By Andy Bird CEO of Inoapps www.inoapps.com
Named after the mythical animal Unicorn businesses are, as their name suggests, extremely rare. To qualify, an organization needs a valuation of $1bn. These are companies that, through their continued success and ability to manage growth, attract many hundreds of millions of dollars from investors and banks alike. There is much debate though about how a business might become a unicorn and which ones are most likely to make it.
When it was reported recently that specialist technology investment bank GP Bullhound had identified my own company Inoapps, as one of twelve potential Scottish Unicorns; it was naturally an important milestone for us. We had been recognised for our rapid global growth as an Oracle Platinum Partner across EMEA, APAC and the Americas. This assessment had also recognised our potential to grow further and our ability to attract significant funding.
So it is speaking from experience then, as the head of a potential Unicorn, that I can see a number of opportunities and hurdles that either promote or negate a company achieving such significant growth. These are factors that will either sway or deter the favour of banks and other investors, differentiating a ‘potential unicorn’ from those organisations whose ambitions will always remain commercially mythical. To me, the key issue is one of getting the right IT infrastructure to support the levels of rapid and significant growth required. However, often, this need to transform a company’s financial and IT systems only becomes apparent to these organisations during key financial events, once new second stage investors start to get involved.
These are the financial events that transform the prospects of already fast growing companies, by catapulting them into a whole different league. This could be an IP listing or more often the need to identify new and significant sources of funding future growth. For rapidly growing enterprises, successfully attracting fresh funding is of paramount importance. Before an IP listing or signing off on a fresh funding round, banks and investors apply considerable scrutiny to the fast growing organisations that court them. However, this scrutiny doesn’t just apply to the finances or corporate treasury history. Banks and investors also closely examine the IT systems and administrative infrastructure that these fast growing companies have in place.
This systems scrutiny, by potential funders, seeks to reveal whether the right infrastructure is in place to support on-going growth should they choose to invest. It’s a natural process of risk reduction. Naturally, the investors’ fear is that the wrong systems will seriously damage the company’s prospects should they fail to keep pace when further growth is at hand.
Investors would like to see these companies upgrade to flexible Cloud based technologies that not only support growth and flexible working practices (such as mobile working) but that can also encourage innovation. Most importantly, such modern best-practice Cloud technology is incredibly scalable too – and able to cope with even the most rapid growth scenarios. As Unicorns are potentially quite different businesses, both banks and investors realise that if you are going to build something significant that is truly scalable globally, then you need a software core that really makes the most of the organisation’s potential. New back-office Cloud technology can enable this and do so quickly.
We frequently see this type of scenario occur with young, rapidly expanding Professional, Business and Financial services companies. Potentially, these include a number of companies that are ultimately destined for Unicorn status themselves. Typically, though, as these are organisations that have focused initially on securing rapid growth; a great deal of their early IT investment has been deployed to support their customer-facing and front-end operations. Thus, by the time they come to secure additional funding, they have often outgrown their original back-office systems and the back-office software they are using is wholly inadequate. Indeed, it is not unusual to find fast growing mid-market companies still cobbling their financial back-office data together with a mixture of entry-level accounting systems & spreadsheets.
The situation is little better with those using aging on-premise ERP systems. Here, over conservative FDs expect their IT staff to drive the choice of new back-office systems; whilst remaining fairly detached from the day-to-day implementation processes. The upgraded system could then take several years to get right and is deployed at considerable expense. Indeed, we have heard of long and complex on-premise upgrades costing more than £1m, which did not deliver any new functionality at all. These days the banks and investors just won’t wait that long and expect far more.
In contrast, by moving to the Cloud for application areas such as ERP and HCM, most systems’ weaknesses can be quickly overcome, often in just a matter of a few months. In addition, once transformed, the modern best-practice systems used in the back-office deliver superior levels of management reporting and analytics. This facilitates better business decision taking, budgeting and planning.
Another interesting factor, which we have noticed with these fast growing companies, is the appearance of a new breed of switched-on CFO. This new generation of CFO is far more hands-on and keen to identify new solutions that provide a structured, disciplined and future proofed alternative that is cost–effective. They are also aware of the kind of scrutiny they are likely to face. They have witnessed too how Cloud applications have permeated the mainstream and they are aware of the low entry-costs that this particular technology can deliver, together with a host of other best-practice benefits.
This new breed of CFO is also aware that there are a number of vendors that supply Cloud business software. With the technology’s incredible scalability, these modern CFOs see the clear advantages of buying multiple cloud applications from just one provider, where the apps are designed to work together, thereby eliminating any integration costs. As a result, the CFOs can acquire a complete range of modern and fully integrated best-practice Cloud systems quickly on a cash flow friendly OPEX basis. This approach also ensures an impressively low Total Cost of Ownership.
At Inoapps, we understand these benefits fully. We faced the same level of investor scrutiny in advance of our own financial event; receiving a £10 million investment of growth capital from BGF (Business Growth Fund), the independent company established to provide growth capital to UK businesses. For us an Oracle Platinum Partner we implemented integrated Cloud applications across our own finance, HR and sales & marketing operations. We made the move so that it was evident to investors that we had both strong financial control and a framework that supported growth through innovation. From a business point of view, this also gave us a very clear understanding of the needs of other fast growing companies seeking to achieve the same output.
So whilst not all fast growing companies might end up as Unicorns, it is clear to me that moving to the Cloud can provide a range of integrated cost-effective solutions that support the levels of sales growth and innovation required for commercial success. In addition, the cash flow friendly, methods by which these systems are available also fits naturally with a ‘need for speed’ once the pressure from investors gains momentum. The decision whether to carry on though with inadequate systems, or to make the move to the Cloud, is of course ultimately a choice that FDs, CFOs and their respective boards have to make for themselves. However, the chances are that in making the move to the Cloud, they will have the IT to deliver and support legendary performance levels for their business. If they don’t, they might find that their ability to generate & support further growth is purely just a mythical aspiration.
Iron Mountain releases 7-steps to ensure digitisation delivers long-term benefits
Iron Mountain has released practical guidance to help businesses future-proof their digital journeys. The guidance is part of new research that found that 57% of European enterprise plan to revert new digital processes back to manual solutions post-pandemic.
The research revealed that 93% of respondents have accelerated digitisation during COVID-19 and 86% believe this gives them a competitive edge. However, the majority (57%) fear these changes will be short-lived and their companies will revert to original means of access post-pandemic.
“With 80% still reliant on physical data to do their job, now is a critical time to implement more robust, digital methods of accessing physical storage,” said Stuart Bernard, VP of Digital Solutions at Iron Mountain. “Doing so can enhance efficiency and deliver ROI by unlocking new value in stored data through the use of technology to mine, review and extract insight.”
When COVID-19 hit, companies had to think fast and adapt. Digital solutions were often taken as off-the-shelf, quick fixes – rarely the most economical or effective. But they are delivering benefits – those surveyed reported productivity gains (27%), saving time (20%), enhancing data quality (13%) and cutting costs (12%).
So what now?
The Iron Mountain study includes guidance for how to turn quick-fixes into sustained, long-term solutions. The seven-steps are designed to help businesses future-proof their digital journeys and maximize value from physical storage:
1) Gather insights: The COVID-19 pandemic allowed organisations to test and learn. Companies should ensure these insights are fed into developing more robust solutions.
2) Use governance as intelligence: Information governance and compliance are fundamental to data handling. But frameworks aren’t just a set of rules, they hold valuable insights that can be turned into actionable intelligence. Explore your framework to extract learnings.
3) Understand your risk profile: A key early step is to analyse where you are most vulnerable. With data in motion and people working remotely, which records are at risk? What could be moved into the cloud? Are your vendors resilient?
4) Focus where you will achieve greatest impact: To prioritise successfully, you need to know where you will achieve the largest impact. This involves looking beyond initial set-up costs towards the holistic benefits of digitisation, including reducing time spent on manual scanning, and the risk of compliance violations.
5) Reach out and collaborate: We are all in this together. Your IT, security, compliance and facility management teams are all facing the same challenges. Ensure you collaborate across functions to develop robust, integrated solutions.
6) Find a provider who can relate to your digital journey: For companies that still rely heavily on analogue solutions, digitisation can be daunting and risky. It pays to find a vendor who has been on the same journey, understands your paper processes and can guide you through the digital world.
7) Prioritise and evolve communication and training programmes: To reap the full rewards from any digitisation initiative, thorough and continuous communication and training is critical. Encouragingly, our survey found that 81% of data handlers have received training to work digitally which is an excellent step in the right direction, but consider teams beyond data handling to truly succeed.
The research was commissioned by Iron Mountain in collaboration with Censuswide. It surveyed 1,000 data handlers among the EMEA region. It found that the departments that have digitised more due to COVID-19 include IT support (40%), customer relationship management (36%), and team resource planning (34%).
3D Secure: Why are fraudsters still slipping through the net?
By Tim Ayling, VP EMEA, buguroo
There is a constant tension between keeping online payments secure, and offering an easy and frictionless user experience. Digital transformation – especially accelerated by the global pandemic – leaves consumers expecting online services to be seamless. Customers are even liable to abandon a process altogether if they encounter a hurdle.
Financial regulation and security protocols exist to help ensure that a balance is maintained between offering customers this frictionless experience, and keeping them and their funds safe from fraud attacks.
What is 3D Secure?
3D Secure is one such protocol. This payer authentication system is designed to keep card-not-present (CNP) ecommerce payments secure against online fraud. The card issuer uses 3D Secure when a card is used to pay for something online, authenticating the customer’s identity based on personal identifiers, such as the three-digit CVV code on the back of a card, as well as the device they’re using to make the payment and their geolocation or IP address.
3D Secure is important because although transactions can be accepted or denied based on the level of risk, it’s not always as clear as ‘risky’ or ‘not risky’. A small number of transactions will have an undetermined or questionable level of risk attached to them. For example, if a legitimate customer appears to be using a new device to buy goods online, or appears to be attempting to make the transaction from an irregular location. In these instances, 3D Secure provides a step-up authentication, such as asking for a one-time password (OTP).
Getting the right balance
3D Secure is a helpful protocol for card issuers, as it allows banks to comply with Strong Customer Authentication as required by EU financial regulation PSD2 as well as increase security for transactions with a higher level of risk – thereby better filtering the genuine cardholders from fraudsters.
This means that the customers themselves are better protected against fraud, and the extra security helps preserve their trust in the bank to be able to keep their money safe. At the same time, the number of legitimate customers who have their transactions denied is minimised, improving the customer’s online experience.
So why are fraudsters still slipping through the net?
Fraudsters are used to adapting to security protocols designed to stop them, and 3D Secure is no exception. The step-up authentication that is required by 3D Secure in the instance of a questionable transaction often takes the form of an OTP, a password or secret answer known only by the bank and the customer. However, there are various ways that fraudsters have devised to steal this information.
The most common way to steal passwords is through phishing attacks, where fraudsters pretend to be legitimate brands, such as banks themselves, in order to dupe customers into giving away sensitive information. Fraudsters can even replace the pop-up windows that appear to legitimate customers in the case of stepped-up authentication with their own browser windows disguised as the bank’s. Unwitting customers then enter the password or OTP and effectively hand it straight over to the fraudsters.
Even when an OTP is sent directly to a customer’s phone, fraudsters have found a way to intercept this information. They do this through something called a ‘SIM swap scam’, where they impersonate their victim and manage to get the legitimate cardholder’s number switched onto a different SIM card that they own, thereby receiving the genuine OTP in the cardholder’s place.
This is especially an issue for card issuers when taking into account the liability shift that is attached to using 3D Secure. When a transaction is authenticated using 3D Secure, the liability moves to lie with the card issuer, not the vendor or retailer. If money leaves a customer’s account and the transaction was verified by 3D Secure, but the customer says they did not authorise the transaction, the card provider becomes liable for any refunds.
How AI and Behavioral Biometrics can be used to plug the gap
Banks need to find a way to accurately block fraudsters while allowing genuine customers to complete online payments. AI can be used alongside behavioural biometrics as an additional layer of security to cover the gaps in security through continuous authentication of the customer.
Behavioural biometrics can collect and analyse data from thousands of parameters around user behaviour such as their typing speed and dynamics, or the trajectory on which they move the mouse, throughout the entire online session. AI processes are used to dynamically compare this analysis against the user’s usual online profile to identify even the smallest of anomalies, as well as against profiles of known fraudsters and typical fraudster behaviour. AI then delivers a risk score based on this information to banks in real time, enabling them to root out and block the fraudulent transactions.
As this authentication occurs invisibly, the AI technology can recognise if the customer is who they say they are – and that it isn’t a fraudster trying to input a genuine OTP they have managed to steal through phishing or SIM swapping – without adding any additional friction.
Card issuers cannot decline all questionable transactions without losing customers, while approving them without additional checks poses security issues that can result in financial losses as well as losses in customer trust. Behavioural biometrics is a foundational technology that can work simultaneously to 3D Secure to keep customers’ online payments safe from fraud while maintaining a frictionless experience and minimising the risk of chargeback liability for banks.
Track and Trace and Other Lost Data
By Ian Smith, General Manager and Finance Director at Invu
You, like me, were probably amazed by the now infamous loss of the over 16,000 positive test results in the track and trace system due to an Excel spreadsheet error.
You, like me, probably wondered how the Government could get something so important so wrong?
But perhaps we should ask are we standing in a greenhouse launching stones?
Data risks from software
Today we are spoilt with software offerings that help us with both our personal and our work lives.
Microsoft Excel is a powerful application and offers many functions now that required moderately complex macro writing in the past, seducing all of us into submitting more data for it to analyse. In finance, we tend to solve all those problems our applications cannot address using Excel.
In finance, we also know the risks of formula errors, and if we have relied on it enough, we will have our own war stories to go with these risks. Yet, we often continue to use the tool for operations that make those folks with an information technology background shake their heads.
These Excel files nowadays may find themselves resident on a local file server or one of the many file servers in the cloud (like those from the big three, DropBox, Google Drive and Microsoft OneDrive or other less well-known file sharing applications). Many of us use these in multiple ways.
Beyond finance and Excel, there are now many applications that we run our data through and leave data stored in the form of documents, comments and notes.
The long-standing example is email. We today receive many documents via email, with content in the body often providing context. Email systems then become the store for that data. While this works from a personal point of view, for a business working at scale, the information stored this way can be lost to the rest of the business. Just like data falling off a spreadsheet when there are not enough rows to capture the results.
More recently, we have seen easy to consume applications develop in many areas like chat and productivity. Take for example task management apps, my own preference being Monday.com (I am sparing you the long list of these). The result of the task and how we got there, in the form of attachments or comments, are often stored in the application. Each application we touch encourages us to leave a bit of data behind in its store.
Many of these applications can have a personal use and an initial personal dalliance is what sparks up the motivation to apply the application to a business purpose. Just like the “Track and Trace System”, they can often find themselves being used in an environment where the scale of the operation overwhelms their intended use.
In our business lives, combining the use of applications in this way by liberally sprinkling our data across multiple systems often stored in documents (be they Microsoft Word, email, scans or comments and notes) puts us on the pathway to trouble.
Imagine how Matt Hancock felt explaining to Parliament that the world-class track and trace system depended on a spreadsheet.
Can you imagine a similar situation in your business life? Say, for example, that documents or data in some form was lost because of the use of disparate systems and/or applications that were not really designed for the task you assigned to them.
Who would be your Parliament?
Now you can see yourself in the greenhouse, you may not want to reach for that metaphorical stone.
If these observations create some concerns for you, you may want to consider the information management strategy at your business. You have a strategy, even if it is not addressed specifically in documents, plans or thought processes.
These steps may help figure out where you are and where you want to go.
- Assess your current environment.
Are you a centraliser, with all the information collected in one place? Or is all your data spread across multiple stores, as identified above? Are you storing your key business information on paper documents, or digitally or a mix of both.
- Assess your current processes.
Do your processes run on a limited number of software applications? Or do you enable staff to pick their own tools to get things done? The answer to this question is often a mix of both where staff bridge the gaps in those applications using tools like MS excel. A key application to think about is how the data in email, particularly the attachments, is made available to the business.
- Design a pathway for change and implement it.
Start with the end in mind. I suggest the goal is to enable the right people to have the right access to the information they require to do their job in real-time. I believe the way to effectively do this is to go digital. The fork in the road is then whether to centralise your information store or adopt a decentralised approach.
My own preferred route is to centralise using document management software that enables all your documents to be stored in one place. Applications like email can be integrated with it, significantly reducing the workload required to file and store the data. The data can then be used in business applications using workflows. Thinking these workflows through will help you assess the gaps between your key business applications and consider whether tools like excel are being stretched too far.
The ever-changing representation of value
By Vadim Grigoryan, Partner, Lunu Solutions Ask a selection of people about cryptocurrencies and you’ll likely receive a wide range...
Revolut Junior introduces Co-Parent – teach children about money together
Premium and Metal customers can invite a team mate to jointly manage their child’s Revolut Junior account Setting Tasks, Goals...
The Next Evolution in Banking
By Young Pham, Chief Strategy Officer at CI&T Everything we know about banking is about to change. A new industry...
Equity Sharing – How do you choose the right plan for you?
By Ifty Nasir, co-founder and CEO of Vestd, the share scheme platform In a survey of 500 SMEs, nearly half...
Cash was our past, contactless is our present, contextual payments are the future
By Jason Jeffreys, founder of FETCH $6tn in the next five years, this is how much the world will spend...
Iron Mountain releases 7-steps to ensure digitisation delivers long-term benefits
Iron Mountain has released practical guidance to help businesses future-proof their digital journeys. The guidance is part of new research that found...
3D Secure: Why are fraudsters still slipping through the net?
By Tim Ayling, VP EMEA, buguroo There is a constant tension between keeping online payments secure, and offering an easy...
Banks talk a good game, but are bankrupt when it comes to change and innovation
By Erich Gerber, SVP EMEA & APJ, TIBCO Software You hear all the time about the incredible pace of change...
Vietnamese National Citizen Bank Rises to Excellence with Three Global Financial Awards
Hanoi, Vietnam – Global Banking & Finance Review is proud to announce the sweeping victory of National Citizen Bank in...
The Rise of Contactless Payments
By Bilal Soylu, CEO of XcooBee Today, banks involved in the issuances of credit cards, and companies at the nexus...