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Plotting the route to IFRS17 compliance

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Plotting the route to IFRS17 compliance

Henri Wajsblat, Head of Financial Services Solutions, Anaplan

The International Financial Reporting Standard 17 standard (IFRS17) is not just another regulation – it will fundamentally change the way that insurers can and will operate around the world.

At its core, IFRS17 will create an international, uniform view of insurers’ reporting of financial statements. Where previously each regional market disclosed these figures in its own way, regulators will now be able to compare the outputs of an insurance company in UK or Australia for example, with any other insurer in the world. A harmonised system, but one that comes at a cost to insurance companies – the long journey to compliance. This will be a complex compliance quest to the deadline date. Managing this through a connected planning approach will be key to success.

The regulation

While the implementation date of IFRS17 is 1st January 2021, the journey to compliance will be a long one and businesses need to get moving now. It represents a systemic change in the valuation of insurance contracts – impacting insurers and reinsurers alike. It will require a significant overhaul of financial and actuarial systems, processes, accounting and disclosure policies. IFRS17 compliance has quickly become a high business priority. The ripple effects of which will be felt right throughout the finance value chain: from finance calculations to accounting, costing, planning, forecasting and reporting.

Given the scale and complexity of the changes required, the countdown clock to 2021 is ticking loudly in the halls of insurance firms around the world. Finance and actuary functions will need to collaborate much more closely to map their journey to compliance under the new IFRS17 standard and assess the architecture gaps within the IT infrastructure.

The tech-patch trap

To deliver on the transparency and reporting requirements of IFRS17, insurers will have to generate and process much higher volumes of data – and indeed improve the quality of that data. There will need to be a complete shift in the way that information is collected, stored and analysed. For example, finance, actuarial and risk management IT architectures used today are often siloed and rely on legacy tools that are not flexible enough to handle the detailed requirements of IFRS17. The temptation then is to just attempt to patch up the existing separate solutions. Like putting a band-aid on a leaky waterpipe, it may seem like a simple and cost-effective answer at first, but over time, it may prove incredibly costly and risky. The siloes make for very manually intensive (and error prone) data management, trying to trace the reported figures back to the calculation models and assumptions that produced them.

That deals with the present, but IFRS17 also makes demands on the future. It introduces the concept of a forward-looking view on the finance data. Cash-flow modelling and forecasting, consistency of planning and forecasting models with the new external reporting framework, ability to simulate the impact of a new product or a change in pricing on the IFRS17 financial statements: these all become key functionality requirements for technology under the new regulation. Trying to achieve that with an existing set of siloed solutions is a challenge that  insurers do not even want to contemplate.

The road to the platform

So, what’s on the checklist for this journey to 2021? By the deadline, insurers should have addressed technology solution requirements for Contract Service Margin calculations, IFRS17 compliant accounting systems, IFRS17 cost allocations, adapted planning, forecasting and management information to the new IFRS17 KPIs, and IFRS17 reporting and disclosures. While implementing all these various layers of functionality, they will have to run sensitivity analyses and simulations, scenario modelling and IFRS17 impact assessments of any material changes in their business.

Mapping your way to data nirvana

The very act of complying with this new regulation will force insurers to assemble and orchestrate huge amounts of data from a variety of source systems. But this bi-product of compliance will be a hugely valuable resource and insurers could turn a compliance expense into a business return on investment – if they adopt a unified data platform to tackle IFRS17.

It’s this joining of the dots that will give insurers a clearer view of their insurance contracts’ performance. That connected planning approach enables them to gather data from various functions and view in a single platform for planning and forecasting. It eliminates silos across the organisation and eases data reconciliations – so the business can have confidence in these projections. But it will also enhance the comparability of the financial reporting and help insurers benchmark themselves against the best in the world. They can comply and get insight into how they can perform and operate better.

Tony Trewhella, a consulting partner at Deloitte summed the situation up perfectly: “I think that insurers should start as soon as possible to run their initial PAA/BBA assessments, and they should also be, as part of the assessment, looking at a unified data platform to support the large volume of data required to support the regulatory requirements. In the past the level of detail required for IFRS17 was locked up within sub-ledgers and contract systems, and nobody could really get to it for insight purposes. Now that they’re forced to unify that information, they can put layers of analytics on top of it and can start to really be an insight driven organisation.”

Today’s reliance on heavily-manual processes and legacy systems within the finance function has to change. The demands from IFRS17 simply make it impossible to keep going down this path. Insurers will need to look towards collaborative and open platform solutions that can mine and orchestrate the data from across the business, support the implementation of the core reporting requirements and be agile enough to respond to scenario modelling and the what-if analyses required during the transition period. It’s not going to be easy. But it’s a difficult journey worth taking.

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U.S. inauguration turns poet Amanda Gorman into best seller

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U.S. inauguration turns poet Amanda Gorman into best seller 1

WASHINGTON (Thomson Reuters Foundation) – The president’s poet woke up a superstar on Thursday, after a powerful reading at the U.S. inauguration catapulted 22-year-old Amanda Gorman to the top of Amazon’s best-seller list.

Hours after Gorman’s electric performance at the swearing-in of President Joe Biden and Vice President Kamala Harris, her two books – neither out yet – topped Amazon.com’s sales list.

“I AM ON THE FLOOR MY BOOKS ARE #1 & #2 ON AMAZON AFTER 1 DAY!” Gorman, a Los Angeles resident, wrote on Twitter.

Gorman’s debut poetry collection ‘The Hill We Climb’ won top spot in the online retail giant’s sale charts, closely followed by her upcoming ‘Change Sings: A Children’s Anthem’.

While poetry’s popularity is on the up, it remains a niche market and the overnight adulation clearly caught Gorman short.

“Thank you so much to everyone for supporting me and my words. As Yeats put it: ‘For words alone are certain good: Sing, then’.”

Gorman, the youngest poet in U.S. history to mark the transition of presidential power, offered a hopeful vision for a deeply divided country in Wednesday’s rendition.

“Being American is more than a pride we inherit. It’s the past we step into and how we repair it,” Gorman said on the steps of the U.S. Capitol two weeks after a mob laid siege and following a year of global protests for racial justice.

“We will not march back to what was. We move to what shall be, a country that is bruised, but whole. Benevolent, but bold. Fierce and free.”

The performance stirred instant acclaim, with praise from across the country and political spectrum, from the Republican-backing Lincoln Project to former President Barack Obama.

“Wasn’t @TheAmandaGorman’s poem just stunning? She’s promised to run for president in 2036 and I for one can’t wait,” tweeted former presidential candidate Hillary Clinton.

A graduate of Harvard University, Gorman says she overcame a speech impediment in her youth and became the first U.S. National Youth Poet Laureate in 2017.

She has now joined the ranks of august inaugural poets such as Robert Frost and Maya Angelou.

Her social media reach boomed, with her tens of thousands of followers ballooning into a Twitter fan base of a million-plus.

“I have never been prouder to see another young woman rise! Brava Brava, @TheAmandaGorman! Maya Angelou is cheering—and so am I,” tweeted TV host Oprah Winfrey.

Gorman’s books are both due out in September.

Third on Amazon’s best selling list was another picture book linked to politics and projecting hope: ‘Ambitious Girl’ by Vice-President Kamala Harris’ niece, Meena Harris.

(Reporting by Umberto Bacchi @UmbertoBacchi, Editing by Lyndsay Griffiths. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

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Why brands harnessing the power of digital are winning in this evolving business landscape

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Why brands harnessing the power of digital are winning in this evolving business landscape 2

By Justin Pike, Founder and Chairman, MYPINPAD

Delivery of intuitive, secure, personalised, and frictionless user experiences has long been table stakes in digital commerce, well before the era of COVID-19. As businesses harness the revolutionary power of digital technologies, they have pursued large-scale change to adapt to evolving consumer preferences (some more successfully than others, but that’s a blog for another day). Digital transformation is a term we hear repeatedly, and it looks different for each organisation, but essentially, it’s about utilising technology and data to digitise, automate, innovate and improve processes and the customer experience across the entire business.

As I said, this was already well underway but then came 2020 and no industry escaped the disruption of the coronavirus outbreak, which has had an indelible impact on businesses performance, operations, and revenue. Regardless of whether the impact of COVID has been very positive or very challenging, it has forced organisations globally to re-evaluate and re-orient strategies to adapt.

As lockdowns and pandemic-related restrictions continue to change daily life, this raises the question of how we can balance a dramatic shift to digital and the benefits it brings, while ensuring business continuity and innovation both during and post-COVID, and protecting everyone against fraud?

Digital is an essential survival tool, and even more so in a COVID world

No one could have predicted the dramatic digital pivot that has taken place over this year. Indeed, within weeks of the COVID outbreak cash usage in the UK dropped by around 50%. Digital solutions including delivery applications, contactless payments, mobile commerce, online and mobile banking have become essential components of a touchless customer experience in the era of social distancing. It’s no longer just about an enhanced and superior customer experience, it’s also about health, safety and survival.

In store, businesses have benefited from contactless payments enabling faster throughput and reduced need for consumers to touch payment terminals (therefore requiring greater cleaning, which degrades the hardware much faster). Mastercard reported a 40% increase in contactless payments – including tap-to-pay and mobile pay – during the first quarter of the year as the global pandemic worsened. Digital has also become an essential sales channel for many B2C brands. Where brick and mortar stores have been required to close, digital commerce enables continuity of customer relationships and revenue. This channel also provides brands with rich customer data, which can be used to enhance and personalise the customer experience and typically results in greater levels of engagement and uplifts in revenue.

Industry forecasts estimate that worldwide spending on the technologies and services enabling digital transformation will reach GBP 1.8 trillion in 2023 – a clear indication that the process represents a long-term investment and a global commitment to digital-first strategy. The key point here is that digital brings significant benefits, and regardless of COVID, is here to stay.

The challenges that rapid digital transformation brings to businesses

Justin Pike

Justin Pike

Regardless of whether businesses are operating in developed or less-developed economies, these times of crisis have levelled the playing field in the sense that all businesses are facing similar issues. Access to products and supplies, maintaining customer relationships, accelerating sales for some and declining sales for others, health and hygiene are just a few of the unique challenges brought about by COVID.

Many businesses in physical environments have had to swiftly implement changes to significantly reduce safety risks for staff and customers, such as contactless payments, mobile ordering and delivery options. But with these changes come a host of other benefits of digitisation, such as faster transactions, and reduced human error at the point-of-sale.

The reliance on technology, however, can also expose organisations and consumers to certain vulnerabilities. In particular, the risks of fraud and cybercrime have dramatically increased since the onset of the pandemic as scammers have taken advantage of digital technologies to target both businesses and individuals.

As a McKinsey report illustrates, new levels of sophistication in the activities of fraudsters have placed more pressure on companies that have been previously slow to go digital, bringing “into sharp relief how vulnerable companies really are”, and damaging the financial health of small and large businesses. In fact, the Bottomline 2020 Business Payments Barometer reveals that only one in 10 small businesses across the UK report recovering more than 50% of losses due to fraud.

But take these stats with a grain of salt. While it is important to be aware of the risks and challenges this new business landscape brings, it’s equally as important to have a lens firmly across your own business, industry and audience, and to identify the changes you can make internally to mitigate risk as well as improve your customer experience. Where can you make some quick wins? Do you have the right skillsets internally to achieve what you need to achieve? What technology is out there that will enable your business goals? There are tech companies like MYPINPAD that are making huge strides in software development, which will transform businesses globally.

A digital world post-COVID

Almost a year in, the line between business success and failure remains fragile. However, an ongoing transition towards greater digitisation will be the difference between survival and the alternative.

There is a wide range of initiatives businesses can implement to weather this storm. If we look at the space MYPINPAD operates within, secure digital consumer authentication is crucial to the ongoing success and security of not only financial products but also identification and verification across a range of different industry verticals. Shifting the authentication of consumers securely onto mobile devices enables businesses to completely reshape their customer experiences. By bringing together a more seamless, frictionless customer experience, accessibility, privacy, security and access to consumer data, businesses are able to drive digital transformation across day-to-day activities.

Against this backdrop, software with stronger security standards continue to play an ever more vital role in supporting society, protecting consumers and businesses from the increase in risks that rapid digitisation brings. Already, merchants can deploy PIN on Mobile technology from companies like MYPINPAD, onto their smart devices to speed up the digitisation process many are now tackling.

Essentially, opening up universal payments and authentication methods that feel familiar, for both online and face-to-face transactions, will be key to opening up a world of possibilities when it comes to redefining how businesses engage with consumers.

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Brexit responsible for food supply problems in Northern Ireland, Ireland says

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Brexit responsible for food supply problems in Northern Ireland, Ireland says 3

LONDON (Reuters) – Food supply problems in Northern Ireland are due to Brexit because there are now a certain amount of checks on goods going between Britain and Northern Ireland, Irish Foreign Minister Simon Coveney said.

British ministers have sought to play down the disruption of Brexit in recent days.

“The supermarket shelves were full before Christmas and there are some issues now in terms of supply chains and so that’s clearly a Brexit issue,” Coveney told ITV.

The Northern Irish protocol means there are “a certain amount of checks on goods coming from GB into Northern Ireland and that involves some disruption,” he said.

(Reporting by Guy Faulconbridge; Editing by Tom Hogue)

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