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Here Gareth Jones, Chief Information Officer at Fraedom, explains how banks can move to the cloud in stages, picking the most pressing workloads and moving them to the cloud incrementally, and adopt a hybrid technology infrastructure, touching on the inherent benefits therein.

Banks have traditionally been reliant on legacy systems, however, now almost half (46%) of bankers see these legacy systems as the biggest barriers to the growth of commercial banks. Technology is becoming an integral part of the banking industry and the pressure is on for these institutions to innovate and adopt the latest capabilities. Therefore, banks must overcome the reluctance to make changes to their IT infrastructure.

As new challenger banks increasingly launch directly to the cloud and consumers demand the latest technologies, it’s time for traditional banks to consider migrating to the cloud. Here’s how they can do this and the potential benefits they can expect to experience:

An incremental move to the cloud

Fortunately, banks needn’t see the adoption of the cloud as an all or nothing venture. Instead, it is possible to migrate in stages. Vitally, banks must acknowledge that doing a ‘lift and shift’ will offer limited benefit to their organisation or their customers as their workloads won’t be cloud-ready or scalable. Banks should see the move to the cloud as a gradual transition and start by migrating the most pressing workloads and services to the cloud in a controlled manner. This will ensure workloads are moved across securely, nothing is lost in the process and that customers aren’t impacted by significant periods of downtime. This will result in the adoption of hybrid technology infrastructure, at least in the short-term, which research by IBM found that 87% of outperforming banks are using to reduce operational costs. This approach is favoured by more than two-thirds of global banking executives surveyed by Accenture who intend to operate in a “bimodal” way — maintaining key legacy systems and those not easily replicated on cloud platforms, while transferring other systems and adding new applications in the cloud.

Fortunately, banks needn’t see the adoption of the cloud as an all or nothing venture. Instead, it is possible to migrate in stages.

As many banks are reliant on legacy systems, moving to the cloud, even as part of a gradual transition, can seem daunting. Therefore, seeking assistance from third-party fintechs that are much more accustomed to the technology and have the experience of carrying out many cloud migrations, can help to ensure that the process is smooth and secure.

The benefits of the cloud adoption

Cost reduction

One of the most significant benefits of the cloud is its potential to help banks reduce core costs, particularly those associated with delivering new solutions, as well as overall operating costs. This is due in part to the fact it removes the cost of the upgrade cycle that comes with physical infrastructure. It also means banks no longer need on-site infrastructure management, allowing banks to focus resources on value added functions more closely aligned with their core business objectives. In the long-term, cloud adoption can help banks enhance customer satisfaction and bring products to market faster, therefore allowing them to maximise return on investment.

Scalability

A further benefit of cloud adoption is increased scalability. Currently, organisations not utilising cloud services must invest in additional hardware in order to scale. This incurs a greater impact in time and money. Adopting cloud allows banks to scale on-demand, with cloud services able to expand and contract as needed almost immediately. This provides a far better capability to manage costs in line with user and business demands.

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Agility and innovation

Legacy systems are still largely important to many banks’ daily operations, but moving to more agile systems is essential to growth and innovation. Therefore, migrating to the cloud helps banks overcome this issue, whilst also offering additional cost-savings.

With so many benefits, traditional banks can’t afford to ignore cloud technology any longer. While legacy systems may have once played an integral role in their business, these systems now widely act as inhibitors. A gradual transition to the cloud will enable increased operational efficiencies, while also providing the infrastructure through which they can begin to foster the same level of innovation as their cloud-native competitors. This will allow traditional banks to not only keep up with the changing technological landscape, but the ability to develop more innovative products and services faster will also help them to answer customer demands and compete with challenger banks.

Traditional companies are struggling to keep up

Today’s digital landscape frequently imposes new demands on financial institutions, with innovative technologies and new regulations such as PSD2 disrupting established processes. As physical banks and cash machines continue to disappear from our high streets, there is a growing shift towards customers using their mobile phones to conduct their banking activity. In fact, over two-thirds of British adults now use online banking[1], putting great pressure on traditional banks that are burdened with legacy IT systems. As 46% of bankers perceive this infrastructure to be the biggest barrier to the growth of commercial banks[2], the need to update the network is more urgent than ever before.

The challenger banks of today, born on the cloud, automatically inherit cost, performance, and efficiency benefits that traditional banks simply do not have. Without having to embrace the initial digital change, this new generation of mobile banks can be more nimble, hoisting technologies to personalise their services, and do so at a much lower cost. Legacy systems have proved reliable in the past, but in order to maintain momentum in the digital age, and compete with innovative businesses, financial institutions should push forward with rapid investment in cloud services.

The need to migrate to the cloud

Massive growth in data usage has made it increasingly difficult for organisations to store all their intelligence on in-house servers. Today’s financially-literate customers should not expect to have their personal information kept in physical computer systems. Instead, they expect instant access to their personal data anytime, anywhere, and in the most secure manner.

While some financial institutions are exploring cloud-based solutions, many remain hesitant in undertaking a full-scale migration. With such a complex transformation to undertake and outdated architecture to contend with, companies are encountering certain obstacles. Time and cost pressures, in particular, are leading to some firms to ‘cut corners’ when it comes to upgrading their infrastructure, causing severe disruption to customers. From October 2018 to October 2019, the UK’s Financial Conduct Authority (FCA) reported that major banks suffered 265 IT shutdowns, which prevented customers from making payments[3].

The financial services sector has also been shaken by a new wave of regulations aiming to better protect both customers and businesses. Since the General Data Protection Regulation (GDPR) has come into force, European Union citizens have been granted more control over their personal data. This means that organisations collecting data are obliged to do so legally and to protect it from misuse.

Legacy systems have proved reliable in the past, but in order to maintain momentum in the digital age, and compete with innovative businesses, financial institutions should push forward with rapid investment in cloud services.

Furthermore, with Payment Services Directive 2 (PSD2) fast-approaching, companies are obliged to implement Strong Customer Authentication (SCA) to mitigate the risk of payment fraud. A huge number of fraud cases – nearly 340,000cases - were reported in 2018[4], calling for a double layer of authorisation to make financial transactions over £28 more secure. It has therefore never been more important for institutions to properly execute a full-scale migration to the cloud to benefit from its innovative services, including biometrics.

Benefits of migration

The AWS marketplace, and similar service providers, offer an online platform through which customers can unlock a plethora of cloud and other digital applications. Making the transition via these networks, where the cloud is effectively brought to you, renders the process far more simple and frictionless.

Through AWS, financial firms can easily integrate the necessary biometric authentication platforms. Designed to verify the identification of employees and customers using multi-factor authentication, companies become far less susceptible to cyberattacks and data breaches. By adopting digital identification technologies, institutions can achieve regulatory compliance and offer a safer customer experience. It is not too late for traditional firms to transform themselves and compete.

The greater computing power of cloud-based software brings a host of other benefits to organisations and customers. Having data centralised through the cloud avoids the latency issues that come from having computing tasks handled from afar, and permits the on-demand availability of resources. This allows a more seamless digital experience to be created, to meet the evolving needs of customers. Simultaneously, businesses can gain cost and time efficiencies that translate into more effective workload management, increased flexibility and ultimately productivity.

If financial companies are to avoid falling behind today’s challenger banks, they must discontinue the use of legacy IT infrastructure, and fast. By utilising the resources that services such as the AWS marketplace have to offer, companies can efficiently embed the cloud into their operations, and deliver the best online experience expected of today’s educated customers. The migration will only ensure secure account entry using the latest biometrics, it will also achieve cost and time efficiencies that could well turn around profit margins.

 

[1] https://www.theguardian.com/business/2019/jul/01/mobile-banking-to-overtake-high-street-branch-visits-in-two-years

[2] https://www.instapay.today/insight/legacy-technology-in-banking-a-real-issue-or-is-it-just-perception/

[3] https://www.telegraph.co.uk/news/2019/11/27/major-banks-suffer-five-glitches-week-finds/

[4] https://www.paymentscardsandmobile.com/uk-fraud-report-2019/

Below Finance Monthly hears from Adam Rice, VP Product Development, Centage Corporation, who touches on the need to expand budgets and care3fully account for said upgrades.

For many businesses, the third quarter is budget season. It’s a busy time for the finance team, as they meet with department heads and general managers to predict what the coming 18 months will look like for the business. As preoccupied as they are, I think they would be wise to take the time to upgrade to a cloud-based planning platform sooner rather than later. Why? Because in the end they will save themselves time, work more efficiently and achieve better results. Specifically, a cloud-based platform will enable the organization to move to a solid financial plan with a rolling forecast, updated on a monthly basis. And when you think about it, a rolling forecast is far more accurate than a budget created in July 2019 that attempts to paint a picture of what December 2020 will look like.

If changing horses in the middle of the race sounds daunting to you, consider all of the circumstances small to midsize companies face in today’s business environment.

SMBs Need to Step-Up to Global Challenges

SMBs have long been the backbone of the American economy and we count on them for job growth. According to the U.S. Small Business Administration, small businesses employ 58.9 million people, accounting for 47.5% of the country’s total employee workforce.

Technology has fostered competition from all over the globe. Manufacturers are competing with countries where labor costs are low, as are retailers that are now competing head-to-head with ecommerce sites that offer international delivery. For example, the Alibaba Group, which owns AliExpress, earned over $30 billion in sales in a single day in 2018.

This kind of competition means that SMB leadership teams need to make better decisions faster. What is the impact of opening a new sales office in the Northeast, or applying for a loan to expand manufacturing capabilities on the P&L? What happens if we assume 20% sales growth but we only realize 17.5%? Business managers need to see the cause and effects of their decisions on the company’s financial statements - a feat that’s nearly impossible using a spreadsheet.

On the other hand, a cloud-based system allows financial teams to do what-if scenario planning quickly and easily. As with all things cloud-based that include intelligent APIs, it’s simple to connect multiple data sources together and then overlay analytics and data visualization to make smarter decisions.

Streamlined Implementation and Upgrades

SMBs have limited IT resources and they need to be extremely selective as to which platforms to purchase as a result. Investing in a project that ultimately fails can have devastating consequences, potentially threatening a company’s viability.

Cloud-based solutions tackle these challenges in multiple ways. For instance, many offer out-of-the-box workflows for financial reporting, forecasting, scenario validation and so on, which means implementation is streamlined. Upgrades happen automatically, which means IT resources are spared and end users get to automatically take advantage of new features and functionality. This is a critical consideration as many platforms are beginning to add artificial intelligence and machine learning to key tasks, such as compliance.

Scaling is also much easier, as native cloud-based platforms can scale up and down as a business grows or as seasonality affects demand.

Inherent Agility

Cloud-based systems often act like data warehouses, centralizing multiple data sources and tracking a wide variety of KPIs and metrics. This is critical functionality for business managers seeking to connect the dots and assess the cause and effect of their business decisions. And if the data is always on, meaning it’s pushed to the platform automatically, managers have up-to-the-minute insight into the health of the business.

Many platforms come with data visualization tools or dashboards that allow users to slice and dice information in myriad ways. The benefit here is that it allows all managers to view the data in ways that are meaningful to them. For example, the head of sales can monitor the key metrics that they care about with a higher degree of accuracy, and most importantly, drill down into the data to uncover the source of anomalies.

In fact, the data visualization tools allow the financial team to provide data-driven answers to the tough questions that CEOs, boards and leadership teams ask daily.

SMBs are on growth paths; increasing the size of their market share is always a top priority. As the business grows, and as planning becomes more complex, well designed cloud-based platforms can handle the complexity. These platforms let financial teams see into the future, test the impact of multiple scenarios and ultimately make faster decisions with confidence. They’re also far more likely to adapt to evolving business needs and goals. So while it may take a bit of work to transition this budget season, it will be time well spent.

A 2018 IDG Cloud Computing Study found that 73% of businesses have at least one application in the cloud. However, from spend analysis to invoicing, the spend management industry is often stuck utilising outdated, paper-based or on-premise processes that cause inefficiency and budgetary mishaps.

 In order to run the procure-to-pay process at maximum operational efficiency, it’s time for the spend management industry to migrate to the cloud. Stanton Jandrell, Fraxion’s CEO, discusses the four ways in which moving spend management to the cloud would benefit your business.

Improved efficiency and productivity

Research from the Tungsten Network found that businesses waste an average 6,500 man hours annually because of inefficient, paper-based payment processes. Unfortunately, many organisations still handle spend management with this traditional model leading millions of invoices to be written out by hand, sometimes even on simple notebook paper like the image below. With this system in place, invoices or other documents are more likely to get lost or misfiled – and even a small misfiling is costly. In fact, a misfiling rate of 0.5% in a four-drawer cabinet can lead to 1,000 misfiled documents.

Utilising a cloud solution for spend management boosts productivity by implementing simple automation that drives efficiency and removes the need for paperwork — for example, moving requisition requests to an automated form that submits the request and notifies appropriate approvers. According to a Harvard Business Review study, 74% of organisations reported that cloud services have given them a competitive advantage because of the ease and speed. As information is hosted in the cloud, this also makes remote access easier for stakeholders through mobile applications. This way, if an error occurs or a request must be handled immediately, employees can still access the system to provide a quick response.

With the heightened visibility of cybersecurity disasters over the past few years, many businesses assume that, once data is in the cloud, it’s more likely to fall into the wrong hands. And, when money is involved, this concern becomes even more prevalent.

Budget Visibility

Organisations that run manual processes have limited or no view of the budgetary impact that a requisition may have. Worse still is that the impact against the budget is typically only visible in a budget variance report that gets generated a few weeks after month end. At this point, intervention is impossible.

While a tremendous amount of effort goes into building a budget, if organisations aren't able to “operationalise” the budget insight into the approval process, the efforts are wasted.

Improved cash flow oversight

Cash flow can make or break a business. Often, businesses see budgetary discretions because of unapproved spend or overestimated funds. In reality, the overall lack of visibility into what the business is spending day to day can add up to 40% of the total spend. Spend management systems operating in the cloud provide greater control over cash flow through the automatic authorisation of suppliers, enforcement of budgets and recommendation of approval processes before any costs are incurred. Cloud-based systems provide a comprehensive audit trail and detailed view of the entire process, providing stakeholders with greater insight into each step. This helps create a more efficient and regulated spend management process — which is vital to business success, especially when you consider that companies lose 20 to 30%  in revenue every year due to inefficiencies and errors.

Detailed reporting and analytics

Leveraging a cloud system for spend forecasting allows businesses to shift from the ‘management’ of spend to the ‘enablement’ of smarter spending through improved visibility into needs, budgets and costs. Analytics and back-end insights are vital for the success of a cloud system – and CIOs are recognising this fact, with 66%  planning to invest more time in cloud-based analytics throughout 2019. As data is gathered with each requisition, approval and transaction, cloud systems have the ability to provide detailed analytics that can help identify spending trends and augment forecasting. The ability to effectively forecast leads to long-term bottom line savings through more effective management of the dollars in and out of the business.

When you move spend management to the cloud, data remains safe from damage or loss of physical storage like a mobile device, laptop or paper documentation.

Better security

One concern that often comes up in internal conversations about cloud migration is security and data protection. With the heightened visibility of cybersecurity disasters over the past few years, many businesses assume that, once data is in the cloud, it’s more likely to fall into the wrong hands. And, when money is involved, this concern becomes even more prevalent. However, this is not the case. In fact, paper-based or on-premise processes are much more likely to face security threats since there is not an established and visible trail of spend in place. On average, on-premise users experience 61.4 attacks while cloud systems only experience 27.8.

When you move spend management to the cloud, data remains safe from damage or loss of physical storage like a mobile device, laptop or paper documentation. This is because the cloud provides the opportunity for comprehensive data backups that can be recovered in case of an emergency.

Effective spend management is vital for the success of businesses across various industries. By utilising a cloud-based spend management system, businesses can see improved productivity, greater visibility into spend, more control over policies and procedures, improved forecasting and better data security. In order to maximise operational effectiveness, it’s time for businesses to move away from the outdated, paper-based processes of the past and dive into the future with a cloud platform.

Most of Nitin’s career has been involved with business model changes around disruptive technologies and M&A work in the TMT sector for companies around Silicon Valley. He has developed M&A strategies, conducted commercial/operational/technical due diligence and has assisted with M&A integrations and separations for his clients. He specialises in creating value from emerging technologies and helping his clients prepare and adapt to the next big thing. A veteran with over 1,000 transactions, he specialises in revenue synergies and has also led dozens of cost-focused consolidation M&A deals. His recent work includes helping CEOs, boards, investors and business leaders transform their business models by leveraging disruptive trends and M&A to pivot into new business models, utilising technologies such as SaaS, SDN, blockchain, open source, AI, IoT, AR/VR, drones and voice-enabled devices.

“As a Silicon Valley insider for two decades, it is a fascinating challenge to utilise my business knowledge, network of experts, consulting skills and experience in M&A deals to solve problems at the cutting edge of new technologies”, says Nitin. “I have built an expansive network in Silicon Valley with TMT sector clients who look to me to help them through difficult business changes, serving as both a trusted adviser and personal advocate.”

 What are the current key business and technology trends within the TMT sector?

I believe that today we are experiencing the equivalent of tectonic shifts in business that are primarily technology-driven and are impacting the fundamental ways we do business – and these trends extend far beyond the technology sector. These shifts can conflict with each other, making business strategy more difficult to conceptualise and execute today than it was in the past. Some of these shifts are as follows:

Each of these shifts is a transformation that presents an opportunity to get ahead of the game.

There are few absolute rules in this new frontier – companies need a data-driven approach to navigate the complexity, uncertainty and ambiguity, which has become profound over the last few years and is not likely to abate.

Traditionally, technology has served to enable or enhance existing business models or to create entirely new ones. More recently, we find ourselves in a place where there is a developed technology, but the ecosystems and business models around it are taking longer to evolve. Take, for instance, blockchain – here we have a viable technology, but it will take a few years to build scalable business models around it and monetise it. CEOs and corporate think tanks must devise new ways of adapting in such a landscape.

I have built an expansive network in Silicon Valley with TMT sector clients who look to me to help them through difficult business changes, serving as both a trusted adviser and personal advocate.

How is FTI positioned to take advantage of these so-called shifts and disruptions in the market?

FTI is configured differently than traditional consulting firms because we have an expert-centric approach to creating value for our clients. Most of our practitioners have deep industry experience, having operated businesses as executives and in consulting for several years, which has created a lot of credibility with clients and other executives. We are also an industry- and sector-oriented firm and taking a profitability view of the business is a highly valued and impactful perspective for our clients. We not only understand the sector, trends and structural shifts, but can also translate those into meaningful operational and tactical outcomes. Our clients tend to hire us for our expertise and experience rather than to simply add leverage to their internal teams. Given the highly sector-focused approach, we tend to formulate points of view on what is coming next, to ensure our clients are well prepared to adapt.

You have quite an amazing M&A background as well. What are key current M&A trends and drivers in the sector?

There is a lot going on in the M&A world. The last two years have been record-breaking, with unprecedented deal activity across industries, geographies, private equity and corporates. While there is some rumbling that M&A is slowing, I think that the big drivers are intact. For one, the US dollar has appreciated significantly against some developing market currencies, and that creates an interesting value discount. The 2017 tax cuts will continue to put more money in the hands of corporates, which will likely fuel M&A activity. The wave around digital business models is not cresting, and companies will acquire or strengthen their capabilities in this space. Incumbents will continue to consolidate to survive and create scale.

All these trends have put pressure on internal M&A teams and external advisers to create more value and to do it quickly. M&A integration has gone through a lot of change, and many professionals have still not adapted to the structural integration aspects and approach it ‘function-by-function’, limiting their ability to create value. There are several industries and sectors where the M&A wave is just starting – the scaling of technologies such as blockchain and AR/VR will attract preemptive strikes from bigger players. Private equity firms continue to be aggressive and are developing some unique strategies for deploying capital and creating value. When you consider all of these trends, I don’t think that M&A activity in the sector will slow down appreciably anytime soon.

The last two years have been record-breaking, with unprecedented deal activity across industries, geographies, private equity and corporates.

How do you go about keeping up with all the trends in the market while continuing to build skills and reinvent yourself?

This is an important aspect that has become critical if you want to stay current, relevant and excel. Learning patterns, adapting and creating value for the entire ecosystem around you is vital when working within this field. Gone are the days when one could read a few books or attend a couple of training sessions to grasp a new subject. Our clients are very smart people and they have access to a vast collection of materials and resources.

The way I have adapted is by learning from my network. For example, I learned about autonomous driving by speaking with approximately 50 companies across the value chain. By the time I spoke with a couple of dozen players, I started seeing patterns and trends that they were not able to see individually, such as partnership opportunities, M&A opportunities, market needs and disruptive trends.

After you’ve networked, it’s about building insights and getting into more details through targeted discussions around specific areas of autonomous driving. Clients value market insights and trends from external sources as validating. I did something similar with blockchain and IoT previously. One can always dress up their credibility with technical credentials, but this is usually less effective than learning from the field and building insights and skills from it. People are also curious about what others are thinking and doing, hence forming a cohesive, defensible, fact-based point of view often goes a long way.

Gone are the days when one could read a few books or attend a couple of training sessions to grasp a new subject.

It is widely believed that you are one of the most connected C-Level Executives in the TMT sector. How have you built such an impressive network?

Great networks are always built over time. It is easy to make connections, but it’s a lot harder to maintain them. I like connecting with people in general and I like exchanging ideas and facilitating with them – be it making introductions, sharing insights, learning from them, advising them or being helpful otherwise. Not all meetings have to be about getting something out of them – be genuine, take interest, help if you can and I guarantee that will deepen your relationships with them. I always tell people that if your relationships are strictly an outcome of your business, then something is not right, but if your business comes to you as a byproduct of your relationships, then you are doing it right. Remember, it is about the quality and strength of your network – not the numbers. It takes a lot of commitment to genuinely foster and maintain a network as it gets bigger. Your network is like a living organism and it needs to be nurtured in order to strengthen and grow. There is not one magical formula for this; everyone has different styles, but it is important to know what works best for you. The crucial element is to put yourself out there in the field.

You have received multiple awards for pioneering new approaches in M&A – please tell us about them.

The most important outcome is to innovate and adapt – awards are only a byproduct of that but, of course, serve as a validation and recognition of your contributions. Some of my work that has been externally recognised is creating a new framework for delivering revenue synergies in M&A, a new approach to managing M&A from strategy through integration by utilising Wargames - a new and unique way to assess blockchain and understand how to unlock its business model value. Additionally, I am currently working on building a new approach to assess and integrate platforms, which requires a different approach from integrating products or processes. When it comes to platforms, the bulk of value created is outside the company and delivered through network effects. Stay tuned for more on this topic.

How does one go about generating new business in today’s world? Has the approach to sales changed?

I think the best way to sell nowadays is to be visible in the right places, share insights and experiences to create a ‘pull effect’. You can no longer just show up and talk about the services your firm offers and wait for the client to bite on something relevant. More specifically, today’s clients judge your expertise by how well you understand their business, trends and context apart from your technical or functional area.

Today’s clients judge your expertise by how well you understand their business, trends and context apart from your technical or functional area.

My field is highly relationship-driven – the deeper you know your topic, the more amplification you will get from the network or relationships in order to get referrals. We don’t live in an age of long attention spans. If you meet the CEO of a company in the elevator, speak about business issues relevant to him. If what you’re saying resonates, you’ll have plenty of opportunities later to talk about how great your firm is.

You also sit on boards of multiple companies – can you tell us about them? How do you choose the companies that you join?  

Foremost, I need to genuinely believe in what the company does and that I can really add value. I am always happy to help talented people with my ideas, skills or network. A great idea is unlikely to succeed without great management teams, and resonating with these people is a key consideration for investing time.

I’m also attracted to disruptive technologies that could have a big impact on the business world. Some of the companies that I am a board member of include Pronto, a partner orchestration and automation platform; SmartBeings, an AI based smart speaker focused on enterprises; and Crosby, a blockchain-based asset tracking technology which is unique and differentiated.

What is your advice to CEOs and how do you adapt to changes in today’s world?

What is your advice to the Management Consulting community on how they should adapt to the changing landscape?

We all know the cloud is leading the way in transforming operations across financial organisations, but while a significant enabler, it represents just one element of much wider digital investment. We hear from Steven Boyle, CEO of Integrated Cloud Group, who discusses how cloud technology is only the beginning of true digital transformation for financial institutions.

Cloud is pulling the strings, but household names such as HSBC, Barclays, Lloyds Banking Group, and the Royal Bank of Scotland are increasingly investing in a host of transformative, agility-enhancing technologies such as biometrics, robo-advisors and artificial intelligence as they pledge to keep abreast with customers’ demands for faster, simplified banking interactions.

I see traditional organisations looking more and more to FinTech startups to build and integrate new functionality and that will improve services, allowing them to focus more on customer needs.

Last year, HSBC launched biometric security for mobile banking in the UK, claiming that it was the biggest rollout of its kind. The bank says that this will enable more than 15 million customers to access accounts, using voice or fingerprint recognition biometric technologies. Lloyds – which is looking at Amazon Echo technology for voice recognition – also passionately believes that such notions have huge implications for Britain’s 360,000 blind or partially sighted, potentially opening up banking like never before.

Certainly, to my mind, it all represents a significant leap forward for biometrics technology being used in the UK banking industry for the secure authentication of account holders.

First off the blocks was Barclays which has been using voice authentication in its call centres since 2013, and in 2014 announced plans to introduce finger vein recognition technology for some.

However, all HSBC customers will have access to fingerprint authentication services using the fingerprint readers that are built into Apple iPhones, in tandem with HSBC’s mobile banking app. Like Barclays, HSBC is using Nuance Communications voice recognition, which analyses over 100 unique characteristics to identify a speaker. Furthermore, once HSBC and First Direct customers have registered their finger and voice prints, they will no longer need to remember security passwords or PIN details. It’s clear to me that such innovations hold the potential to absolutely transform customer interactions.

Then there’s the much-discussed and analysed rise of the robots. The likes of Lloyds Banking Group, Barclays and Santander UK are further innovating with the introduction of digital robo-advisors – essentially, computer-generated recommendations based on online financial questionnaires  – which, it is thought, could help to fill the ‘financial advice gap’ for those with small savings pots who need investment advice but can’t necessarily afford it.

In this instance, the bank suggests how much to invest into certain funds, and then transacts on a customer’s behalf in return for a fee. While not necessarily a solution, it seems to me an important recognition of consumer needs in the wake of the retail distribution review which scrutinised the mis-selling of investment products and made it uneconomical for banks to provide advice. Certainly, platforms like Wealthfront and Betterment have already proved hugely popular – and it’s no coincidence that Lloyds jointly hosted an event entitled, ‘Can I Trust a Robo-Advisor?’ at London’s FinTech Week.

RBS is also reportedly planning to utilise robo-advisors across its investment and protection divisions as part of a cost-saving strategy that is expected to reduce the need for face-to-face advice.

Nevertheless, it should be noted that others are following an alternative path; HSBC is set to unveil a division of investment advisors for all customers, while Santander UK is introducing 225 investment advisors across its branches.

Another parallel disruptor is the rise of artificial intelligence which is set to allow consumers to talk to a device and receive the information they are looking for. In fact, it’s already managing many banks.

A leading proponent of AI – predicated on the belief that data is king for the leveraging of informed decision-making and risk management – has been Barclays, which says that the notion of touching a device could soon be obsolete when it comes to executing transactions. The bank sees digital technology as being crucial to its future and believes that its customers could soon be talking to a robot computer system to perform simple transactions.

Lloyds Banking Group introduced the first networked ATM in 1973, and has continued to innovate, now employing Google analytics tools to analyse customer behavior, allowing it to better understand customer needs and meet them in real time.

Amid this unprecedented period of digital upheaval, the opportunities for the banking sector are effectively limitless – suddenly the walls have come down and there are extraordinary possibilities all around. Big banks are turning to technology for myriad reasons, but at the heart of the drive for transformation are significant economic benefits, matched by enhanced agility, less risk, and a better customer experience.

Those that think heightened technology means less of a customer relationship should, to my mind, consider the idea that it could in fact serve to free up time for banking staff that will actually facilitate, rather than, hinder relationship building. This will, in turn, allow more unique needs to be addressed while the more mundane tasks are quickly and automatically fulfilled.

As data security concerns are increasingly answered by better protection, it all makes for a fascinating road head for the banking sector as it embarks on the journey to new heights of speed, accuracy and efficiency.

The chances are your organisation is adopting cloud computing in one way or another. Moving to the cloud can help you accelerate IT delivery, realize immediate productivity and financial efficiencies, and ultimately, drive business agility. But it can also open up the attack surface, leaving the entire organisation exposed to security threats. Here Andrew Lintell at Tufin explains the ins and outs of cloud security and offers valuable insight on making it as tamper proof as possible.

The adoption of cloud services is continuing its rapid upward trend, and the market is expected to rise 18% this year to $246.8 billion. Networks are becoming more and more complex as the modern IT infrastructure adopts private and public cloud platforms to make better use of an array of cloud services.

Yet public and private cloud services can present many challenges to chief information security officers (CISO) as they struggle to keep up with ever-evolving technologies and enrol multiple vendors to cater to different departmental needs – all in addition to the associated security risks against their businesses. Security leaders are aware that achieving business objectives depends on adopting security best practice across all levels of IT, including the cloud.

However, one of the problems is that some cloud services are being used without the knowledge of the IT department, bypassing security policies, and therefore the reach of enterprise security - otherwise known as Shadow IT. In fact, Gartner has predicted that by 2021, 27% of all corporate data traffic will bypass perimeter security (up from 10% today) and flow directly from mobile and portable devices to the cloud. This causes untold sleepless nights for CISOs and makes their job of managing and securing the use of rapidly multiplying cloud services across an entire, and often global organisation, a continuing battle. And to make things more complicated from a security point of view, many CISOs lack a single pane of glass view into their networks through which they can see and address risks.

With security now top of the agenda for organisations of all sizes, here we consider the primary challenges that CISOs need to address in order to close the security gaps that exist as they move to the cloud.

Improving visibility

While most enterprises have already adopted private, public cloud, and hybrid network technologies, one of the biggest resulting challenges for CISOs is that cloud environments are dynamic, with limited visibility. That lack of visibility is likely the result of ownership over virtual infrastructure in public clouds now being held by central enterprise IT teams. With the inclusion of the public cloud, networks are increasingly large, fluid in change, and complex, and so are the security policies needed to manage across multiple platforms and technologies.

With this in mind, it is no surprise that surveys consistently show that cloud security is an on-going struggle for IT security professionals, with many organisations reporting that it is difficult to get the same level of visibility into cloud-based workloads as they have on their physical network. Good data governance is key, and CISOs need to know where information is being shared and stored, and what cloud services the company might be using. One department might be daily users of Dropbox, for example, and another department might prefer to communicate and share files using collaborative tools such as Slack. Regardless of who is collecting the data, the points of data aggregation and storage need to be well documented and protected given the impending requirements, and penalties of non-compliance, with GDPR.

More often than not, enterprises decide to migrate their on-premises systems over time – a kind of ‘dipping a toe’ approach to public cloud platform adoption. Alternatively, they may also take to migrating to a private cloud (or hybrid network), to maintain a higher degree of control. Regardless of their choice between the public or private cloud – or some cases, both – the problem is that cloud migration adds to the complexity of the network and inhibits visibility across the network when introducing new vendors that bring with them increasing east-west traffic. To seamlessly map and consolidate the management of these platforms to avoid business disruption, enterprises must enrol the help of network security policy management across the corporate network to ensure visibility and consolidate the management of multiple tools.

Without visibility, it’s impossible for CISOs to enforce consistent policies and mitigate risks. Traditional security tools, like firewalls and intrusion detection systems, work effectively within an organisation’s four walls, but continuous manageability becomes difficult when it comes to adding additional tool providers necessary for the cloud. With a centralised view and management over a network through a single console, organisations can overcome the lack of visibility often associated with cloud adoption and simplify the management of security policies across multiple tools, mitigating risk and ensuring compliance across the entire enterprise.

Visibility also benefits from creating a risk ranking of the cloud services in use. This should include an assessment of whether a particular service has been breached recently, whether they encrypt data in transit and if their system has been patched or configured to address high profile threats like the infamous Heartbleed, WannaCry, or ExPetr, for example.

Ensuring compliance

As part of the process of moving data from a company’s internal system to the cloud, organisations are forced to examine closely how that data will be kept so that they remain compliant with laws and industry regulations. This raises a whole range of questions for security professionals. Where will our data be stored? Who is looking after it? Who will be able to see it and can we control that access? How secure is that cloud platform? Have we ensured that our deployments have been effectively and securely configured?

The type of data organisations is storing could be anything from intellectual property, to payment information, to personal data. Each data type has regulatory requirements to comply with. For example, the payment card industry data security standard (PCI-DSS) is a proprietary information security standard for organisations that handle card data, and the upcoming General Data Protection Regulation (GDPR) is the new legal framework in the EU covering personal data.

Data must be classified and organisations must understand what data is allocated to the cloud, and what may require a higher degree of storing in-house. Organisations must also know how - and where - data is being protected and backed up.

Gaining control

The complex IT environment that CISOs have to contend with today includes multiple endpoints subject to the fluctuations brought on by a wide range of mobile devices and desktops. End users are choosing multiple cloud vendors, but many of the features that make cloud-based applications so attractive, such as sync, share, and ease of collaboration, are the very things that put corporations at risk when it comes to cloud usage.

Securing hybrid environments requires CISOs to gain control of their security configurations in the cloud. Best practice revolves around developing a unified security policy with a detailed snapshot of the entire network, defining what type of data is in use and prescribing the appropriate measures for each type. When enterprises can quickly and accurately apply a policy – regardless of the environment – control and business agility is gained.

Finally, organisations need to control who has access to specific data sets. This means that as people come in and out of an enterprise, revoking access credentials is very important for former employees. The danger is that when people leave, they still have access to information stored through cloud providers.

Organisations need a seamless way to bring infrastructure, people, and processes together - a “single pane of glass” that can manage security policies and configuration across the whole network. With cloud infrastructure now increasingly commonplace, it’s important that organisations follow best practice such as this, to make the cloud security experience as safe, sound, and secure as possible. The alternative would leave infrastructures exposed to the security threats that lurk around every corner.

From AI to IP, with GDPR and cybersecurity in the midst, Karl Roe, VP Services & Cloud Solutions at Nuvias, tells Finance Monthly what’s in store for organisations using the cloud in 2018.

The Rise of AI

2018 will see Artificial Intelligence (AI) drive a transformational change among organisations and impact on cloud use.

ICT isn’t getting any simpler, and businesses are being forced to move faster as their customers’ requirements become more demanding. This is driving innovation in areas like AI, but automation of past processes won’t be enough to keep up with the “need for speed” in business agility.

We will see lots more AI projects and initiatives in 2018; it will be the cornerstone of change in automation of ICT. Proactive, automated, non-human decisions are now a necessity. Are the robots coming? Yes, they are – but we still need to develop the Intellectual Property (IP) to drive them.

IP Will Be Key

With emerging technologies like AI becoming more prominent in 2018, organisations are demanding bespoke software and solutions that solve their specific business problems.

As a result, companies are increasingly working with cloud service providers to gain a competitive advantage – this includes using public cloud providers to power their IP-centric solutions. Investment in infrastructure development is diminishing, replaced by a need for specific business-driven solutions that require unique software to bring these solutions to life.

From Partnering to Strategic Alliances

IP is the key, but many end users don’t have the time, resources or in-house skills to create their own unique solution that gives them the business advantage they require.

As such, they are forging long term business relationships with technology service providers who understand their need for change, and develop specific IP or software which utilises public cloud services, embraces AI, and most importantly which solves a business or specific customer problem.

Public cloud providers also need these strategic partner alliances to ensure there is a shorter time to value in moving workloads to the cloud, and providing solutions that move beyond IaaS (Infrastructure-as-a-Service) to fully utilising PaaS (Platform- as-a-Service).

PaaS as the Basis for Digital Transformation 

We are starting to see the SaaS (Software- as-a-Service) players now extending into PaaS in response to customer demand.

Customers that are using a SaaS kingpin like CRM want to extend that platform into other use cases and requirements. It’s been a long time coming but as the world moves to a cloud-first strategy, the complexity in integrated public clouds is driving companies to explore PaaS.

Secure Cloud Services & Cyber Security get Board Visibility

Cloud services have been a safe bet in the Boardroom in recent years, but now the question is, are they truly secure? Decisions to utilise cloud services have been a relatively easy Boardroom decision, due to their known cost and agility. But with more and more high-profile data breaches, questions are now being asked around cloud security at a Board level within businesses.

The damaging nature of cyber-attacks is now clearly in the line of sight of Board members. GDPR will also raise more questions at this level, making cyber security in the cloud a Board level priority.

Businesses are pressing ahead with their digital transformation plans, despite fears of being hit by a cyberattack or data protection regulations. This is according to a new independent research report from Advanced, which questioned over 500 senior executives in UK organisations about their attitudes to using the cloud as part of their digital transformation plans.

Most organisations surveyed are concerned about security (82%) and data protection (68%) in the cloud but, perhaps surprisingly, 80% of them are not put off from adopting the cloud following recent high-profile cyberattacks such as WannaCry. A third (33%) of organisations admit to being experienced in the cloud and continue to consider it for all new projects, while 37% have recently launched cloud computing projects for the first time.

Although positive, these findings should not negate the common concerns and challenges. The survey also found that businesses want better support if they are to execute their digital transformation plans effectively. Security is the biggest barrier, with 76% saying that governments should do more to protect businesses and their customers from a cyberattack.

Meanwhile, 82% of organisations want to see cloud providers do more to build confidence among those looking to adopt a digital transformation strategy, of which the cloud is fundamental. When asked what they look for in a provider, most say financial stability (69%), data held in a UK location (65%) and local support (58%) – above typical benefits touted by providers including scalability (46%) and the breadth of application offerings (38%).

Jon Wrennall, CTO at Advanced, says: “It’s encouraging to see businesses are undeterred from using the cloud, which is fast becoming the right choice for many to drive efficiencies, innovate and grow. Sadly we are seeing the same concerns around security and data protection reported over and over again. It’s right to be concerned about security; it’s time that all of us as cloud services providers take a reality check.

“As an industry and profession, we all need to proactively give clear guidance on security responsibilities and support organisations in being better protected, ensuring devices and applications are properly patched and secured – those writing the software are clearly best placed to provide this. With General Data Protection Regulation (GDPR) coming into force next year we also have a duty of care to provide clarity on how data is being stored and secured in the cloud.

“There’s still a job to be done in creating trust in the cloud and helping customers use the cloud in the right way for the digital transformation that’s right for them. Our survey shows most organisations want financially stable providers and prefer those that store data locally and offer local support; this will become even more pertinent as Britain leaves the European Union. They will trust the providers that offer certainty in an uncertain market and those with a vested interest in the UK and the cloud.”

The independent research was carried out following the results of the general election, during week commencing 12th June. Over 500 participants took part in the survey, which was carried out by Techmarketview.

(Source: Advanced)

Your company made the obvious move and migrated to the cloud – Amazon Web Services, Microsoft Azure, or Google Cloud Platform. Months later, the attractive glow of the move from CapEx to OpEx spend has been dimmed by the reality of increasing monthly cloud bills. As the CFO, you want to know what’s up.

This is a real challenge, according to the head of infrastructure at a mid-sized software company we spoke with recently. Let’s call him Steve.

“I need to reduce my AWS costs as quickly as possible,” Steve told us. “My CFO saw that our AWS spend started at $20k per month when we migrated last year. Now it’s over $100k per month, which makes it one of our biggest IT-related line item expenses. We’re under a direct mandate: We have to bring it down.”

The problem is clear. But how did it get so bad, so quickly?

 

Your infrastructure is probably exploding

“As we started to dive into it, we found that a large part of our cloud spend is wasted on idle compute services,” Steve said. “With the rapid growth in our AWS use, we didn’t have visibility and policies in place to govern and control costs. Our developers aren’t properly cleaning up after themselves, and resources aren’t being tracked, so it’s easy for them to be left running. It’s something we want to change, but it takes time and energy to do that.”

This is a familiar story for many enterprises, large and small, as they migrate to the public cloud for increased agility and to speed up product innovation. But sometimes, the other side of the “agility” coin is a lack of defined processes and controls, which leads to waste.

As Steve put it, “AWS built this awesome playground – everyone can play, but everything costs money.”

To that end, AWS is now a $14 billion dollar per year run rate business, according to GeekWire. This is partly from their rapid gain in customers – and partly due to each of their customers spending more and more each month in their massive playground. And Azure and GCP are growing triple digits year-on-year (neither Microsoft nor Google break out revenue from their cloud revenue).

Enter the problem of cloud waste – servers left running when people are not using them, such as at night and on weekends, oversized databases and servers not optimized for the applications they support, and storage volumes not being used or “lost” in the cloud. These are just a couple examples – there are many more.

 

Let’s break down the numbers to see how big the cloud waste problem really is. In 2016, the total IaaS market was $23B:

So, we calculate that enterprises can save up to $6 billion by optimizing their public cloud spend. By 2020, that number grows to $17 billion.

 

Get Costs in Control

There’s no need to wait if you’re the CFO. Go talk to your IT and Infrastructure teams and get tools and policies in place to control your cloud costs now:

 

For non-production servers, the simplest way to do this is with a scheduling tool that allows you to set automatic on/off schedules, like ParkMyCloud. It’s an immediate win: you can save 20% or more on your next cloud bill.

Talk to your Development and Operations teams today about getting cloud costs optimized and in control. It’s time.

For more information, please go to: http://www.parkmycloud.com/

As corporate accounting undergoes even tighter scrutiny, how can CFOs ensure transparency and accountability? Finance Monthly here benefits from special insight by Nigel Youell, EPM specialist at Oracle.

Tax reporting is rapidly climbing up the corporate agenda, with one quarter of C-suite executives saying that the issue comes up at board-level discussions more than once a month, up from just 5% five years ago.

Thanks to the globalisation of world trade and an increasingly complex array of national and cross-border regulations, companies have understandably put tax affairs under the spotlight. Complicating things even further is the public’s growing interest in corporate tax, which has led to a call for greater transparency into businesses’ tax reporting.

This shift has led to initiatives such as the OECD’s Base Erosion and Profit Shifting (BEPS) project, which aims to bring consistency to international tax practices. When BEPS comes into effect in early 2018, organisations will have to publically report in detail on their earnings in every jurisdiction in which they operate.

Finance leaders have always faced the challenge of balancing their fiduciary responsibilities to shareholders with regulatory compliance. In order to stay on top of changing regulations and stand up to increased scrutiny on corporate tax however, businesses need a new approach to reporting that is faster, more accurate and more transparent.

This will take a change in strategic priorities. Much of the money spent on enterprise technology in recent years has gone towards flagship systems such as ERP, yet many organisations still rely on manual data entry and spreadsheets for tax reporting. This approach is no longer suitable for the type of granular tax reporting that is now mandated by so many jurisdictions and cross-border authorities.

Businesses need accounting and reporting systems that can measure contributions in each country they operate in, and be clear about how they allocate costs across their organisation. They also need to be scrupulously accurate and transparent in their reporting. The risk of error is too high to work with spreadsheets quickly, and audit trails have become too hard to follow in many cases.

A technical fix for the exigencies of modern reporting

Automation is the key to helping businesses meet regulatory compliance obligations and satisfy shareholder demand for greater accuracy and transparency in their reporting. This is because automated processes provide a clear audit trail.

Also, because this added level of rigour makes it easier to keep track of what is going on, the entire reporting process is faster and businesses can keep stakeholders informed up to date on their activity.

A modern, automated reporting system consists of three core functions:

Consider a car factory in Sunderland that manufactures vehicles for the global export market. A breakdown of costs per car also needs to include the cost of keeping the lights on in the factory, of employees on the assembly line, and of the executive staff who run the operation locally.

We are undergoing one of the biggest overhauls to corporate taxation in years, and companies need a reporting infrastructure that is fit for purpose – not just to meet regulatory requirements, but also to ensure that businesses have the insight they need to run their operations efficiently.

The shift to cloud-based reporting has already begun to gain traction in the finance department, and as businesses look to adapt to a more transparent, regulated environment this shift will increasingly extend to tax processes as well.

On the importance of technology in the workplace, Finance Monthly hears from Gary Turner, UK Managing Director and Co-Founder at Xero.

Small business in the UK is booming, with 2016 accommodating the birth of 500,000 new businesses across the country. The entrepreneurial spirit in the UK is defiant in the face of an uncertain 2017, an attitude I am wholeheartedly impressed by. What makes each of these 500,000 businesses unique is that, with their start, a culture is born. This is naturally built around the entrepreneur’s style and impacts every aspect of the day-to-day work.

The development of culture is often overlooked, and more new business owners should take into consideration how they can mould a culture that will benefit both the company and the employees themselves. That’s why I believe a commonality amongst SMB owners should be to teach and offer opportunities for their employees to become fluent in technology. The business world is becoming increasingly digitalised allowing for a more efficient work process, as well as offering employees the flexibility to work online from anywhere. As such, I believe today and not tomorrow is the time to get the culture at your office to become tech savvy. Here’s why:

  1. Future-proofing your workers

First and foremost, the cloud is how almost all businesses will be working within the next 5 years. If your business is yet to be on the cloud, I recommend you search online or speak with peers on what software best suits your business needs, from managing payroll and employee time to invoices and balance sheets, cloud programmes are making the process incredibly simple. Getting your employees in the cloud will teach them skills that will pay dividends as they rise through the ranks in your business, and at which point they will become aware of cloud technology trends themselves and be making suggestions on moving the company forward.

  1. Number savvy will benefit you all

Alongside familiarising your staff with the cloud, you will need to teach them how to read and analyse the numbers associated with your business. Employees will have access to the data and be able to recognise the performance of the company, identify shortcomings and where to optimise potential as the software will offer insights. This in turn, will get your employees showing initiative – a skill that is invaluable and difficult to teach.

  1. Builds trust

Showing that you’re actively investing in your employees will help them believe that you’re there to help them improve and further their careers. A distant relationship between employer and employee will lead to a low staff retention rate and damage your company’s reputation for potential recruits. It also shows that you trust them with sensitive company data and, referring to my earlier point, will give them the opportunity to learn what makes a business tick and how they can act on their initiative to make suggestions based on the data provided.

  1. A shared level of understanding

It takes a unique personality to be an entrepreneur, you allow the pressure to rest on your shoulders and have careers dependent on your success. However, allowing your workers to operate on the cloud and work with you, it provides the opportunity for more opinions and insight. Sharing insight can offer perspective; this can lead to great success.

Cloud is now the mainstream, so create a culture where operating on the cloud becomes mainstream too.

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