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Cyber is the new front line in modern economic warfare

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Cyber is the new front line in modern economic warfare

By Peter Matthews, CEO, Metro Communications

The threat to banking and finance across the world can’t be overestimated –cyber is the new frontline in modern economic warfare.

The challenge from underground activists, organised criminals, state-sponsored actors and have-a-go hackers is gargantuan. When your enemy has a global recruiting ground, fast-evolving weaponry and the ability to walk through walls, staying ahead of the game can seem impossible. But while no organisation, institution or territory is impenetrable, the financial sector can – and must –become much more resilient.

A recent consultation paper on cyber security in the financial sector, jointly authored by the Bank of England, Prudential Regulation Authority and Financial Conduct Authority, seeks to redefine resilience by switching the emphasis from systems to services and people.In other words, rather than invest in scheduled system upgrades and renewals as a matter of course, organisations should focus their efforts on those systems that are needed to maintain key services, such as making purchases, receiving payments and delivering lending and saving.

This approach to resilience requires that organisations have a back-up system, ideally based at a different site.It also suggests they should:

  • Identify essential services and map the systems that support those services
  • Test security measures regularly to ensure they remain fit for purpose
  • Establish secure communications channels and protocols, including for smartphones and other mobile devices
  • Take specialist advice on preventing cyber crime and detecting it early
  • Develop intelligence on current and emerging threats and how to respond to them
  • Raise awareness and build a culture of cyber security
  • Learn from previous incidents by sharing information and good practice.
Peter Matthews, CEO, Metro Communications

Peter Matthews, CEO, Metro Communications

In my opinion, there are two major areas that rarely get the recognition they deserve: raising awareness and establishing secure communications.

An awareness of cyber security can mean the difference between containing and compounding the effects of an attack. It is not unusual for organisations to make a bad situation worse by using compromised technology to report breaches. In fact, hackers often carry out the initial attack in order to monitor messages, redirect traffic, intercept new passwords and inflict even more damage. It’s easy to see how an organisation– using a hacked system to rectify a breach –could inadvertently infect their own back-up system, effectively handing criminals the keys to their safe house.

In the words of Bank of England executive director Andrew Gracie, ‘Cyber is not a minority sport for technologists… it is about culture too and this means people and processes’.Everyone, from senior managers to frontline workers and the board of trustees, needs to play a part in maintaining data security.

The second key area– secure communication channels, including those built into mobile phones–is vital in protecting data and conversations when it’s business as usual. But these secure channels are also essential to safely deliver solutions following a cyber incident. For example, business-grade security apps on mobile phones don’t just encrypt data; they secure metadata (such as contact lists, location and caller identity)to protect sensitive conversations between key individuals. This also thwarts hackers who rig up fake mobile phone masts to intercept and record commercially sensitive conversations,and enables people who travel for work to use unsecured hotel WiFi with confidence.

Other technological solutions, such as enterprise mobility management solutions (which manage the security of all devices in an organisation), firewalls, antivirus software and user authentication and privileges may also be part of the answer.

Butresiliencedoesn’t stop at technology. Buying costly software that tries to deal with every eventuality–often causing as many problems as it cures–isn’t the answer. Again, it’s about knowing what’s important to your business and developing an intelligent, focused and proportionate response to deal with key threats and vulnerabilities.

The financial sector is highly susceptible to cyber crime because of its importance to maintaining life as we know it. The entire system balances on a pinhead of confidence, and its global connections offer criminals a potential goldmine of devastation. It’s worth remembering that the recent Webstresser attack, which sold the ability to disable financial services for just $14.99 a head, was responsible for more than four million attacks across the world before the website was finally disabled by authorities in eleven countries.

Striking at a single internationally connected organisation in one country could give hackers the satisfaction of causing major disruptionacross the world. That might explain why attacks on banking and finance have increased by around 80% over the past year. It is why major financial institutions will soon face exacting new standards, developed by the Bank of England and the National Cyber Security Centre (NCSC), to ensurethey canrestore vital services following a cyber incident, within a specific timeframe. And it is why I believe that the sector as a whole must raise its game. All organisations need to be clear about what resilience looks like and play their part in delivering it.

For more advice about how to protect your mobile phone conversations, contact Metro Communications.

Business

An unprecedented Black Friday: How can retailers prepare?

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An unprecedented Black Friday: How can retailers prepare? 1

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.”

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Optimistic outlook for 2021 public M&A

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Optimistic outlook for 2021 public M&A 2

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.
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5 steps for SMEs to budget properly for the coming year

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5 steps for SMEs to budget properly for the coming year 3

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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