Connect with us

Top Stories

ACHIEVING BUSINESS VELOCITY THROUGH DIGITAL TRANSFORMATION

Published

on

ACHIEVING BUSINESS VELOCITY THROUGH DIGITAL TRANSFORMATION

We are living in pivotal times. Compute power has reached unprecedented levels and is affecting how we do business at every level. Those who embrace those technological advances accelerate their business velocity by orders of magnitude and develop an unfair advantage versus their competition. Technology is driving business velocity, and is increasingly determining winners and losers. Mansour Karam is CEO and Founder of Apstra explains

Digital Transformation

The fundamental changes businesses undergo to take advantage of the unprecedented power of technology is commonly referred to as digital transformation. It is driven by the ability to generate and analyze data like never before. It is generated by an estimated 80B IoT devices (in 2025): mobile phones, self-driving cars, HVAC systems, elevators, security systems, etc. This data is processed in data centers everywhere to extract insights and drive decisions – through analytics, machine learning, and AI.

Every new device connected to the network communicates with hundreds if not thousands of other devices. Furthermore, the process of analyzing the original data from an IoT device generates orders of magnitude of more data. Every new device connected to the grid increases total traffic in the network by a disproportionate amount. As a result, overall traffic is growing at an unprecedented rate.

For this reason, the network infrastructure has become either a critical foundation of an organization’s digital transformation efforts, or it’s Achilles heel. Deploying and operating network infrastructures that are unprepared to handle the requirements of your digital transformation is like playing Russian roulette with a massive data center outage. Network infrastructure builds and operations can become a major bottleneck to business velocity.

Today’s Status Quo

Consider this: Networks today are operated in essentially the same way as they were in 1995. That is 22 years ago — the year Intel Pentium Pro was released. Today, 85% of networking teams still use the same arcane commands to configure every device in the network in what amounts to an overwhelmingly manual process. They troubleshoot networks by logging into every device and running those same commands manually to obtain the status of those devices, and they become experts at interpreting arcane vendor-specific code from those devices. To monitor if their network infrastructures are running well, they continuously sift through mountains of telemetry or stare at visualizations 24/7 to detect unusual patterns. As a result, organizations spend $3-$5 on average for every $1 of CapEx. If you’re a traditional enterprise with legacy systems, you are likely spending a lot more — in some cases, an order of magnitude more.

On average, 80% of those resources are spent on manual operations — I would say wasted rather than spent, because anything you could automate, but that you haven’t automated, is effectively wasted.

This means that on average, 80% of approximately $4 is wasted. That is $3.20 for every dollar of CapEx. And some organizations waste a lot more.

It doesn’t end there — in fact it gets a lot worse. Until this point, this analysis has only focused on CapEx, and did not consider your top line. Here are a few examples:

  • The cost to your reputation from having an outage; for a company in the S&P 500, this can amount to tens if not 100s of millions of dollars per outage instance
  • The revenue you are likely to lose from having an outage; on average $1M per minute or outage — and in some cases a lot more
  • The amount of deferred revenue from taking your organization many months to stand up and provision a network required to deploy a new business service or implement a new initiative;
  • The amount of deferred revenue from taking weeks to make a change to the network that is required to support a new business service
  • The lack of competitiveness from your organization’s inability to provision the infrastructure necessary for critical business initiatives
  • The opportunity cost associated with the inability for the staff to improve their skills in a manner that’s beneficial to the business.

These costs are harder to measure generally, as they are specific to every business. However, they are massive, and are significantly higher than OpEx Costs.

The Need for Log-Scale Improvements

In a 2017 report, Gartner emphatically points out that “Digital business initiatives will struggle unless CIOs and business leaders change the way they think about networking.” Gartner states that “by 2022, the percentage of enterprises that deem networking core to their digital initiative success will increase to over 75%”, up from 25% today. In fact, Gartner believes that enterprises should consider networking to be a profit center rather than a cost center. In fact for the first time since the early 2000’s, Gartner urges CIOs to make “Networking a critical strategic infrastructure resource for enabling digital business.”

Clearly, complexities, inefficiencies and high costs plague data center network operations today and prevent organizations from delivering on their digital transformation goals. Digital transformation requires successfully eliminating these complexities to achieve log-scale improvements in network infrastructure CapEx, OpEx, and capacity.

The Simple, Scalable, Hardware-Independent Green Patch

In fact, in my experience, customers no longer “upgrade” old environments, referred to as “brownfield”. That would be akin to upgrading components or adding a new engine to a 10-year old car that doesn’t meet any of the performance, emissions, or safety standards that are readily available when one purchases a new car. And customers rarely deploy pure greenfield environments. Their upgrade processes are constrained by the need to support legacy technologies in support of their business that keep the lights on, and prevents them from performing forklift upgrades of their entire environment. And even if they were able to do so, such an approach can carry unreasonable cost and risks of disrupting the business if the upgrade doesn’t go smoothly.

Instead, what I’ve seen customers do far more often is deploy what we like to call “green patches”. That is, they upgrade their infrastructure one incremental step at a time. This incremental new step could be a new rack or, often a new POD. This new green patch is based on the latest thinking in terms of architecture, and incorporates the guiding principles needed to meet the ever evolving requirements of the business.

This is more true today than ever before. Because of the urgent need to embrace the digital transformation of their business, enterprises are embarking on an accelerated schedule to upgrade their infrastructure. CIOs should leverage their new green patches to set the foundation for log scale improvements in how compute and network infrastructures are built and operated. This includes the reduction of capital and operational costs while increasing capacity and reducing risk in their platforms. These guiding principles are as follows:

  • Simplify operations – declare war against the complexities and inefficiencies that plague data center network operations
  • Decouple yourself from your choice of hardware. The network has traditionally been driven by hardware vendors, and often complexities and inefficiencies are tied to your choice of hardware vendor. The future is driven by software – as famously quoted

“software will eat the world”. It is true for the business, it is also true for the network infrastructure.

  • Adopt approaches that scale to meet the needs of your business. This is accomplished through proper scale-out architectures, and through operational models that enable the ability to grow infrastructure or replace devices with newer technology of larger capacity seamlessly.

Don’t fall behind from your inability to build the infrastructure that’s required for your business. Upgrade your infrastructure using a green patch approach instead. Adopt the principles of simplicity, hardware/software decoupling, and scale. Embrace new technologies such as intent-based networking and intent-based analytics – technologies that enable software driven, self-operating, autonomous networking infrastructures. In the process, set yourself on the right path for log scale efficiency improvements required by your digital transformation initiative. Business velocity will separate winners and losers – it is a pivotal moment, the time is now!

Mansour Karam is CEO and Founder of Apstra, which simplifies data center network infrastructure and increases business velocity enabling CIOs to deliver on their Digital Transformation and IoT goals. Mansour founded Apstra in 2014 and launched in 2016 and led the delivery of the first vendor-agnostic, intent-based, closed-loop “command and control” system that delivers log-scale improvements in CapEx, OpEx and capacity. Mansour co-founded Apstra with David Cheriton (Arista founder and the first investor in Google and VMware, and Sasha Ratkovic, an abstractions expert and distinguished engineer at Juniper).

Top Stories

Taking control of compliance: how FS institutions can keep up with the ever-changing regulatory landscape

Published

on

Taking control of compliance: how FS institutions can keep up with the ever-changing regulatory landscape 1

By Charles Southwood, Regional VP – Northern Europe and MEA at Denodo

The wide-spread digital transformation that has swept the financial services (FS) sector in recent years has brought with it a world of possibilities. As traditional financial institutions compete with a fresh wave of challenger banks and fintech startups, innovation is increasing at an unprecedented pace.

Emerging technologies – alongside the ever-evolving concept of online banking – have provided a platform in which the majority of customer interactions now take place in a digital format. The result of this is a never-ending stream of data and digital information. If used correctly, this data can help drive customer experience initiatives and shape wider business strategies, giving organisations a competitive edge.

However, before FS organisations can utilise data-driven insights, they need to ensure that they can adequately protect and secure that data, whilst also complying with mandatory regulatory requirements and governance laws.

The regulation minefield

Regulatory compliance in the FS sector is a complex field to navigate. Whether its potential financial fraud or money laundering, risk comes in many different forms. Due to their very nature – and the type of data that they hold – FS businesses are usually placed under the heaviest of scrutiny when it comes to achieving compliance and data governance, arguably held to a higher standard than those operating in any other industry.

In fact, research undertaken last month discovered that the General Data Protection Regulation (GDPR) has had a greater impact on FS organisations than any other sector. Every respondent working in finance reported that the changes made to their organisation’s cyber security strategies in the last three years were, at least to some extent, as a result of the regulation.

To make matters even more confusing, the goalpost for 100% compliance is continually moving. In fact, between 2008 and 2016, there was a 500% increase in regulatory changes in developed markets. So even when organisations think they are on the right track, they cannot afford to become complacent. The Markets in Financial Instruments Directive (MiFID II), the requirements for central clearing and the second Payment Service Directive (PSD2), are just some examples of the regulations that have forced significant changes on the banking environment in recent years.

Keeping a handle on this legal minefield is only made more challenging by the fact that many FS organisations are juggling an unimaginable amount of data. This data is often complex and of poor quality. Structured, semi-structured and unstructured, it is stored in many different places – whether that’s in data lakes, on premise or in multi-cloud environments. FS organisations can find it extremely difficult just to find out exactly what information they are storing, let alone ensure that they are meeting the many requirements laid out by industry regulations.

A secret weapon

Modern technologies, such as data virtualisation, can help FS organisations to get a handle on their data – regardless of where it is stored or what format it is in. Through a single logical view of all data across an organisation, it boosts visibility and real-time availability of data. This means that governance, security and compliance can be centralised, vastly improving control and removing the need for repeatedly moving and copying the data around the enterprise. This can have an immediate impact in terms of enabling FS organisations to avoid data proliferation and ‘shadow’ IT.

In addition to this, when a new regulation is put in place, data virtualisation provides a way to easily find and access that data, so FS organisations can respond – without having to worry about alternative versions of that data – and ensures that they remain compliant from the offset. This level of control can be reflected even down to the finest details. For example, it is possible to set up access to governance rules through which operators can easily select who has access to what information across the organisation. They can alter settings for sharing, removing silos, masking and filtering through defined, role-based data access. In terms of governance, this feature is essential, ensuring that only those who have the correct permissions to access sensitive information are able to do so.

Compliance is a requirement that will be there forever. In fact, its role is only likely to increase as law catches up with technological advancement and the regulatory landscape continues to change. For FS organisations, failure to meet the latest legal requirements could be devastating. The monetary fines – although substantial – come second to the potential reputation damage associated with non-compliance. It could be the difference between an organisation surviving and failing in today’s climate.

No one knows what is around the corner. Whilst some companies may think they are ahead of the compliance game today, that could all change with the introduction of a new regulation tomorrow. The best way to ensure future compliance is to get a handle on your data. By providing total visibility, data virtualisation is helping organisations to gain back control and win the war for compliance.

Continue Reading

Top Stories

TCI: A time of critical importance

Published

on

TCI: A time of critical importance 2

By Fabrice Desnos, head of Northern Europe Region, Euler Hermes, the world’s leading trade credit insurer, outlines the importance of less publicised measures for the journey ahead.

After months of lockdown, Europe is shifting towards rebuilding economies and resuming trade. Amongst the multibillion-euro stimulus packages provided by governments to businesses to help them resume their engines of growth, the cooperation between the state and private sector trade credit insurance underwriters has perhaps missed the headlines. However, this cooperation will be vital when navigating the uncertain road ahead.

Covid-19 has created a global economic crisis of unprecedented scale and speed. Consequently, we’re experiencing unprecedented levels of support from national governments. Far-reaching fiscal intervention, job retention and business interruption loan schemes are providing a lifeline for businesses that have suffered reductions in turnovers to support national lockdowns.

However, it’s becoming clear the worst is still to come. The unintended consequence of government support measures is delaying the inevitable fallout in trade and commerce. Euler Hermes is already seeing increase in claims for late payments and expects this trend to accelerate as government support measures are progressively removed.

The Covid-19 crisis will have long lasting and sometimes irreversible effects on a number of sectors. It has accelerated transformations that were already underway and had radically changed the landscape for a number of businesses. This means we are seeing a growing number of “zombie” companies, currently under life support, but whose business models are no longer adapted for the post-crisis world. All factors which add up to what is best described as a corporate insolvency “time bomb”.

The effects of the crisis are already visible. In the second quarter of 2020, 147 large companies (those with a turnover above €50 million) failed; up from 77 in the first quarter, and compared to 163 for the whole of the first half of 2019. Retail, services, energy and automotive were the most impacted sectors this year, with the hotspots in retail and services in Western Europe and North America, energy in North America, and automotive in Western Europe

We expect this trend to accelerate and predict a +35% rise in corporate insolvencies globally by the end of 2021. European economies will be among the hardest hit. For example, Spain (+41%) and Italy (+27%) will see the most significant increases – alongside the UK (+43%), which will also feel the impact of Brexit – compared to France (+25%) or Germany (+12%).

Companies are restarting trade, often providing open credit to their clients. However, there can be no credit if there is no confidence. It is increasingly difficult for companies to identify which of their clients will emerge from the crisis from those that won’t, and whether or when they will be paid. In the immediate post-lockdown period, without visibility and confidence, the risk was that inter-company credit could evaporate, placing an additional liquidity strain on the companies that depend on it. This, in turn, would significantly put at risk the speed and extent of the economic recovery.

In recent months, Euler Hermes has co-operated with government agencies, trade associations and private sector trade credit insurance underwriters to create state support for intercompany trade, notably in France, Germany, Belgium, Denmark, the Netherlands and the UK. All with the same goal: to allow companies to trade with each other in confidence.

By providing additional reinsurance capacity to the trade credit insurers, governments help them continue to provide cover to their clients at pre-crisis levels.

The beneficiaries are the thousands of businesses – clients of credit insurers and their buyers – that depend upon intercompany trade as a source of financing. Over 70% of Euler Hermes policyholders are SMEs, which are the lifeblood of our economies and major providers of jobs. These agreements are not without costs or constraints for the insurers, but the industry has chosen to place the interests of its clients and of the economy ahead of other considerations, mindful of the important role credit insurance and inter-company trade will play in the recovery.

Taking the UK as an example, trade credit insurers provide cover for more than £171billion of intercompany transactions, covering 13,000 suppliers and 650,000 buyers. The government has put in place a temporary scheme of £10billion to enable trade credit insurers, including Euler Hermes, to continue supporting businesses at risk due to the impact of coronavirus. This landmark agreement represents an important alliance between the public and private sectors to support trade and prevent the domino effect that payment defaults can create within critical supply chains.

But, as with all of the other government support measures, these schemes will not exist in the long term. It is already time for credit insurers and their clients to plan ahead, and prepare for a new normal in which the level and cost of credit risk will be heightened and where identifying the right counterparts, diversifying and insuring credit risk will be of paramount importance for businesses.

Trade credit insurance plays an understated role in the economy but is critical to its health. In normal circumstances, it tends to go unnoticed because it is doing its job. Government support schemes helped maintain confidence between companies and their customers in the immediate aftermath of the crisis.

However, as government support measures are progressively removed, this crisis will have a lasting impact. Accelerating transformations, leading to an increasing number of company restructurings and, in all likelihood, increasing the level of credit risk. To succeed in the post-crisis environment, bbusinesses have to move fast from resilience to adaptation. They have to adopt bold measures to protect their businesses against future crises (or another wave of this pandemic), minimize risk, and drive future growth. By maintaining trust to trade, with or without government support, credit insurance will have an increasing role to play in this.

Continue Reading

Top Stories

What Does the FinCEN File Leak Tell Us?

Published

on

What Does the FinCEN File Leak Tell Us? 3

By Ted Sausen, Subject Matter Expert, NICE Actimize

On September 20, 2020, just four days after the Financial Crimes Enforcement Network (FinCEN) issued a much-anticipated Advance Notice of Proposed Rulemaking, the financial industry was shaken and their stock prices saw significant declines when the markets opened on Monday. So what caused this? Buzzfeed News in cooperation with the International Consortium of Investigative Journalists (ICIJ) released what is now being tagged the FinCEN files. These files and summarized reports describe over 200,000 transactions with a total over $2 trillion USD that has been reported to FinCEN as being suspicious in nature from the time periods 1999 to 2017. Buzzfeed obtained over 2,100 Suspicious Activity Reports (SARs) and over 2,600 confidential documents financial institutions had filed with FinCEN over that span of time.

Similar such leaks have occurred previously, such as the Panama Papers in 2016 where over 11 million documents containing personal financial information on over 200,000 entities that belonged to a Panamanian law firm. This was followed up a year and a half later by the Paradise Papers in 2017. This leak contained even more documents and contained the names of more than 120,000 persons and entities. There are three factors that make the FinCEN Files leak significantly different than those mentioned. First, they are highly confidential documents leaked from a government agency. Secondly, they weren’t leaked from a single source. The leaked documents came from nearly 90 financial institutions facilitating financial transactions in more than 150 countries. Lastly, some high-profile names were released in this leak; however, the focus of this leak centered more around the transactions themselves and the financial institutions involved, not necessarily the names of individuals involved.

FinCEN Files and the Impact

What does this mean for the financial institutions? As mentioned above, many experienced a negative impact to their stocks. The next biggest impact is their reputation. Leaders of the highlighted institutions do not enjoy having potential shortcomings in their operations be exposed, nor do customers of those institutions appreciate seeing the institution managing their funds being published adversely in the media.

Where did the financial institutions go wrong? Based on the information, it is actually hard to say where they went wrong, or even ‘if’ they went wrong. Financial institutions are obligated to monitor transactional activity, both inbound and outbound, for suspicious or unusual behavior, especially those that could appear to be illicit activities related to money laundering. If such behavior is identified, the financial institution is required to complete a Suspicious Activity Report, or a SAR, and file it with FinCEN. The SAR contains all relevant information such as the parties involved, transaction(s), account(s), and details describing why the activity is deemed to be suspicious. In some cases, financial institutions will file a SAR if there is no direct suspicion; however, there also was not a logical explanation found either.

So what deems certain activities to be suspicious and how do financial institutions detect them? Most financial institutions have sophisticated solutions in place that monitor transactions over a period of time, and determine typical behavioral patterns for that client, and that client compared to their peers. If any activity falls disproportionately beyond those norms, the financial institution is notified, and an investigation is conducted. Because of the nature of this detection, incorporating multiple transactions, and comparing it to historical “norms”, it is very difficult to stop a transaction related to money laundering real-time. It is not uncommon for a transaction or series of transactions to occur and later be identified as suspicious, and a SAR is filed after the transaction has been completed.

FinCEN Files: Who’s at Fault?

Going back to my original question, was there any wrong doing? In this case, they were doing exactly what they were required to do. When suspicion was identified, SARs were filed. There are two things that are important to note. Suspicion does not equate to guilt, and individual financial institutions have a very limited view as to the overall flow of funds. They have visibility of where funds are coming from, or where they are going to; however, they don’t have an overall picture of the original source, or the final destination. The area where financial institutions may have fault is if multiple suspicions or probable guilt is found, but they fail to take appropriate action. According to Buzzfeed News, instances of transactions to or from sanctioned parties occurred, and known suspicious activity was allowed to continue after it was discovered.

Moving Forward

How do we do better? First and foremost, FinCEN needs to identify the source of the leak and fix it immediately. This is very sensitive data. Even within a financial institution, this information is only exposed to individuals with a high-level clearance on a need-to-know basis. This leak may result in relationship strains with some of the banks’ customers. Some people already have a fear of being watched or tracked, and releasing publicly that all these reports are being filed from financial institutions to the federal government won’t make that any better – especially if their financial institution was highlighted as one of those filing the most reports. Next, there has been more discussion around real-time AML. Many experts are still working on defining what that truly means, especially when some activities deal with multiple transactions over a period of time; however, there is definitely a place for certain money laundering transactions to be held in real time.

Lastly, the ability to share information between financial institutions more easily will go a long way in fighting financial crime overall. For those of you who are AML professionals, you may be thinking we already have such a mechanism in place with 314b. However, the feedback I have received is that it does not do an adequate job. It’s voluntary and getting responses to requests can be a challenge. Financial institutions need a consortium to effectively communicate with each other, while being able to exchange critical data needed for financial institutions to see the complete picture of financial transactions and all associated activities. That, combined with some type of feedback loop from law enforcement indicating which SARs are “useful” versus which are either “inadequate” or “unnecessary” will allow institutions to focus on those where criminal activity is really occurring.

We will continue to post updates as we learn more.

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2020
2020 Global Banking & Finance Awards now open. Click Here

Latest Articles

Mastercard Delivers Greater Transparency in Digital Banking Applications 4 Mastercard Delivers Greater Transparency in Digital Banking Applications 5
Banking5 hours ago

Mastercard Delivers Greater Transparency in Digital Banking Applications

Mastercard collaborates with merchants and financial institutions to include logos in digital banking applications Research shows that ~25% of disputes...

Success beyond voice: Contact centres supporting retail shift online 7 Success beyond voice: Contact centres supporting retail shift online 8
Business6 hours ago

Success beyond voice: Contact centres supporting retail shift online

As the nation continues to overcome the challenges presented by COVID-19, customers have shifted their channel preferences, and contact centres have demonstrated...

7 Ways to Grow a Profitable Hospitality Business 9 7 Ways to Grow a Profitable Hospitality Business 10
Business6 hours ago

7 Ways to Grow a Profitable Hospitality Business

Hospitality requires charisma and innovation The hospitality industry is a multibillion-dollar industry with lots of career opportunities in hotels, theme...

AML and the FINCEN files: Do banks have the tools to do enough? 16 AML and the FINCEN files: Do banks have the tools to do enough? 17
Banking7 hours ago

AML and the FINCEN files: Do banks have the tools to do enough?

By Gudmundur Kristjansson, CEO of Lucinity and former compliance technology officer Says AML systems are outdated and compliance teams need better...

Finding and following your website’s ‘North Star Metric’ 18 Finding and following your website’s ‘North Star Metric’ 19
Business7 hours ago

Finding and following your website’s ‘North Star Metric’

By Andy Woods, Design Director of Rouge Media The ‘North Star Metric’ (NSM) is one of many seemingly confusing terms...

Taking control of compliance: how FS institutions can keep up with the ever-changing regulatory landscape 20 Taking control of compliance: how FS institutions can keep up with the ever-changing regulatory landscape 21
Top Stories7 hours ago

Taking control of compliance: how FS institutions can keep up with the ever-changing regulatory landscape

By Charles Southwood, Regional VP – Northern Europe and MEA at Denodo The wide-spread digital transformation that has swept the financial...

Risk assessment: How to plan and execute a security audit as a small business 22 Risk assessment: How to plan and execute a security audit as a small business 23
Business8 hours ago

Risk assessment: How to plan and execute a security audit as a small business

By Izzy Schulman, Director at Keys 4 U Despite the current global coronavirus pandemic and the uncertainty it has placed...

Buying enterprise professional services: Five considerations for business leaders in turbulent times 24 Buying enterprise professional services: Five considerations for business leaders in turbulent times 25
Business9 hours ago

Buying enterprise professional services: Five considerations for business leaders in turbulent times

By James Sandoval, Founder and CEO,  MeasureMatch  The platformization of professional services provides businesses with direct, seamless access to the skills...

Wireless Connectivity Lights the Path to Bank Branch Innovation 26 Wireless Connectivity Lights the Path to Bank Branch Innovation 27
Technology9 hours ago

Wireless Connectivity Lights the Path to Bank Branch Innovation

By Graham Brooks, Strategic Account Director, Cradlepoint EMEA As consumers cautiously return to the UK high street in the past...

Financial Regulations: How do they impact your cloud strategy? 28 Financial Regulations: How do they impact your cloud strategy? 29
Technology9 hours ago

Financial Regulations: How do they impact your cloud strategy?

By Michael Chalmers, MD EMEA at Contino How exactly do financial regulations affect your cloud strategy? It’s a question many of...

Newsletters with Secrets & Analysis. Subscribe Now