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Reality Check: Will passwords become extinct in the world of e-commerce?

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Reality Check: Will passwords become extinct in the world of e-commerce?

Those who are said to be dead live longer and interestingly, this also applies to passwords. This established form of authentication has long been considered an anachronism to the constant evolution and modernisation of the Internet.

However, passwords still play a very large part in our online world and are the gateway to a whole host of activities including emails, social networks and last but not least, online shopping.

Even those who only use the internet occasionally for online shopping quickly accumulate a wealth of online accounts.

Although there are ways of logging in via third-party providers such as Google or Facebook, they no longer enjoy the unconditional trust of users following a number of highly publicised data scandals.

With the new FIDO2 open authentication standard, it is now possible, in principle, to use hardware tokens or biometric features for authentication directly via a browser. But what is behind the process and what potential does the technology have?

Urs Gubser, Head e-commerce strategy at SIX Payment Services provides a reality check.

Check 1: What exactly is FIDO2 and what concrete possibilities does it present?

The abbreviation actually hides two standards. One, WebAuthn, was developed by the FIDO Alliance (Fast Identity Online) in collaboration with the W3C (World Wide Web Consortium) organisation. It enables the integration of FIDO-based authentication methods directly into different browsers using a standardized API. Mozilla’s Firefox already supports WebAuthn from version 60 and Microsoft and Google plan to follow suit. The other part of FIDO2 is the Client to Authenticator Protocol (CTAP). This allows various external devices to transmit credentials to computers via Bluetooth, NFC or USB.

The new standard offers several ways to replace passwords. A USB stick as a hardware token is a form of digital key. When a user inserts the stick into their PC, they automatically authenticate, just as easy as unlocking a door. In addition, the technical capacities of smartphones can also be exploited as many of today’s devices already have fingerprint recognition capability which could also use this unique feature for authentication.

Check 2: What about safety?

You do not have to be an accomplished computer hacker to crack a password; many people still use very easy-to-guess character combinations like names and birthdays. In addition,

SIX Payments Services Ltd Hardturmstrasse 201 P.O. Box 1521 CH-8021 Zurich www.six-payment-services.com

criminals have access to a variety of software tools to help them find out passwords. These risks and potential breaches in security simply do not exist with a hardware token – however, it can be lost or stolen, just like a physical key.

Is the fingerprint the ID of choice? After all, it is unique with just one per person. That is of course unless someone makes a copy and manages to fool the sensor – which is exactly what the Chaos Computer Club did back in 2013.

Since then, detection technology has evolved but so have the methods to outsmart it. With the help of machine learning and artificial intelligence, American security experts last year managed to create a form of the master imprint that unlocked almost two out of three of the smartphones that were tested. A potential attacker using this approach does not even need the original print of the owner. Therefore, in the case of biometric authentication, the question that always comes up is whether it is possible for criminals to obtain copies of the features. Of course, unlike a password, you cannot easily reset your fingerprint. Currently, a 100% secure system does not exist, even in the digital world, but you can make it as difficult as possible for cybercriminals to undertake their activities.

This is best achieved by combining various security features. Fingerprint authentication can be combined with the voice check and an iris scan as further biometric security elements, or you can use a hardware token as an extra authentication check. With each additional step of a multifactor authentication process, the security increases. Whilst this does not completely eliminate the possibility of identity theft, it sets the barriers very high. Breaches become extremely unlikely while at the same time the process remains easy for the end user.

Check 3: What else will the retail sector be facing?

As passwords disappear, online shopping becomes easier and more intuitive for customers. Of course, it also benefits sellers. Retailers no longer have to reset passwords and can make more meaningful use of the resources they no longer need. Biometric methods are also particularly interesting for the simplification of 3-D Secure. In addition to the normal credit card data, this service often requires customers to provide an additional password, which results in many customers not completing the journey and abandoning their purchase. When using identity verification procedures that do not require a password, companies no longer have to forego these transactions.

For customers, it is now self-evident that shops accept different credit cards, whilst at the same time PayPal is moving further and further into the retail space. Their competitor in the Far East, Alipay, is already on the rise beyond China. As the market for e-payment solutions develops, biometric methods are very likely to replace passwords, making it difficult to predict whether established service providers will be able to expand their market share, or whether new innovators will emerge and take a slice of the pie.

Be prepared for everything

One thing is certain; digitisation will not be reversed and is here to stay. Financial transactions are definitely affected by this megatrend. Developments such as the Internet of Things (IoT) offer a completely new perspective where every networked device can also be a retail gateway. In this new and connected world, customers want to pay directly and conveniently which will lead to the development of a veritable and comprehensive Internet of Payments. Methods of multi-factor authentication, including those based on biometrics, can help make the online retail environment more secure and eliminate the fears of potential users.

In order not to be overrun by e-payment developments, merchants should rely on the help of a service provider who has future-oriented solutions in place that can be integrated with existing systems so they are well prepared for a fully networked future without the nuisances of passwords.

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Why the future of work hinges on a mutually beneficial employer-employee contract

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Why the future of work hinges on a mutually beneficial employer-employee contract 1

By Stuart Hearn, CEO and founder of Clear Review, the leader in performance management

It feels like there’s been almost continual talk of the new world of work, and what the future of employment will look like, since the first day of lockdown. It’s true that it was a huge upheaval for many organisations that previously had been resistant to all but the most traditional working environments – nine to five, in a fixed office, with company-issued IT.

That said, the pandemic and its restrictions did not actually introduce a new way of working; they merely accelerated it, on a scale and at a pace no one could have foreseen.

So, in many ways it is less that there has been a change, and more that the change has happened so quickly. Had it continued gradually, then we would have seen more businesses, and managers, adapt slowly to the concept of remote teams as the norm, with all that it entails.

As it is, many leaders have been left with having to recalibrate their approach to feedback and management, while still dealing with the spectre of the pandemic and its threat to business continuity. In the early months, it was perhaps acceptable to allow certain elements of management, such as employee appraisals, to slip. Now, as what was once new becomes normal, this has to be addressed. Why? Because at a time when revenue streams are crumbling, engaged employees are critical in delivering results – one study found that ​“high­ly engaged teams show 21% greater prof­itabil­i­ty”.

Managing changing realities

Employers are therefore having to balance keeping employees engaged with a number of realities which are rapidly changing what we thought the future of work would be.

Firstly, there is remote working. Rolling lockdowns and local restrictions are going to be a short-term constant. Some employees have embraced it; others will feel more removed and under greater stress. It will be up to leaders to identify and address these polar opposites within their own teams.

Secondly, employers need to realise the impact technology, and in particular artificial intelligence, is going to have. Those businesses that were more digitally mature fared better in the early stages of lockdown; as everyone races to complete their own digitisation, employees are going to be faced with a continuous cycle of change. What’s more, while the process of transformation has never been this fast, it will also never be this slow again. That is a bewildering concept, and one that managers need to factor in when handling employees.

It all points to one undeniable – that the employer-employee contract is irrevocably changing.

A new employer-employee contract

What do we mean by the employer-employee contract? This is not the terms of employment; rather it is the mutual understanding that the employee will perform tasks as designated by the employer, at a set place, for a set amount of time, in return for renumeration and adequate support. The support might be the right equipment; it could, and should, include development, whether that’s with formal and informal training, progression plans or ongoing review programmes.

That all worked fine when everyone was in the same office, at the same time, every day. Now that isn’t the case, the old ways of managing, of supporting employees and of helping them develop don’t work. Added to this is the rapid pace of change previously covered and it is quite simple – using what worked in the past will not work in the future.

What employers, and more specifically managers and leaders, need to do is actively change the way they support their teams. The informal chats in the kitchen or between meetings no longer exist, so the monthly one-to-ones are suddenly too far apart to get a true sense of how employees are doing, both in terms of their performance and how they are feeling.

Time to change focus

As part of this, there needs to be a change in the focus, away from what employees are doing and towards what they are producing – so from inputs (such as being ‘in work’ at a certain time and for a set number of hours) to outputs. It is a shift towards a more continuous cycle of review and feedback, and it is two way – rather than having a set meeting, both employer and employee are sharing outputs, progress and feedback constantly. In doing so, employees can start to be measured on how they are contributing to the performance of the business, and their training and development tailored accordingly.

As the way we work has changed, so our relationship with work, in the form of the employer-employee contract, is changing too. As businesses set themselves up for an uncertain future, they need to reassess and realign how their employees are working, and tailor the way workforces are managed and supported accordingly. It is the only way employers will be able to retain and develop their teams to handle whatever comes next.

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What is the Job Support Scheme, and how does it work?

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What is the Job Support Scheme, and how does it work? 2

By Kate Palmer, HR Advice and Consultancy Director at Peninsula

On 24 September 2020, the Chancellor, Rishi Sunak, announced that after the Job Retention Scheme (JRS) ends on 31 October, employers will be able to benefit from the new Job Support Scheme (JSS). The new scheme will be available for employers from 1 November 2020 regardless of whether they have made use of the Job Retention Scheme or not and will be in place until 30 April 2021.

Under the Job Support Scheme, with further clarification having been released on 22 October 2020, the Government will be able to help employers who are suffering from business downturn as a result of coronavirus restrictions or who have been told to close completely. It is separated into two provisions: JSS (Open) and JSS (Closed).

To access the JSS (Open), employees must work for at least 20% of their regular working hours – in ‘viable’ jobs – with employers covering the wages for those worked hours. For hours not worked, employers will be asked to contribute 5% of employees’ wages while the Government will contribute 61.67% of wages (for hours employees do not work), to a monetary cap of £1,541.75 per month per employee. The scheme will be open to small and medium-sized firms across the UK. However, for large businesses to qualify for the JSS (Open), they will have to meet a financial assessment test to show that their turnover is lower due to experiencing difficulties from coronavirus.

On 9 October 2020, the Chancellor first announced the expansion to the original JSS which is now being referred to as JSS (Closed). From 1 November 2020, all businesses across the UK who are required to close as part of local/national lockdown will receive wage assistance through JSS (Closed) for employees who do not work for a minimum of seven calendar days. A financial assessment for large businesses will, however, not apply. The expansion is being rolled out to run until 30 April 2021 with the Government paying two-thirds of each employee’s salary, up to a maximum of £2,083.33 a month per employee. Employers will not be required to contribute towards staff wages but will have to cover National Insurance Contributions and pension contributions.

For an employee to be entered into either of the two versions of the JSS, they must have been on the employer’s PAYE payroll between 6 April 2019 and 23:59 on 23 September 2020. Which means that a Real Time Information (RTI) submission notifying payment to the employee to HMRC must have been made at some point from 6 April 2019 up to 23:59 on 23 September 2020. The guidance confirms that JSS grants will be paid in arrears to reimburse the employer for the Government’s contribution. Claims can only be submitted in respect of a wage cost actually incurred in any given pay period after payment to the employee has been made, and that payment has been reported to HMRC via an RTI submission.

Claims can be made online from 8 December 2020, and reimbursement will be made every month.

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B2B plays a big role in our economy, but how can it contribute to our recovery?

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B2B plays a big role in our economy, but how can it contribute to our recovery? 3

By Richard Parsons from True, creative B2B marketing agency, discusses the current state of marketing and looks ahead to what the future might bring. 

The average consumer will likely be unaware that more than half of the companies listed on the FTSE 350 operate purely in B2B transactions. Not only that, but 50% of our economy is generated by B2B transactions and 82% of companies derive some or all of their income from B2B. There is also a global B2B trade surplus, unlike in B2C. The significant conAltribution of B2B is routinely missed but could hold the key to economic recovery.

The famous essay “I, Pencil” by Leonard E. Read, founder of the Foundation for Economic Education, lays out the different skills, materials and jobs utilised in the production of a pencil. An inexhaustive list includes cedarwood from Oregon, logs from California, graphite from Ceylon and clay from Mississippi. The list was so comprehensive that Read even named the lighthouse keeper signalling the ship in and the factory worker sweeping the floor as part of the employment dependant on the pencil.

B2C might dominate brand awareness for obvious reasons, but what is less obvious is it’s inescapable foundations in B2B. These companies play a vital role in our ongoing economic recovery and – drawing on lessons learned during previous economic challenges – here are some of the trends that we expect to play out over the coming months and into 2021.

Below the Line to Above the Line

Even in normal times, businesses tend to place a skewed emphasis on lead generation and brand conversion when they should be focusing on the top of the funnel. Typically, 90% of marketing spend is allocated to short-term lead generation, which translates as telemarketing and mailshots. This balance should be much closer to 50%, with the remaining 50% spent on building brand equity. A shift from Below the Line to Above the Line is essential if brands want to recover well.

Lead-generation tactics do have a role to play. Still, the B2B industry can be guilty of neglecting emotional marketing in favour of rational campaigns, and here they lose their power to attract new interest. The B2B Brand Index Study – the most extensive global study of its kind – established that creative campaigns are 12 times more efficient at delivering business success.

While there are clear differences, B2B and B2C also share certain similarities. For instance, brand awareness among a target audience will always be a fundamental part of securing revenue. A B2B decision-maker will not be as impulsive as a consumer, for example, choosing Coke or Pepsi, but it is still vital that your brand is well known.

This brings us to the Rule of Three – a well-documented concept of brand market share and consumer decision making in a developed market. When looking for the answer to a problem, a prospective customer will have around three known brands that could solve the issue immediately spring to mind as a result of exposure to memorable campaigns and sustained awareness building. Further research will often expand this pool of options to around ten brands, but when it comes to the crunch, one of the original three will win the purchase between 70-90% of the time.

Value for Money

Marketing budgets have been understandably pared back this year. In an April 2020 survey, 90% of respondents said their budgets were delayed or under review. The full economic impact of the COVID-19 is not yet clear, but we are a long way from normal market confidence, and many businesses are increasingly cautious when it comes to allocating marketing spend.

We know that this approach is wrong. According to System1, advertising ability to connect with people remains as strong as before, and media consumption has risen during lockdown. The CPM of Facebook advertising has gone from $1.88 in November 2019 to $0.81 in March 2020. In short, the ROI for marketing spend is better now than before and so those who can spend, should.

Event Budgets

The events industry has clearly been badly hit, with months of planning, investment and time redundant. But seminars can become webinars and conferences can become virtual, and while this is small consolation for a devasted industry, virtual versions are generally cheaper than in-person events. This will leave a surplus of budget previously earmarked for events which means a reallocation of money to other facets of marketing to stimulate new revenues and a better recovery.

Think Long Term. Hold Your Nerve.

Institute of Practitioners in Advertising case studies show that brands that maintain marketing investment in recessions grow 4.5 times faster than brands that cut spend. Those that cut spend also struggle for longer and take five years to recover revenue. A marketing black-out might alleviate damage to bottom lines in the short term, but it will breed serious problems and long-term profit loss.

Of course, many brands will pursue the short-term fix and cut marketing costs, and this presents an opportunity for those willing to be bold. It might not feel like a wise investment as profits tumble alongside the rest of the sector but maintaining or increasing spend will allow brands to outflank competitors and for smaller brands to increase their share of voice and gain ground on more cautious industry leaders.

What’s Next?

It remains to be seen how short-term marketing cuts will pan out in the mid to long term, but changes are indeed afoot. Crises are catalysts for change and, like any crisis, the current one will have winners and losers. Brands that hold their nerve, innovate and invest in their recovery are likely to see the benefit in the long term. The current economic uncertainty is accompanied by changes in other aspects of the way we live, work and travel. Rather than a threat, it presents an opportunity.

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