- Companies will spend 8 hours a day on average, or a full-time employee all day, trawling databases to meet GDPR requirements
- Large companies will spend 60 hours a day on data searches – equivalent to 7.5 employees
- 60% of European companies are not “GDPR ready”, with a quarter (24%) deemed “GDPR at risk” and 36% “GDPR challenged”, indicating potentially tens of billions in fines
- 44% of businesses are “concerned” about ability to be GDPR compliant – but smaller companies demonstrating worrying lack of awareness and may be underestimating risk
- Single subject search identified as the missing link in GDPR compliance
A significant number of EU businesses are sleepwalking towards massive penalties due to a lack of awareness of the scale of the General Data Protection Regulation (GDPR) data collection challenge. This is a central finding of a major report released today by Senzing, the California-based software technology company.
The research – Finding The Missing Link in GDPR Compliance– is based on the views of more than 1000 senior executives from companies in the UK, France, Germany, Spain and Italy. It finds that, on average, a company will get 89 GDPR enquiries per month, for which they will need to search an average of 23 different databases, each taking about 5 minutes. The total time spent simply looking for data per month will be more than 10,300 minutes (172 hours) equating to over 8 hours of searching per working day – or 1 employee dedicated solely to GDPR enquiries.
The issue is even more pronounced for large companies. These expect to get an average 246 GDPR enquiries per month, for which they will need to search an average of 43 different databases, each taking more than 7 minutes. They will spend more than 75,500 minutes per month (1259 hours) which equates to nearly 60 hours of searching per working day – or 7.5 employees dedicated solely to GDPR enquiries every day.
The data collection challenge is exacerbated by a significant proportion of businesses which admit to not being confident about where their relevant data is housed or being able to account for all their databases. More than 1 in 10 (12%) companies say they are not confident that they know where all their data is stored; less than half (47%) are “very confident”. 15% of businesses are not confident that they have accounted for all the different databases containing personal/customer data, with only a third (35%) stating they are “very confident”.
Jeff Jonas, Founder and CEO, Senzing, says: “These findings reveal the true extent of the GDPR compliance challenge. Businesses will be faced with a mountain of data to trawl through – the end result will be a significant time and personnel cost and a great risk of missing records or worse, including the wrong records. Whilst this time requirement is most onerous for large companies, they have greater resources at their disposal. Relative to size, SMEs face a similarly gargantuan task.”
High level of concern over compliance – but the problem is still underestimated by many
Although 44% of companies say they are “concerned” about their ability to be GDPR compliant – rising to 60% in the case of large companies – many businesses are demonstrating a dangerous lack of awareness about GDPR and overconfidence that they will not be affected. Only a third of companies (35%) are aware that the potential financial fines for non-compliance, which in the worst cases can be €20 million or 4% of global annual turnover, are very severe. An alarming 30% say that financial penalties will have no impact at all; 15% say that they “don’t know” about the impact of financial fines.
Smaller businesses appear to have less appreciation for the seriousness of GDPR non-compliance. A greater proportion of large companies than SMEs understand the severity of the impact of the financial fines. 38% of SMEs and 29% of micro businesses recognise that the financial penalties could have a severe impact on them compared to almost half (47%) of large companies.
This divide between the attitudes of large and small businesses is evident in their planning for GDPR. A quarter (27%) of SMEs and half (50%) of micro businesses say their current set up is optimum and they do not need to make any changes to their operations, compared to just 16% of large companies who believe this. On average, 38% of companies do not intend to take any preparatory action. However, 39% plan to overhaul their IT/customer data systems and a further 15% intend to hire data analysts to collect data. Again, larger companies are more proactive; two thirds (64%) will overhaul their IT and a third (33%) will hire analysts.
Jonas comments: “Many businesses appear to be sleepwalking towards a GDPR abyss. The fines that can be levied for non-compliance will be potentially terminal to some organisations and even the largest companies – and certainly their shareholders – will feel a significant impact. A huge number of companies simply don’t understand the dangers of non-compliance – with smaller firms apparently particularly unaware. “The fact there is such a distinction in the level of confidence between large and small companies in their existing data collection set up is disturbing. It suggests strongly to us that SMEs and micro businesses are seriously underestimating the impact that GDPR will have on their systems and are demonstrating misplaced optimism.”
60% of EU businesses “at risk” or “challenged” by GDPR
Based on responses, Senzing calculates that a quarter (24%) of EU companies are “at risk” in terms of being GDPR compliant. A further 36% are deemed “challenged” by the regulation, with only 40% being classed as “ready”. Taken as a proportion of all businesses operating in the EU, this could translate into tens of billions, if not hundreds of billions, of euros in fines.
Jonas adds: “You can’t search what you can’t find. Finding out who is who and where their data is should be the first principle of GDPR compliance. Our worry is that, in investing in systems, processes and personnel, many companies are attempting to reach bases two, three and four without first getting to first base. These findings point towards the fact that the missing link in GDPR compliance is single subject search. Companies are overlooking the urgent need to be able to perform a single smart subject search to find out who is who in their data. Without this, the critical enabler of GDPR readiness, many businesses will be unable to meet the demands of GDPR.”
To address this single subject search gap, Senzing is launching G2 for GDPR. This software was developed to enable organisations to resolve who is who in their data, quickly and cost-effectively, factoring in multiple databases, erroneous inputs, misspellings, duplications and different names and aggregating everything relevant for one data subject. This is designed to facilitate GDPR compliance.
An unprecedented Black Friday: How can retailers prepare?
Retailers must invest heavily in their online presence and fight hard to remain competitive as a second lockdown stirs greater uncertainty
With an unprecedented Black Friday and Cyber Monday weekend on the horizon (27th – 30th November), eCommerce hosting and consultancy expert, Sonassi, advises retailers to strengthen their online presence and make the necessary preparations for a fatigue in consumer spending.
James Allen-Lewis, Development Director at Sonassi, explains: “This year’s golden quarter has squeezed together three of the biggest sales periods like never before, meaning retailers will have to fight harder than usual to remain competitive this Black Friday. With greater discounts over a longer period of time, alongside the fact that a second lockdown has moved everyone and everything online, retailers will be battling it out for a share of decreasing consumer spending.
“However, this sense of uncertainty should not deter merchants from implementing their sales strategies this Black Friday and Cyber Monday weekend. Instead, they must go further than simply providing online discounts and tackle challenges head on by re-focusing their efforts on creating a highly competitive user experience. Successful merchants will make the necessary preparations for a change in consumer demand and invest more heavily in their eCommerce infrastructure.
“One way in which retailers can do this is by using last year’s Black Friday as a case study to inspire their future response. For example, retailers should take note of the key consumer behaviours that transpired throughout last year’s mega peak in discounting and plan accordingly for the upcoming Black Friday and Cyber-Monday weekend.
“Tactics such as providing the ultimate online delivery service and secure payment methods will also be pivotal for retailers looking to survive a fatigue in online spending. Consumers will look to retailers who do not overpromise on items like next-day delivery and ensure their checkout process is safe and frictionless for all. It is the retailers who embrace this fact and meet the needs of the conscious consumer that will win their share of consumers wallets.
Allen-Lewis concludes: “With Black Friday and the build-up to Christmas just around the corner, retailers must adapt to changing consumer demand, invest more heavily in their eCommerce infrastructure and focus their efforts on creating the ultimate online experience. The only way to plan ahead amid challenging times is to listen to the needs of the customer.”
Optimistic outlook for 2021 public M&A
Optimism is returning and the outlook is positive for the Australian M&A market in 2021 after a COVID-induced crash in deal activity in 2020, according to Corrs Chambers Westgarth’s tenth M&A 2021 Outlook report.
The special report reveals that an environment of historically low interest rates positions M&A as a significant means of achieving growth and generating returns, including for private equity firms looking to deploy capital and strategic buyers focused on complementary acquisitions.
With the unprecedented challenge of the COVID-19 pandemic, global political instability and arguably the greatest economic challenge since the Great Depression, M&A 2021 Outlook details somewhat surprising trends emerging for the next 12 months and analyses a number of common COVID-19 myths and their influence on future M&A deal making.
Corrs’ detailed examination of the Australian M&A market draws on data taken from the firm’s proprietary database of transactions combined with in-depth research for the 12-month period ending 30 September 2020.
Key trends identified in the report include a rapid escalation in M&A levels and an increase in creativity in pricing and speed in closing deals, while also highlighting the critical need for support from target shareholders. Conditions also appear to be set for a continued rise in equity prices as a result of the ongoing influx of capital into Australian equity markets, making it imperative that bidders employ strategies to move quickly on M&A transactions.
Discussing the M&A 2021 Outlook, Corrs Head of Corporate, Sandy Mak, said “Despite a challenging year, our research indicates that 2021 could well see the volume and value of deals continue to grow. We are already witnessing this uptick in activity and while some industries and sectors are seeing a faster rebound than others, early indications are that the wider public M&A market will continue to strengthen over the coming months.”
Based on its detailed research, the M&A 2021 Outlook report discusses further key findings including:
- Deal volume and value is the lowest since 2016, however volumes have shown significant recovery since June 2020.
- More than 50% of deals in 2020 were ‘hostile’ and not recommended at the outset.
- 71% of deals over A$500 million were structured by way of a takeover – a significant increase from prior years – largely as a result of increased competition for assets through rival bids.
- Despite border closures and the tightening of foreign investment regimes, the percentage of deals with foreign bidders has increased materially since April 2020.
5 steps for SMEs to budget properly for the coming year
By Fabio Comminot, Head of Dealing, Switzerland at Ebury, one of Europe’s largest Fintechs, has provided a five-step guide to make sure budgeting is done on time.
During the challenging times of COVID-19, it is difficult to forecast orders and costs. This is especially true for SMEs that operate internationally and therefore are exposed to currency fluctuations and market movements. So budgeting is immensely important.
Autumn is budget season for most companies. Upcoming project costs, sales and fixed costs must be defined or forecasted. Budget planning should be as accurate as possible right from the start of the process to avoid unexpected consequences at the end of the year..
With the effects of the COVID pandemic it has become difficult for all companies, no matter their size or history, to plan and make sales forecasts. Early planning and hedging are especially important for companies that work internationally and are therefore particularly exposed to currency risk.
These five steps will help SMEs take the right measures for the coming financial year, in time for budget season:
Step 1: Estimate your costs or sales in foreign currencies
As difficult as it may seem, every company must estimate its expected fixed and variable costs for the coming year. Most companies can forecast their revenues based on experience or existing orders.
However, start-ups or young companies should also be able to at least estimate their costs including rents, insurance, wages and production costs. Special attention should be paid to costs or revenues that are spent or received in a foreign currency.
Step 2: Profit or cost assurance – define the strategy
As soon as an approximate plan for the coming year is in place, the company should consider the importance of currency management. Regular earnings or expenditures in foreign currencies are exposed to movements in exchange rates. If costs in a foreign currency are to be forecasted until the end of the year, the company needs to minimise volatility. This means that the exchange rate should be fixed so that there are no unexpected negative consequences at the end of the year.
Another option would be to protect the operating profit. Fluctuating exchange rates can rapidly ruin intended profit margins. In this case the company could aim to define the forecasted sales in the foreign currency and fix the margin based on this.
Step 3: Fix your budget rates
The budget is set, the currency management goals are defined, the major part is done. Now it is a matter of defining the budgeted rates for the various currencies based on the current exchange rate. A buffer of about 5% can be useful when doing this – for example. instead of fixing the exchange rate from US dollar to Swiss franc at the current 91 cent, a rate of 95 cent could be budgeted. In this way, the minimum budget rate is defined and any negative exchange rate movement can be at least partially compensated for.
Step 4: Define the hedging strategy
With the targets and the budget course set, the next questions are: What currency developments can be expected? What is the industry outlook? Is the order situation relatively secure? Or is there practically no empirical data?
This step is where Ebury can support the company. Our experts in FX markets help answer these questions and begin to define the individual hedging strategy.
Step 5: Ensure a flexible fit
It’s done: the measures have been defined, now it’s time for implementation.
Ebury will implement the previous steps and , so that the company focuses on its core business. In contrast to traditional financial services providers such as banks, Ebury constantly monitors international trade and political events in order to assist clients with strategy adjustments. The Ebury team is supported by state-of-the-art technology and international currency analysts. It makes no difference whether the changes are driven by the currency market or whether the company’s order situation itself is changing. This allows the SME to focus on its operational business, which is worth a lot in uncertain times like these.
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