing your data can increase profitability without adding to resource spend. Having good data allows you to complete your due diligence on vendors and external entities your organization regularly deals with. It favorably adjusts your efficiency ratio and reduces risk by eliminating redundancies, conflicting information, and information gaps. In addition, it allows smaller teams to operate with increased scale and effectiveness. In turn, this leads to a more effective vendor vetting process and less room for error in payment information verification.

Conversely, poorly managed data is confusing and deceiving and can play an unfortunate role in giving fraudulent access to outside parties through internal miscommunications. For example, updates could be made in one system and not another, and suddenly different departments are working with different data sets like payment information or legal formation documents that regulators look for in audits, and no one knows what is true or accurate. This effect snowballs over time, creating massive holes in the integrity of the data, creating unnecessary risk exposure and audit failures.

All of these vulnerabilities can serve as the foundation for developing a risk management protocol that may be rendered useless if it is based on poor data. It is  impossible to properly vet vendors and suppliers or verify payment information if the data is unreliable.

By investing in a solid Data Foundation, you’ll see an increase in the success of your risk management and fraud prevention measures. In many instances, you won’t need to add more steps or resources, just power your existing systems with clean, agile, and accurate data to see improved efficiency.

Here’s a closer look at the most common vulnerabilities within a typical financial institution’s data ecosystem:

Fragmented Organization Structure

As organizations grow and scale, it’s inevitable that different subsections will become isolated from one another and begin different processes for data management. Poorly managed systems can exacerbate this lack of communication and threaten data integrity.

It may not seem like cause for concern if a few different arms of an organization aren’t completely in sync. However, in the financial space, this issue rarely applies to just one or two organizational divides. For example, a prominent US-based financial institution boasts over 90 business units, all of which need to be synergized in order to prevent inaccurate data, redundancies, and problems with regulatory information gathering. This siloed information is, unfortunately, a common practice that needs to be addressed.

Unmanaged Proprietary Systems

In an attempt to serve data in a highly specialized way, many institutions have explored developing proprietary data systems for internal use. However, because of factors like employee turnover or an inability to keep up with data integrity best practices, these legacy systems quickly become obsolete and unmanaged. Their custom nature also renders them inflexible and unable to integrate with other solutions.

When trying to work around an unmanaged system, different branches of an institution may turn to different solutions. When work is being done across different platforms, this reduces visibility and increases risk for inaccuracies, which leads to poor decisions, costly rework, and potentially fraud.

If your organization is reliant on a proprietary system, consider if that system is functional and scalable. If it’s not, you may want to look into a flexible data management system that can work with other technologies.

 Disparate Information Across Systems

Mergers, acquisitions, and growth also lead to using and implementing many different ERP solutions and antiquated legacy software that are forced to communicate with each other using painful manual efforts. A major problem arises from the fact that these systems operate across numerous lines of businesses, all with different siloed data. By having so many siloed systems that could be compromised with harmful data, these disparate data sources leave banks and other financial institutions exposed to unnecessary risk.

Different departments have different needs, so it makes sense that they would use different solutions, but it’s important that those solutions pull from a single source of truth in order to prevent the types of data inaccuracies that lead to vulnerabilities.

Final Thoughts

Closing the holes in your data integrity is the most proactive way a financial institution can defend against fraud. As hackers get increasingly creative and aggressive, it becomes even more critical that organizations have a trusted Data Foundation to base their decisions on. This can be achieved by ensuring that siloed systems are powered by consistent and accurate data from a single reliable source.

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