By Roy Hilliard, VP of Business Development, NJFX
Recent headlines have put cybersecurity front and center for consumers and companies alike.
But cybersecurity is only part of the security story. The very infrastructure that data traverses can be prone to destruction, area wide isolation, congestion, erratic latency, cuts, and so on, keeping even the most pragmatic administrator up at night. This level of complexity is heightened as you expand globally. Subsea fiber optic cables are critical to financial transactions, including credit, debt financing, funding, investing, procurement and more, and account for US$10 trillion in transactional value each day, according to the U.S. Securities and Exchange Commission.
So how do financial institutions and other business make sure that disruptions do not affect mission critical services? A key for network security resides in operational independence by confirming diversity, resiliency, and redundancy. Global solutions require a new level of interconnectivity. Establishing access to interconnectivity hubs is how institutions will have the ability to safely control, monitor, maintain, and maximize the underlying network. By using these hubs in conjunction with advanced network orchestration, companies can insulate applications from isolation, vulnerability, and interruptions. If there is a hard cut or a fiber optic cable is damaged, traffic can be redirected. If there is congestion or concern of a breach, similar redirection of traffic can be accomplished. In the past, networks were linear and static. It was difficult to turn paths on and off. If a circuit went down, resolution could very easily take days or longer. With advances such as SD WAN and NFV, institutions can react in real time to redirect data traffic if they have deployed an interconnected network framework and corresponding partners. Institutions historically engineered multiple paths but were beholden to what was offered by carriers as to routes and diversity. Much of this holds true today, however in the always on, always available climate, network design must get smarter for both the steady state and when systems are disrupted. Flexibility to control and redirect the network needs to be the new norm. The ability to do so comes back to having access to hubs that can maintain connectivity as well as offer alternate pathways.
Case in point is the New York Stock Exchange. Founded in 1792 with an agreement made under a buttonwood tree on Wall Street, New York was cemented as the financial capital for the U.S. and as connectivity expanded, became one of the most critical exchanges in the world. Today, New York means not just the exchange, but areas throughout Manhattan and northern New Jersey. So much so that data centers and businesses are connected through overlapping routes,many susceptible todamage from flooding, cuts and other disruptions A recent study by researchers at the University of Wisconsin–Madison and the University of Oregon found that thousands of miles of buried fiber optic cable are at risk of drowning under the rising seas. This isn’t something that will happen far in thefuture, but rather could be a realitywithin two decades with New York as one of the most susceptible locations.
To get a glimpse of what this might look like, you only need to look back to Hurricane Sandy in 2012. Millions in the Northeast were without power and many industries and businesses struggled to provide mission critical services. Data centers in the heart of the financial district were among those that faced challenges. The issue is many core network interconnections run through Manhattan. It is a very complicated system with so many parties being involved for so long with legacy setups too entrenched to alter. However, the issue is compounded in that much of the east coast subsea capacity lands beyond NYC, but is also routed into the same complex web, nullifying what is often thought to be redundant solutions.
So much so that diversity and redundancy need to be viewed and acted upon separately to gain operational independence. Without such an audit, a firm can have the false sense of securityderived from choosing different suppliers, but not diverse routes. For example, a redundant system will help if one path goes down. But there may be several carriers in the same ductwork or have crisscrossing typology. Even diligence in this aspect can still be thwarted by chokepoints in the case of large hubs such as New York. Here again, separate suppliers, but the same buildings. Physical, known diversity to and from application hosting platforms creates the infrastructure that is resilient to the cascading effect of a building or area being taken offline. Examples are clear in the case of hurricanes like Maria or Sandy but there are certainly other events, ranging from power outages to terrorist threats.
Furthermore, this operational independence goes beyond a focus on keeping the lights on. Having the ability to keep access to data and properly manage such data is equally critical when faced with the level of scrutiny often required byregulatory requirements, archival restrictions, and privacy. Again, always available and always accessible requires options. The OTT firms have seen this from the start as the user experience is paramount. Granted the builds for these firms were predominantly greenfield designs, but conflicts and overlaps were soon evident with growth. The reaction in that segment has been to take ownership in the physical underlying assets and facilities. Sure, the owner economics is advantageous for the business model, but it may be that the operational clarity that comes from knowing what is behind the network curtain is more valuable.
As I speak with firms across verticals, it becomes more evident that the need for network infrastructureclarity will only continue to grow for not only securing data but maintaining the access to it. Redundancy, diversity and resiliency are the cornerstones for a secure network. They combine to provide the operational independence that firms will require for the many advances in banking, as well as other verticalsas AI, blockchain, 5G, IoT and so many more, usher in even greater solutions and demands.
About the Author:
As Vice President of Business Development, Roy Hilliard is responsible for developing and strengthening partnerships for NJFX in the enterprise, financial, gaming, service provider, and educational verticals. With over 20 years of multinational experience, Roy brings a wealth of networking knowledge, helping clients leverage the latest in technology and embrace innovative ways to addressnetworking and global communications.
Through strategy, product management, and account director roles Roy has been a part of noteworthy career projects including managing network supplier teams serving the top global financial firms as well as the AT&T team that designed, implemented and maintained the network for the Olympic games. Roy has worked on several government network projects and led securing the AT&T India licensing agreement for Tata and in establishing AT&T as a stand-alone operator in India.
He may be contacted at [email protected]
NJFX COMPANY PROFILE:
NJFX owns and operates a 64,800 square foot purpose built Tier3 colocation facility in Wall, NJ, supported by several route-independent carriers who offer direct access to multiple independent subsea cable systems interconnecting North America, Europe, South America, and the Caribbean. High and low-density colocation solutions are available with 24/7 support. NJFX’s low latency offerings provide the flexibility, reliability and security which global carriers, content providers, and enterprise/government entities require to drive revenue, reduce expenses and improve service quality. The facility features 24/7 on-site security and secure loading dock access, as well as CAT-5 hurricane resistant infrastructure and onsite generators with fuel for up to five days of uninterrupted emergency service.
The NJFX facility itself is located at the point where subsea cables from the Domestic US, South America and Europe meet – at the United States’ easternmost edge – offering service providers, enterprises, carrier-neutral operators and cable companies direct interconnection options directly at the cable-head without recurring cross-connect fees. The NJFX facility also provides global connectivity to 200+ countries and territories as well as 99.7% of the world’s GDP by way of Tata Communications’ global subsea fiber network, one of the largest and most advanced in the world. This is a paradigm shift from traditional fiber backhaul to the nearest metro area without consideration of potential bottlenecks found in congested areas such as New York and Northern New Jersey.
Having multiple physical subsea sea cables interconnecting with multiple backhaul fiber providers facilitates the most reliable global network architecture available. Conveniently located within 60 miles of New York City, Philadelphia and New York / New Jersey Financial Exchanges, the NJFX facility is accessible via public transportation, the New Jersey Turnpike and the Garden State Parkway. NJFX broke ground on the facility in 2015, under the leadership of CEO Gil Santaliz. Mr. Santaliz realized that bringing NJFX to the site where cables land, avoiding the congestion of lower Manhattan, would be a great benefit to connectivity. NJFX chose to create a place to interconnect with subsea networks as close to the cable landing site as possible and saw the value in a proper Tier 3, purpose-built facility to drop off traffic. When the facility was designed, executives and architects sat down with backhaul providers. The providers detailed how they entered NJFX, and NJFX in turn made sure the paths were as diverse as possible from each other. The result is a secure location for U.S. fiber backhaul solutions avoiding traditional legacy network points of failure.
Lockdown 2.0 – Here’s how to be the best-looking person in the virtual room
suggests “the product you’re creating is not the camera, the lens or a webcam’s clever industrial design. It’s the subject, you, which is just on e part of the entire image they see. You want that image to convey quality, not convenience.”
Technology experts at Reincubate saw an opportunity in the rise of remote-working video calls and developed the app, Camo, to improve the video quality of our webcam calls. As part of this, they consulted the digital photography expert and author, Jeff Carlson, to reveal how we can look our best online.
It’s clear by now that COVID-19 has normalised remote working, but as part of this the importance of video calls has risen exponentially. While we’re all used to seeing the more casual sides of our colleagues (t-shirt and shorts, anyone?), poor webcam quality is slightly less forgivable.
But how can we improve how we look on video? We consulted Jeff Carlson for some top tips– here is what he had to say.
- Improve the picture quality of your call
The better your camera, the higher quality your webcam calls will be. Most webcams (as well as currently being hard to get hold of and expensive), are subpar. A DSLR setup will give you the best picture, but will cost $1,500+. You can also use your iPhone’s amazing camera as a webcam, using the new app from Reincubate, Camo.
Jeff’s comments “The iPhone’s camera system features dedicated coprocessors for evaluating and adjusting the image in real time. Apple has put a tremendous amount of work into its imaging software as a way to compensate for the necessarily small camera sensors. Although it all works in service of creating stills and video, you get the same benefits when using the iPhone as a webcam.”
Aidan Fitzpatrick, CEO of Reincubate explains why the team created Camo, “Earlier this year our team moved to working remotely, and in video calls everyone looked pretty bad, irrespective of whether they were on built-in Mac webcams or third-party ones. Thus began my journey to build Camo: an iPhone has one of the world’s best cameras in it, so could we make it work as a webcam? Category-leading webcams are noticeably worse than an iPhone 7. This makes sense: six weeks of Apple’s R&D spend tops Logitech’s annual gross revenue.”
- Place your camera at eye level
A video call will never quite be the same as a face-to-face conversation, but bringing your camera up to eye level is a good place to start. That can involve putting your laptop on a stand or pile of books, mounting a webcam to the top of your display screen, or even using a tripod to get the perfect position.
Jeff points out, “If the camera is looking down on you, you’ll appear minimized in the frame; if it’s looking up, you’re inviting people to focus on your chin, neck, or nostrils. Most important, positioning the camera off your eye level is a distraction. Look them in the eye, even if they’re miles or continents away.”
Low camera placement from a MacBook
- Make the most of natural lighting
Be aware of the lighting in the room and move yourself to face natural lighting if you can. Positioning the camera so any natural light is behind you takes the light away from your face, which can make it harder to see and read expressions on a call.
Jeff Carlson’s top tip: “If the light from outside is too harsh, diffuse it and create softer shadows by tacking up a white sheet or a stand-alone diffuser over the window.”
Backlit against a window Facing natural light
- Use supplementary lighting like ring lights
The downside to natural lighting is that you’re at the mercy of the elements: if it’s too bright you’ll have the sun in your eyes, if it’s too dark you won’t be well lit.
Jeff recommends adding supplementary lighting if you’re looking to really enhance your video calls. After all, it looks like remote working will be carrying on for quite some time.
“The light can be just as easy as a household or inexpensive work light. Angle the light so it’s bouncing off a wall or the ceiling, depending on your work area, which, again, diffuses the light and makes it more flattering.
Or, for a little money, use a softbox or a shoot-through umbrella with daylight bulbs (5500K temperature), or if space is tight, LED panels. Larger lights are better for distributing illumination– don’t be afraid to get them in close to you. Placement depends on the look you’re going after; start by positioning one at a 45-degree angle in front and to the side of you, which lights most of your face while retaining nice shadow detail.”
In some cases, a ring light may work best. LEDs are arranged in a circle, with space in the middle to put the camera’s lens and get direct illumination from the direction of the camera.
- Centre yourself in the frame
Make sure you’re getting the right angle and that you’re using the frame effectively.
“You should aim for people to see your head and part of your torso, not all the space between your hair and the ceiling. Leave a little space above your head so it’s not cut off, but not enough that someone’s eyes are going to drift there.”
- Be mindful of your backdrop
It’s not always easy to get the quiet space needed for video calls when working from home, but try as best you can to remove anything too distracting from your background.
“Get rid of clutter or anything that’s distracting or unprofessional, because you can bet that will be the second thing the viewers notice after they see you. (The Twitter account @RateMySkypeRoom is an amusing ongoing commentary on the environments people on television are connecting from.)”
A busy background as seen by a webcam
- Make the most of virtual backgrounds
If you’re really struggling with finding a background that looks professional, try using a virtual background.
Jeff suggests: “Some apps can identify your presence in the scene and create a live mask that enables you to use an entirely different image to cover the background. While it’s a fun feature, the quality of the masking is still rudimentary, even with a green screen background that makes this sort of keying more accurate.”
- Be aware of your audio settings
Our laptop webcams, cameras, and mobile phones all include microphones, but if it’s at all possible, use a separate microphone instead.
“That can be an inexpensive lavalier mic, a USB microphone, or a set of iPhone earbuds. You can also get wireless lavalier models if you’re moving around during a call, such as presenting at a whiteboard in the camera’s field of view.
The idea is to get the microphone closer to your mouth so it’s recording what you say, not other sounds or echoes in the room. If you type during meetings, mount the mic on an arm instead of resting it on the same surface as your keyboard.”
- Be wary of video app add-ons
Video apps like Zoom include a ‘Touch up your appearance’ option in the Video settings. This applies a skin-smoothing filter to your face, but more often than not, the end result looks artificially blurry instead of smooth.
“Zoom also includes settings for suppressing persistent and intermittent background noise, and echo cancellation. They’re all set to Auto by default, but you can choose how aggressive or not the feature is.”
- Be the best looking person in the virtual room
What’s important to remember about video calls at this point in time is that most people are new to what is, really, personal broadcasting. That means you can easily get an edge, just by adopting a few suggestions in this article. When your video and audio quality improves, people will take notice.
Bringing finance into the 21st Century – How COVID and collaboration are catalysing digital transformation
By Keith Phillips, CEO of TISATech
If just six or seven months ago someone had told you that in a matter of weeks people around the world would be locked down in their homes, trying to navigate modern work systems from a prehistoric laptop, bickering with family over who’s hogging the Wi-Fi, migrating online to manage all financial services digitally, all while washing their hands every five minutes in fear of a global pandemic… You’d think they had lost their mind. But this very quickly became the reality for huge swathes of the world and we’re about to go through that all over again as the UK government has asked that those who can work from home should.
Unsurprisingly, statistics show that lockdown restrictions introduced by the UK government in March, led to a sharp increase in people adopting digital services. Banks encouraged its customers to log onto online banking, as they limited (and eventually halted) services at branches. This forced many customers online as their primary means of managing personal finances for the first time.
If anyone had doubts before, the Covid-19 pandemic proved to us the importance of well-functioning, effective digital financial services platforms, for both financial institutions and the people using them.
But with this sudden mass online migration, it’s become clear that traditional banks have struggled to keep up with servicing clients virtually. Legacy banking systems have always stilted the digitisation of financial services, but the pandemic thrust this issue into the limelight. Fintech firms, which focus intently on digital and mobile services, knew it was only a matter of time before financial institutions’ reliance was to increase at an unprecedented rate.
For years, fintechs have been called upon by traditional players to find solutions to problems borne from those clunky legacy systems, like manual completion of account changes and money transfers. Now it is the demand for these services to be online coupled with the need for financial services firms to cut costs, since Covid-19 hit the economy.
Covid-19 has catalysed the urgent need to bring digital transformation to a wider pool of financial services businesses. Customers now have even higher expectations of larger institutions, demanding that they keep up with what the younger and more nimble challengers have to offer. Industry leaders realise that they must transform their businesses as soon as possible, by streamlining and digitising operations to compete and, ultimately, improve services for their customers.
The race for digital acceleration began far before the recent pandemic – in fact, following the 2008 financial crisis is likely more accurate. Since the credit crunch, there has been a wave of new fintech firms, full of young, bright techies looking to be the next big thing. Fintechs have marketed themselves hard at big conferences and expos or by hosting ‘hackathons’, trying to prove themselves as the fastest, most innovative or the most vital to the future of the industry.
However, even during this period where accelerating innovation in online financial services and legacy systems is crucial, the conditions brought about by the pandemic have not been conducive to this much-needed transformation.
The second issue, which again was clear far before the pandemic, is that fact that no matter how nimble or clever the fintechs’ solutions are, it is still hard to implement the solutions seamlessly, as the sector is highly fragmented with banks using extremely outdated systems populated with vast amounts of data.
With the significance of the pandemic becoming more and more clear, and the need for better digital products and services becoming more crucial to financial services firms and consumers by the day, the industry has finally come together to provide a solution.
The TISAtech project was launched last month by The Investing and Saving Alliance (TISA), a membership organisation in the UK with more than 200 leading financial institutions as members. TISA asked The Disruption House, a specialist benchmarking and data analytics business, to create a clearing house platform for the industry to help it more effectively integrate new financial technology. The project aims to enhance products and services while reducing friction and ultimately lowering costs which are passed on to the customers.
With nearly 4,000 fintechs from around the world participating, it will be the world’s largest marketplace dedicated to Open Finance, Savings, and Investment.
Not only will it provide a ‘matchmaking’ service between financial institutions an fintechs, it will also host a sandbox environment. Financial institutions can pose real problems with real data and the fintechs are given the space to race to the bottom – to find the most constructive, cost-effective solution.
Yes, there are other marketplaces, but they all seem to struggle to achieve a return on investment. There is a genuine need for the ‘Trivago’ of financial technology – a one stop shop, run by an independent body, which can do more than just matchmaking. It needs to go above and beyond to encompass the sandboxing, assessments, profiling of fintechs to separate the wheat from the chaff, and provide a space for true collaboration.
The pandemic has taught us that we are more effective if we work together. We need mass support and collaboration to find solutions to problems. Businesses and industries are no different. If fintechs and financial institutions can work together, there is a real chance that we can start to lessen the economic hit for many businesses and consumers by lowering costs and streamlining better services and products. And even if it is just making it that little bit easier to manage personal finances from home when fighting with your children for the Wi-Fi, we are making a difference.
What to Know Before You Expand Across Borders
By Sean King, Director of International Tax at McGuire Sponsel
The American retail giant, Target Corporation, has a market cap of $64 billion and access to seemingly limitless resources and advisors. So, when the company engaged in its first global expansion, how could anything possibly go wrong?
Less than two years after opening its first Canadian store in 2013, Target shut down all133 Canadian locations and terminated more than 17,000 Canadian employees.
Expansion of an operation to another country can create unique challenges that may impact the financial viability of the entire enterprise. If Target Corporation can colossally fail in its expansion to Canada, how might Mom ‘N’ Pop LLC fare when expanding into Switzerland, Singapore, or Australia?
Successful global expansion requires an understanding of multilayered taxes, regulatory hurdles, employment laws, and cultural nuances. Fortunately, with the right guidance, global expansion can be both possible and profitable for businesses of any size.
Any company with global ambitions must first consider whether the company’s expansion outside of the U.S. will give rise to a taxable presence in the local country. In the cross-border context, a “permanent establishment” can be created in a local country when the enterprise reaches a certain level of activity, which is problematic because it exposes the U.S. multinational to taxation in the foreign country.
Foreign entity incorporation
To avoid permanent establishment risk, many U.S. multinationals choose to operate overseas through a formal corporate subsidiary, which reduces the company’s foreign income tax exposure, though it may result in an additional level of foreign income tax on the subsidiary’s earnings. In most jurisdictions, multinationals can operate their business in the foreign country as a branch, a pass through (e.g., partnership,) or a corporation.
As a branch, the U.S. multinational does not create a subsidiary in the foreign country. It holds assets, employees, and bank accounts under its own name. With a pass through, the U.S. multinational creates a separate entity in the foreign country that is treated as a partnership under the tax law of the foreign country but not necessarily as a partnership under U.S. tax law.
U.S. multinationals can also create corporate subsidiaries in the foreign country treated as corporations under the tax law of both the foreign country and the U.S., with possibly two levels of income taxation in the foreign country plus U.S. income taxation of earnings repatriated to the U.S. as dividends.
Under U.S. entity classification rules, certain types of entities can “check the box” to elect their classification to be taxed as a corporation with two levels of tax, a partnership with pass-through taxation, or even be disregarded for U.S. federal income tax purposes. The check the box election allows U.S. multinationals to engage in more effective global tax planning.
Toll charges, transfer pricing and treaties
When establishing a foreign corporate subsidiary, the U.S. multinational will likely need to transfer certain assets to the new entity to make it fully operational. However, in many cases, the U.S. multinational cannot perform the transfer without recognizing taxable income. In the international context, the IRS imposes certain outbound “toll charges” on the transfer of appreciated property to a foreign entity, which are usually provided for in IRC Section 367 and subject to various exceptions and nuances.
Instead, the U.S. multinational may prefer to license intellectual property to the foreign subsidiary for a fee rather than transfer the property outright. However, licensing requires the company and foreign subsidiary to adhere to transfer pricing rules, as dictated by IRC Section 482. The U.S. multinational and the foreign subsidiary must interact in an arms-length manner regarding pricing and economic terms. Furthermore, any such arrangement may attract withholding taxes when royalties are paid across a border.
Are you GILTI?
Certain U.S. multinationals opt to focus on deferring the income recognition at the U.S. level. In doing so, they simply leave overseas profits overseas and delay repatriating any of the earnings to the U.S.
Despite the general merits of this form of planning, U.S. multinationals will be subject to certain IRS anti-deferral mechanisms, commonly known as “Subpart F” and GILTI. Essentially, U.S. shareholders of certain foreign corporations are forced to recognize their pro rata share of certain types of income generated by these foreign entities at the time the income is earned instead of waiting until the foreign entity formally repatriates the income to the U.S.
The end goal
Essentially, all effective international tax planning boils down to treasury management. Effective and early tax planning can properly allow a company to better achieve its initial goal: profitability.
If global expansion is on the horizon for your company, consult a licensed professional for advice concerning your specific situation.
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