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But as the digital payments ecosystem continues to expand, it is becoming increasingly apparent that ‘payment tokenization’ solutions, such as network tokenization, can address the urgent need for increased security and reduced complexity, while promoting enhanced consumer experiences. Here Andre Stoorvogel, Director of Product Marketing at Rambus Payments, explains for Finance Monthly.

A short history of tokenization in the payments industry

Tokenization solutions can be broadly divided into two categories: security tokenization and payment tokenization.

Security tokenization (also known as acquirer tokenization or non-payment tokenization) approaches have traditionally been used to protect cardholder data and personally identifiable information (PII) stored in merchant databases. This is needed to enable popular consumer payment methods such as recurring billing and one-click ordering.

In comparison, PCI tokens are security tokens that comply with PCI guidelines to meet PCI DSS standards.

The publication of EMVCo’s EMV Payment Tokenization Specification – Technical Framework in 2014 marked the introduction of ‘payment tokenization’ to the ecosystem, and was followed by an update in 2017. The aim? To enhance the underlying security of digital payments by replacing primary account numbers (PANs) with unique EMV payment tokens. Network tokenization is a type of payment tokenization where the payment network plays the role of the token service provider (TSP) to generate tokens.

Although EMV payment tokenization found immediate success in securing in-store mobile contactless payments, Consult Hyperion predicts that it is online payments that will deliver ‘the real volume’. The question is, what differentiates network tokenization from security tokenization?

Delivering end-to-end security 

Proprietary security tokens are designed to protect sensitive information when it is ‘at rest’ within a merchant’s database after a transaction has been completed, reducing the risk and impact of a data breach.

The problem is, sensitive data is vulnerable throughout the entire payment processing chain. Not just at rest.

Neither proprietary or PCI tokens protect the consumer data while in transit or in use, introducing opportunities for fraudsters to hijack data through phishing attacks, malware and more. The rapid growth in card-not-present (CNP) fraud, despite ever-increasing investment in fraud protection, demonstrates a more fundamental, holistic approach to payment security is needed.

Below are three ways in which network tokenization can help meet those needs:

1. Securing data in transit

The main benefit of network tokenization is that card details are protected throughout the entire transaction lifecycle.

2. Domain controls

Network tokens can be restricted in their usage, for example, to a specific device, merchant, transaction type or channel. With the proliferation of new payment methods, such as online, IoT and voice, the ability to limit and control how network tokens can be used is key to preventing cross-channel fraud.

3. Reducing false declines

Since network tokenization protects card details throughout the entire transition lifecycle, issuers treat network tokenized payments as inherently more secure than non-network tokens. This can deliver numerous benefits downstream and address key pain points for merchants, by limiting fraud prevention spend, increasing approval rates and reducing false declines.

This trio of benefits are not the beginning, middle and end, however… there’s more.

4. Bridging the interoperability gap

As well as escalating security challenges, merchants must also deal with spiralling complexity.

Security tokens are limited to specific relationships, such as between a single acquirer and merchant. As the digital payments ecosystem expands, the burden of managing different proprietary tokens from multiple acquirers, payment service providers (PSPs) and gateways will become increasingly challenging.

The good news is that network tokens are globally interoperable across multiple acquirers and gateways. With the growth of omnichannel retail, consistency across different acceptance environments is a significant value-add.

We must also consider the backend impact. Security tokens are not formatted as routable PANs, so cannot be accepted as a like-for-like ‘replacement’. Network tokens are in the same format as a regular PAN, so can be accepted and routed along the normal payment rails without impacting the existing merchant systems.

5. Enabling value-added services

Hampered innovation is one of the hidden costs of fraud. Merchants want to spend their time, effort and resource on better consumer experiences, not tackling fraud.

It is true that security tokens can be effective in specific scenarios. Network tokenization offers more than just security, however, and can also be utilized to enhance the buying experience.

Digital card art to increase brand recognition, the ability to instantly refresh card details, push provisioning to enable consumers to keep track of where and when their payment credentials are being used. All these features complement the security proposition to increase convenience and reduce friction.

Network tokenization versus security tokenization?

Although often referenced interchangeably, it is apparent that security tokenization and payment tokenization solutions (such as network tokenization) are very different propositions. Both are effective solutions for their defined purposes, but we should look to network tokenization as a foundational technology enabling secure, simple digital commerce through end-to-end security, global interoperability across different acceptance environments and value-added services.

If it was possible to rewind back to 1999, we’d all invest in Apple stock instead of that VHS Recorder. In a new study by SmallBusinessPrices.co.uk, we analyse the priciest stocks of 2019 and what you could have bought with $100 over the decade.

Amazon is the most expensive stock, with the average stock price calculating to a whopping $1,752 - meaning $100 couldn’t buy you any stock, whilst in the year 2000 you’d be able to afford just two.

As one of the top e-commerce platforms in the world, Amazon gets more than 197 million visitors each month, and in 2018 the company’s share of the US e-commerce market hit 49%.

Based on the average stock price of Apple in 2000, $100 could have bought you around 35 stocks, whilst this same value wouldn’t buy a single stock based on 2019’s average stock price.

Steve Job’s innovative and visionary approach led to Apple becoming one of the biggest tech giants in the world. The launch of the iPod revolutionised the portable media player market, eventually launching iTunes which essentially changed the world’s understanding of digital media and the music industry.

Who’s worth more?

Microsoft top the leaderboard this 2019, with the company’s net worth being valued at $1 trillion - one of the only three companies to pass this figure, with Apple and Amazon being the other two in recent years.

Amazon takes second place for net worth, being worth around $928.5 billion, whilst Apple follows behind on $892.1 billion.

Despite Apple taking third place for net worth, the brand still remains champion for yearly revenue. In 2018, the giant made over $265.6 million - higher than both Amazon and Microsoft who made $232.9 and $110.4 million respectively.

What are unicorns? 

A unicorn business is a startup with a valuation of $1 billion, they are privately held and rely on venture capital. The name ‘unicorn’ comes from the rarity of businesses gaining such success.

Which sector is taking the lead?

Despite unicorn companies being private and not being publicly traded, if you’re hot on investment and want to keep an eye on which sectors seem to tip the edge, we’ve taken a look at the sectors which are most likely to become unicorns.

With over 360 companies being valued at $1 billion this year, the e-commerce sector took the lead, with 42 companies being declared as unicorns. This was closely followed by Fintech, which saw 39 companies join the leaderboard, whilst Internet Software & Services took third place with 32 companies.

Ian Wright from SmallBusinessPrices.co.uk stated: “Unfortunately we can’t go back in time and invest that $100 we spent on junk, in Apple or Amazon! However, this research reveals just how quickly some of these brands have grown in the last few years, and how privately held start-up companies are also experiencing huge valuations from investors taking big risks to be successful.”

Investments of the 2000s

To see how much $100 could have bought you in the 2000s, or find out more about unicorn start-ups in more detail, you can take a look at SmallBusinessPrices.co.uk’s tool here.

A good credit score provides you with so many benefits, such as reasonable interest rates, faster loan approvals, and suitable insurance policies. Nearly 70 million Americans are suffering from bad credit because repairing your credit requires a lot of time and self-control. So, what is the best way to improve your credit score in no time? The answer is simple – buy a tradeline.

But, in order to understand how to improve your credit score by using a tradeline, you need to understand the term “tradeline” first.

What are tradelines?

A tradeline is basically any account appearing on your credit report. A tradeline keeps a record of creditor’s information to calculate his credit report. You can mutually benefit from someone with positive credit history and improve your credit score if he adds you as an authorized user (AU).

Most people ask their family and friends to add them as their AU, but if you want a quick improvement to your credit score, you can add users with exceptional credit history as an authorized user. These AU provide positive data regarding:

Fair Isaac Corporation (FICO) places a credit score in 5 different grades.

Buying 2-3 seasoned tradeline can help you jump to a 720-850 credit score in a month.

What will a tradeline help you achieve?

A tradeline helps you improve your credit score so it will reap all the benefits a good credit score enables you to achieve. Without a good credit score, you will have limited access and services of your credit card, loan plan, and a higher rate of mortgages. In short, you will have to end up paying more money than usual.

But good tradelines on your account will help you achieve a credit score of 750 or higher in no time. When you buy an authorized tradeline from someone like Personal Tradelines, you are added as an AU to one of their credit card accounts, and it takes only 25-30 days to get your credit up to a good score.

Common mistakes people make when buying Tradelines

·         Having no idea of how tradelines work

The most common mistake people do is buy a tradeline without having the slightest idea of how it works. I recommend that you read all about tradelines and their types before actually committing to buying one. You can also get help and information from tradelines vendors.

·         Buying tradelines in hopes that it will unfreeze their accounts

Tradelines work by adding positive information to your account. If you have fraud alerts or credit freezes on your account, buying a tradeline will not work as new information can’t be posted on your credit report.

·         Understanding the age factor of tradelines

The effectiveness of a tradeline is always going to be relative to how old your own account is and what is in your credit file. For example, if you have a 10-year-old account, an 8-year-old tradeline would not have much impact on it. However, if the account is only 1-2 years old, an 8-year-old tradeline would do wonders in increasing your credit score.

·         Not having an idea of how credit score works

Before buying tradelines, it is vital to know how a credit score impacts your general lifestyle. Because even if you are successful at getting a good credit score after buying tradelines; you will have to follow a particular set of rules to maintain it.

·         Going cheap

Some people go for 4-5 cheap tradelines instead of buying 2-3 seasoned tradelines. It ends up costing you more money, and you are better off buying seasoned or authorized tradelines rather than a lot of cheap tradelines.

Also, a cheap tradeline will not have that much positive effect on your credit report as they don’t have good age. This works against the goal of improving your credit score exponentially.

·         Buying tradelines for shady companies

Unfortunately, there are a lot of companies that are selling tradelines, and it is tough to trust someone random. It is essential to do a background check on a company which includes customer reviews, their ratings, and some money-back guarantee to make that you are getting the best service possible.

The shared service approach provides a centre of excellence within large businesses, but according to Andrew Hayden, Senior Product Marketing Manager at Winshuttle, the challenge finance organisations often face is how to successfully transition separate business units’ processes and data into one single set of systems, and it can be an onerous process which, unless handled correctly, could result in less efficiency, not more.

The shared services model can help corporate finance teams meet their efficiency targets but avoiding the inefficiency trap caused by moving and transforming financial data into one place is essential if the business is going to meet strict efficiency targets.

Beyond ‘lift and shift’

When an organisation decides to move to a centralised shared service approach, the first step is usually to pull existing financial processes out of the hands of disparate accounting functions and business subsidiaries and pass them all into the new central function. Adopting this new structure typically means one team now handles all financial transactions, but they are still using a variety of systems – from spreadsheets and homegrown software to individual accounting platforms.

Implementing shared services requires a high degree of change within the business, and so it makes sense to maximise the benefits of doing so. This can only really be achieved when the actual financial processes themselves are streamlined to one central financial platform, quite commonly SAP.

A significant part of this system consolidation is the movement of data from A to B. Moving huge volumes of data manually is slow and time-consuming, and one approach that some shared service centres are adopting to significantly speed up operations is robotic process automation (RPA).

RPA in action

Here, we look at how SAP-specific RPA software solutions helped organisations including Vodafone, Anglo-American, and Novacon successfully streamline data in their shared financial services environments.

Vodafone decreases transaction processing time

At Vodafone, the shared financial services centre now handles the bulk of the organisation’s financial management, processes and transactions including fixed assets, Purchase to Pay, Record to Report and General Ledger.

Handling considerable volumes of assets within one SAP database proved challenging in this dynamic and frequently changing environment. In one area of the business, Vodafone had nine million assets and 100 thousand postings per month, which would typically take six months to process.

The task of doing so included using five different SAP screens and two different transactions, so a 100-line item record would take up to 60 minutes to process manually. To drive shared services efficiency, Vodafone used an SAP-specific RPA solution. It automatically posts data to SAP via Vodafone Excel workbooks, eliminating data entry through the SAP GUI and reducing the processing time to 15 minutes.

“The system works very well for us,” says Peter Barta, Asset and Project Accounting Team Leader, Vodafone, adding “our complicated processes are handled in fewer steps, which reduces time spent on complex postings and allows us to avoid any internal IT debt.”

Anglo-American increase efficiency savings by 80%

Anglo-American needed to implement a global shared services project to optimise business processes through common procedures. This required thousands of entries that needed to be manually processed on a daily, weekly and monthly basis. This repetitive and time-consuming task needed an effective solution without increasing resource capacity.

By choosing an SAP-specific RPA solution, Anglo-American was able to overcome these challenges without needing to employ specialists to transfer volumes of data. Procedures that would normally take a week now take only a day to process, increasing efficiency savings by 80%.

Novacon prevents data entry errors before they happen

Novacon, a lean management data company, faced challenges with data and process accuracy when working with a large shared service centre. Using an SAP-specific RPA solution it validated data entry against all business and SAP rules, preventing errors before they happen with a rate of 99+% accuracy in SAP. This also enabled a shorter development time of two months and at a lower cost compared to generic RPA technology.

Without doubt, shared services centres offer significant potential for finance to become more efficient, but it must be approached correctly, especially when it comes to the transference of data. Otherwise the organisation could find itself stuck in the inefficiency trap.

 

According to Gartner, there will be more than 20 billion IoT devices by 2020 and as many as 75 billion connected IoT devices by 2025. Unfortunately, the safety and integrity of these devices are still widely ignored, and there are more and more cases of them of being hacked and used as part of a botnet.

“Things that were once the plot for a science fiction movie, such as household appliances being hacked and turned against humanity, now became a reality. IoT hacking can be extremely effective, producing DDoS attacks that can cripple our infrastructure, systems, and way of life,“ says Daniel Markuson, the digital privacy expert at NordVPN. “If you have multiple devices connected to the same network in your home or office, and a hacker gets access to one device, they could break into all of them.”

According to NordVPN’s digital privacy expert, even though it’s hard to believe that a baby monitor or a seemingly simple toy can do significant harm, it’s no longer only computers or smartphones that are at risk of cyberattacks. Take a look at these crazy examples of IoT hacking and vulnerabilities recorded in history:

A thermometer in a lobby aquarium

It always seems that casinos are some of the most secure organizations in the world, but they can be hacked as well. A few years ago, a group of hackers used a rather unconventional method to break into a casino. They managed to access its network via an internet-connected thermometer in an aquarium and extract its high-roller database with all sensitive details.

Parents nightmare: hacked baby monitor

Baby monitors started as simple one-way radio transmitters and evolved into sophisticated Wi-Fi-enabled smart devices with cameras, infrared vision, and other features. However, as everything IoT, those devices can be hacked as well. Late last year, a family from the US experienced a real nightmare. A hacker got into the wireless camera system used to keep an eye on the baby and threatened to kidnap him. This case is not an exception. There are several reported incidents of strangers' voices being heard over baby monitors.

Hackable sex toys

Last year, researchers from a tech firm SEC Consult announced that the private sex life of at least 50,000 users had been exposed by a sex toy ‘Vibratissimo Panty Buster.’ Multiple vulnerabilities put at risk not only the privacy and data but also the physical safety of the owners. All customers’ data was accessible via the internet in such a way that explicit images, chat logs, sexual orientation, email addresses, and passwords were visible in clear text. But it’s not the worst part. The ‘Panty Buster’ toys could be hacked to remotely inflict sexual pleasure on victims without their consent.

A spy in your own home

Earlier this year, CNN managed to access a variety of camera feeds using a search engine for IoT devices Shodan. One of the feeds showed a family in Australia and its daily routine, while other cameras captured a man in Moscow preparing his bed and a woman in Japan feeding her cat. All of them seemed unaware of the fact they could be watched through a camera in their own room. According to CNN, none of the cameras had had security checks and were open to anyone who knew the right address.

Insecure home thermostats

In 2016, hackers left the residents of two apartment buildings in Lappeenranta, Finland in freezing cold for nearly a week by launching a DDoS attack on their environmental control systems via thermostats. Because both the central heating and hot water systems were attacked, the environmental systems were rebooted in their attempt to fight off the attack and got stuck in an endless loop.

Hackable medical devices

In 2017, the US Food and Drug Administration (FDA) confirmed that St. Jude Medical’s implantable cardiac devices could be easily hacked. Such devices are usually used to monitor patients’ heart functions and control heart attacks. However, due to transmitter vulnerabilities, hackers could control shocks, administer incorrect pacing, and deplete the battery. And it’s not the only time when the FDA issued similar warnings. Earlier this year a new alert was issued on the security of Medtronic insulin pumps,  which hackers could remotely access and control.

The spying doll Cayla

In 2017, Germany banned an interactive doll ‘My Friend Cayla’ because it contains a “concealed surveillance device.” According to the researchers, hackers can use an insecure Bluetooth device installed in the toy to listen and talk while a child is playing with it. This interactive doll opens ways for hackers to use its cameras and microphones to see and hear whatever Cayla does. The Cayla companion app also encourages children to share their parents’ names, what schools they go to, and where they live.

Backseat driver of your jeep

Back in 2015, a team of researchers was able to take total control of a Jeep SUV.  By exploiting a firmware update vulnerability, they hijacked the vehicle and made it speed up, slow down, and veer off the road - almost a scene from Fast and Furious. Luckily, this time, it was a team of researchers and not a real hacker. Four years later, we are still dreaming about autonomous cars and but many of the previous vulnerabilities still haven’t been addressed.

How to stay safe?

Internet-connected devices make our lives easier. However, most of them lack the security features that are standard in computers, tablets, and even smartphones. That’s why, according to the digital privacy expert Daniel Markuson, before acquiring a new IoT device and bringing it home, you should always consider whether it really benefits you.

“Of course, it doesn't mean that, if something can be hacked, it will be. Many of these cases are still theoretical, but staying cautious can do harm. If you have a smart device at home or work, read more about it and use network security technologies. Strong passwords and authentication methods reduce the risks as well,” says Daniel Markuson, digital privacy expert at NordVPN.

Of course, the rise of Human Factors Analysis Tools (HFAT) has forced financial services firms to push the envelope, but AI is gradually beginning to be integrated into the operations of firms across other industries. Perhaps, one sector which lags behind is insurance. However, according to Nikolas Kairinos, CEO and Founder of Fountech, attitudes are definitely shifting and in large part, this is due to the possibilities presented by AI toolsets.

Indeed, the venture capital community considers the insurance industry to be so ripe for disruption that Lemonade, a US InsurTech company, managed to raise $300 million in seed funding earlier this year. As an AI developer myself, I believe that the technology can drastically improve insurers at all levels, but only if industry leaders understand what AI actually offers and how to effectively integrate it into their organisations.

AI in InsurTech

The first, and arguably, most important part of this process, is having a sophisticated awareness of what AI in insurance actually means. For most firms, the benefits of AI actually come through robotic process automation (RPA); in other words, automating existing processes to save time and resources. For example, insurance AI exists which could remove the need for firms to manually classify documents, write contracts or process claims.

However, the most significant advantage that AI offers to insurance firms specifically stems from the way in which sophisticated algorithms can use vast datasets in order to predict and monitor risk. This would have many applications across the crucial functions of underwriting, pricing and risk management. Going further, the technology could even be used to prevent fraud by detecting tiny inconsistencies in either publicly available data or a client’s financial history.

However, AI doesn’t simply provide a competitive advantage for the forward-thinking firms who employ it, it also benefits policyholders who would enjoy cheaper premiums as a result of lower overheads and reductions in the amount of fraud.

Managing the transition

Still, some within the industry remain apprehensive about the impact of AI on either the employees or customer base of an insurance firm. The first thing is to say that many of these concerns, particularly around data security, are legitimate but it’s important that industry leaders do not see these apprehensions as an insurmountable obstacle. Integrating AI is not about saving resources for the sake of it but rather adopting new tools with the potential to improve the industry as a whole.

I’ve been developing software for professional services companies for years and based on what I have seen, I believe that successfully integrating AI into your services boils down to three things. Understanding the limitations of both the technology and your organisation, working with developers as much as budget and time constraints allow and being critical about where and why you’re integrating AI into your company’s operations.

At Fountech, we think it’s important for firms to understand what AI has to offer the insurance industry, and so we recently released a new white paper which explores how insurers might integrate AI into their business. Ultimately, with a proper understanding of AI’s strengths and limitations, industry leaders can begin adapting their firms to the rigours of the new data-driven landscape.

Towards a more intelligent future

As AI begins to play a central role in the functioning of insurance firms, it’s important that industry leaders remain invested in the technology’s potential to change insurance for the better. At root, this means having a sophisticated understanding of how AI can benefit your organisation but also remaining vigilant to any problems that might arise as a result.

Finally, as we move towards a more data-driven insurance industry, it’s essential that insurance firms begin playing a more active role in the development of new AI either through investment, active feedback, or by providing a breeding ground for new tools to be refined. Now is the time for insurance firms to begin playing a more active role in the development of the tools that are going to fundamentally reshape the industry over the next few years.

New research has revealed that people are increasingly less willing to follow the money to big economic and urban centers and are instead choosing to live, work and invest in places that give them better quality of life - and in turn the money is following them. Here Enshalla Anderson, Chief Strategy Officer at FutureBrand North America, provides her thoughts on the changing economic landscape.

This recalibration of global economies and workforces has come to light in our latest Country Brand Index, which re-orders the World Bank’s top ranking 75 countries (in terms of GDP) by how well they’re perceived against an alternative set of factors, such as value system, business potential, environmental friendliness, culture and tourism.

In the index, ‘quality of life’ was the attribute that averaged the highest in the top 10 countries, and averaged lowest in the bottom 10. In line with this are the findings that people are placing increasing importance on tolerance and environmental factors in the choices that they make about where they work, live, and visit. This is set to radically change how countries and companies organize themselves to attract talent, tourism and investment.

In the meantime, the so-called Fourth Industrial Revolution, defined by the arrival of substantial technological change, has transformed our day-to-day reality. Individuals now have more freedom to choose where they live and how they work, and they’re exercising that choice. The arrival of 5G marks a tipping point in all of this this and as telco companies roll out 5G services, we’re likely to see a spreading out of the intellectual capital across the country, instead of being isolated to the key economic hubs.

Meanwhile, we’ve observed businesses with aspirations for global growth actively avoid expanding in the expected international locations and instead set-up in relatively obscure or peripheral locations. They’re looking ahead and taking advantage of this diversifying workforce – tapping new talent, creating new opportunities for people who don’t want to live in the big cities and desire to work remotely, and benefitting from favorable tax rates and perks from regional governments along the way.

The groundswell of environmentalism is also fuelling this shifting balance of power. People are finally beginning to look beyond their household and increasingly making more personal choices of scale and import based on environmental impact and concern. This often means prioritizing ways of living and working that are less harmful to the environment, and in turn better for people’s physical and emotional wellbeing. It can also mean choosing an employer because of their stance on sustainability. By necessity, big corporates, and in turn governments, are having to prioritize facilitating this shift if they want to attract and retain the best talent.

Most recently, New Zealand (ranked no.11 in the index) has been one of the major examples of the big rebalance in power that’s taking place. Prime Minister Jacinda Ardern’s national budget balances goals that encourage the well-being of citizens (such as tackling mental health, child poverty, inequality and the environment) with traditional measures such as productivity and economic growth. Her rapid response to gun control following the Christchurch attack also asserted a genuine and urgent focus on safety and wellbeing that has set a new precedent and benchmark for other governments around the world.

There’s a growing opportunity for countries like New Zealand, and also smaller nations and cities, to compete with bigger counterparts who have more economic might than them on attributes like quality of life, tolerance and environmental concerts to attract greater tourism, trade and investment. It also serves as a warning sign for countries such as China, US and UK, who’ve scored lower in some or all of these crucial measurements, that if they don’t follow suit they’ll have to rely on doubling-down on economic might and power, which citizens, tourists and investors alike are growing increasingly less attracted to as a sole measure of country strength.

However, not all crime is conducted directly online. Some people are tricked into giving away details over the phone or are told to use their banking app to transfer money into a safe account. This multi-channel approach means that at every touchpoint, an organization must be aware that their customers could be at risk; they need to put systems and processes in place to mitigate cybercrime. 

According to a report by McAfee, the European economy is one of the worst affected areas in the world. The statistics suggest that 0.84% of Europe's GDP is affected. Looking at the UK specifically, it is estimated that the cost of cyber-crime to the UK economy is £27bn – and it is growing.

GDPR and Customer Data Breaches

One of the latest and most high-profile risks that have come to people's attention over the past 18 months are customer data breaches. Customers are increasingly aware that organizations hold a lot of their personal data and they want to be sure that it is safe. The General Data Protection Regulation was brought into place to ensure that organizations are acting responsibly when it comes to processing and storing customer data.

The financial impact of not following these guidelines, or for not having the correct systems in place, has been significant. Just months after the new regulation came into place, British Airways were one of the first companies to fall foul when 500,000 pieces of customer data were stolen, which resulted in them receiving a £183m fine.

The Financial Fallout of Cyber Crime

Before any cyber-crime has taken place, there is a significant cost to businesses that need to purchase software, implement new processes and training, and even employ new cybersecurity teams to deal with threats. For global organizations, there may also be a need to hire consultants to advise on what they need to do to keep themselves and their customers safe.

One of the consequences of cybercrime that will affect every business is the direct costs. This could be money lost by the business or by consumers. It could also be the loss of reputation to a brand. If a bank suffers a cyberattack and customers lose money, they are likely to lose confidence, which can have a huge knock-on impact on business performance and profits.

Following on from an attack, there may also be payments that need to be made. On top of losing money in an attack a business, may also need to pay out compensation, fines, and legal costs. Depending on the type and severity of the attack and the data that was lost, this can amount to millions of pounds, as demonstrated by the British Airways case.

By utilising high-quality and targeted data, you can be able to connect with more of the right individuals, getting more leads and reducing costs during the process. On the contrary, utilising the wrong data can result in dire consequences for your entire organisation other than your marketing campaign failing to gain traction.

As such, picking the right B2B data provider is imperative. You need to be sure that the partner you will be working with has the credentials and ability to provide the results you are after. Whether you want phone numbers, postal addresses, email addresses or a combination of all, you will only have peace of mind if you trust that your data provider really cares about your company.

That being said, here are important things to look at when picking a business data provider in the UK.

Verifiable Sources of Data

Can the provider tell you just how they garnered the data that they're selling? Also, have their sources been thoroughly inspected? If the answer is no, that should be a red flag. If you have proof that the business data is from a credible source, you'll want to check how often it's updated. Business data is constantly evolving and decays pretty fast. As such, the data needs to be cleaned and refreshed on a regular basis or you won't get the results you're after.

Proper Accreditations

Your business data provider needs to be registered with the Data Protection Act and the Information Commissioner's Office (ICO). Ideally, it is worth looking for a data provider that's registered with the Direct Marketing Association. This is a network of over 1000 firms that provides the best practice guidelines and legal updates. Each member is expected to collect data in an ethical manner.

While undertaking this process, it is a good idea to review the business data provider's own site in a more general manner. Do they have contact information like postal address and phone number? An unscrupulous provider may hide being their site, selling you data and then going missing thereafter.

Thorough and Targeted Data Records

What you deem as targeted and thorough will certainly depend on your specific needs. Regardless, it's best to have detailed information than the opposite. For instance, are you just given employees names, or are you told more about their roles? Also, can that data be paired up? For example, a postal address linked to an email address?

The best business data providers in UK will work closely with your to source data that best match your marketing and business goals. They will conduct penetration analysis or profiling which involves analysing your clients and looking for what they have in common as well as what drives them. This information is then used to get similar prospects from their database and thus help boost your sales.

Guarantees in Deliverability

It is also important that your business to business data provider can verify that your marketing message will reach the individuals you are targeting most of the time. Of course, a 100% deliverability guarantee is impossible as there are numerous variables that can impact the outcome. However, your business data provider should be able to show that your emails and direct mails will reach the intended prospects and that your phone calls will be answered by the right individuals majority of the time.

Business data is imperative in reaching prospects and boosting sales in this day and age. You want to ensure you are on the right side if you're going to use a business data provider. Use the tips above to ascertain such.

Yet, this is something many businesses, SMEs in particular, currently struggle with. Below David Duan, Data Science Stream Lead & Principal Data Scientist at Fraedom, explains why AI is key to the relationship between banks and business.

Research from Fraedom found that almost a third of UK SMEs claim to have a clear picture of business spend at the end of each month but little visibility on a day-to-day basis. As banks begin to remedy these issues, we are seeing the introduction of more technologies that make use of artificial intelligence (AI) and machine learning (ML). Consequently, businesses could soon benefit from a wider range of capabilities, tools and controls with AI having a major impact on the following areas:

Control over spend

Through the use of AI, banks will be able to more accurately forecast how much credit businesses require and limits on spending will be set automatically, enabling banks to gain a better understanding of their spending. This can also be implemented within the organisation as AI will allow for credit limit redistribution based on what different employees regularly spend. This means that credit will be allocated in an optimal way, ensuring the amount of credit employees are given reflects their spend history. This ensures that those employees who often make large transactions are given the credit to do so, while those who use their company accounts for lower-cost transactions don’t receive as much, so as to ensure credit is being used to the greatest effect.

Account protections

As banks make better use of AI for fraud detection, businesses will benefit from improved security features. In these scenarios, AI will help businesses keep their accounts safe by detecting any anomalies in their accounts and fraudulent activities much quicker than previously possible. This works by the model having an understanding of what is ‘normal’ for each account or card and recognising patterns based on past transactions and behaviours. For example, if 99% of the transactions for one account happen Monday to Friday, a transaction that occurs at the weekend will be seen as abnormal and flagged as such. Of course, anomalous transactions aren’t always fraud. Often they’re just out of the ordinary, requiring some more investigation – flagging them to the business would certainly allow for this. With companies currently losing an average of 7% of their annual expenditure to fraud, these technologies will help lower incidences of fraud as shown by Visa’s use of AI reducing global fraud rates to less than 0.1%. In the future, AI could be used to detect fraud in real-time, stopping fraudulent transactions from being processed altogether.

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Expense management

In addition to providing banks with a greater degree of control and understanding of their finances, banks are also beginning to use AI to offer businesses extra tools and services. A prime example of this is expense management systems which use AI to simplify the expense process and reduce the amount of time employees and finance departments spend on such tasks. As with fraud detection, the system would establish patterns based on the employees historic spending behaviour. For example, it may pick up that once a week the sum of £5 is spent in a coffee shop which the user then applies a particular expense code to. Once this behaviour has been demonstrated enough times, it becomes a pattern. So, the user will no longer have to code the transaction themselves, the system would automatically identify the type of expense it is and code it correctly.

As the system establishes more patterns and understands what the user or business is doing, smart coding could start to be applied to a greater number of transactions. This would significantly reduce the amount of time spent manually sorting through and coding expenses as the employee then only has to check that the correct codes have been applied.

Ultimately, the use of AI and ML will help banks build up a more accurate picture of their business customers and result in the ability to automate more processes. In turn, this will provide organisations with a greater level of control over their accounts, improved visibility and a better understanding of their finances. As this is realised, businesses will begin to reap the rewards of their employees spending less time manually interrogating accounts and instead being able to focus on more value-adding tasks.

Here Chris Heerlein, author of Money Won’t Buy Happiness – But Time to Find It,  and Investment Adviser Representative and partner at REAP Financial LLC, provides expertise on the little known tax breaks you could be making the most of.

The Tax Cuts and Jobs Act of 2017 gives us a lot to think about when crafting a financial framework. With the legislation scheduled to run through 2025, you want to be aware of certain provisions and exceptions in the tax-reform law and how you can take advantage of them.

State taxes

The tax-reform changes impose a $10,000 limitation on the deduction of state taxes. The IRS says that maximum does not apply to property taxes imposed on business property. For those of you with home offices, to the extent that you can allocate real estate taxes on your home to that office, understand that’s deductible outside or above the $10,000 limit.

Home equity lines of credit

If you take out a home equity line and use the proceeds to reinvest in your home, such as a new kitchen or a new wing in your bedroom, the interest remains deductible. But if you use those proceeds to, say,  pay off college tuition or credit cards, there’s no allowable deduction. We see families borrowing money on their home to use for repairs, improvements, and sometimes even to cover retirement income and keep their tax bracket under control. Borrowing home equity can be good, but you need to keep track of what you’re doing with the proceeds because if they’re invested in the home, you can still take a deduction.

Charitable contributions

These are deductible, as they always were, but the reason to be concerned about this category is the doubling of the standard deduction. Prior to the new tax law, only about a third of people in the United States actually itemized deductions. And after this increase in the standard deduction, guess what? It goes down to less than 10% of Americans.

Think about that: 90% of people will claim a standard deduction. Now, why does that affect charitable contributions? Well, as you may know, you can claim a deduction for a charitable contribution only if you itemize. If you don’t itemize and take the standard deduction, you get no tax benefit for charitable contributions. But here are some workarounds:

For people over the age of 70 ½ — the age when you have required minimum distributions on your IRAs and 401(k)s — there’s something called a qualified charitable distribution (QCD), and you can take up to $100,000 out of your IRA each year and basically have it sent directly to a qualified charity. This is a wonderful strategy for families that give small amounts and large amounts. And you avoid all tax on that distribution that ends up at the qualified charity. You can claim the standard deduction and still avoid tax on the IRA required distributions, but remember, the first dollars you give to charity should be money out of your IRA.

What about those of you younger than 70½? Here’s what you might want to do. This is a little outside the box but it’s a powerful strategy. Bundle several years or so of contributions to your qualified charity. Let’s pull five years out as an example. You can actually bundle these contributions into a single year so that you will go over the standard deduction in that one year and claim a deduction for the excess contributions. A Donor Advised Fund (DAF) is when families put money into the fund, they get the full tax deduction for whatever goes into the fund that year, plus they can distribute that money over time, at their direction. I recommend this a lot of times to clients, especially those taking the standard deduction.

Entertainment and meal expenses

There are some big changes when it comes to entertainment expenses and meal expenses. The new tax law disallows any deduction for entertainment expenses period. Meals — an integral part of business dealings, of course — are a bit different. The IRS says you can still deduct the meal expense as long as you have a separate receipt. Going forward, make sure that your food costs for clients are separately stated on those invoices and receipts. That’s a big one and can add up fast.

Then there’s the very important SSA-44 Form. Let’s say you’re a high-wage earner and you are going to work half the year when you retire at 65. You get off the employer health care plan and go on Medicare. Well, the government dictates your Medicare premiums by how much income you report. If you go over these thresholds, you are going to get a letter in the mail that says, “You’re Medicare premiums are going up.” And I’m talking perhaps $500-plus per person more for the same coverage your neighbor is getting. The SSA-44 Form is something you would file with your tax return in a year that you retired and were over these income limits, and they’ll give you a once-in-a-lifetime exception around those limits.

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