Today, it’s almost taken for granted. According to a recent report by Leading Edge, 61% of business professionals identified hybrid working as critical to business success. And even in the financial sector, which is known for legacy systems and being slow to change, the idea of returning to pre-pandemic ways of working seems almost impossible, despite calls to return to desks.

A BBC survey found that 70% of people predict that workers would “never return to offices at the same rate”, with the majority stating that they’d prefer to work from home either all or some of the time. And for financial companies, the evidence that a ‘one size fits all’ approach is not equipped to deal with this growing need, is mounting. But while the workforce may have changed, many offices are still designed for their old ways of working, so it is up to businesses to keep up with changing employee expectations.  

The move to mobility

Laptops have unsurprisingly been the main device to work and collaborate for most employees in the move to mobility. Indeed, in the UK alone, laptop penetration rose from 47% in 2009 to 76% in 2021. In the world of hybrid working, with meetings being controlled via these portable devices, businesses will need to invest in solutions that allow for seamless connectivity between office and home, while simultaneously mitigating the security risks that come with it. The finance industry will need to ensure offices are well equipped for hybrid meetings implementing new software alongside updated Audio-Visual equipment to make collaboration easy and smooth.

Indeed, in the UK alone, laptop penetration rose from 47% in 2009 to 76% in 2021.

But what about security?

The other headache facing IT leaders are the security risks of a hybrid approach. While these risks are true for any sector, the confidential and highly sensitive data-driven nature of financial work makes security absolutely paramount. Early in the pandemic, we saw multiple viral videos of conferencing platforms being hijacked by pranksters – and amusing as this is, it is only the tip of the iceberg. According to Deloitte, cyber-attacks are becoming increasingly sophisticated, with those using unseen malware methods rising from 20% to 35% since the outbreak of the pandemic led to a change in working practices.

This is why a recent study by Gartner found that worldwide spending on information security and risk management technology and services was predicted to grow 12.4% in 2021 to $150.4 billion. And it is necessary too: a 2021 study by Skybox Security, found that 42% of UK financial services and law firms believe their cyber threat visibility and detection systems are inadequately equipped to manage remote employees. Legacy technology and broken processes tend to be the reasons given, but after a year of remote working, the call to modernise is becoming more urgent than ever. Leaders must prepare for the financial industry’s new normal.

The cost of security breaches that come from hybrid working

No matter whether the issues stem from a cyber security breach or a phishing attack, the impact can be far-reaching. And as financial organisations are often the most common targets for cyber attacks, the need to be hypervigilant is understandable. In the UK and Europe, as more people go cashless, PII (personal identifiable information) can be redirected via physical credit scanners or online payment forms and used for malicious activity. Banks that are taken hostage may have to pay hundreds of thousands of pounds to recover lost data, risking the trust of their customers and other financial institutions. They could also face fines and sanctions for breaching data protection laws, as well as having a negative impact on staff morale.

The rise of cyber and phishing attacks caused by mobility and human error

The sharp rise in the number of employees carrying their laptops from home to the office and wherever else they choose to work has seen a dramatic increase in cyber and phishing attacks over the last two years, with human error an increasing cause of data breaches.

Findings from Sophos revealed that even though the number of ransomware attacks has actually decreased over the past year, the average recovery cost has more than doubled to $1.85 million. The mobility of hybrid workers has prompted cyber criminals to shift their attention “from larger scale, generic, automated attacks to more targeted attacks that include human hands-on-keyboard hacking.”

Ransomware is not the only threat, of course. Today, there is a wide range of attack methods that need to be considered and resisted. SonicWall’s Cyber Threat Report recently recorded 56.9 million IoT attacks, 5.6 billion malware attacks, and 4.8 trillion intrusion attempts. This helps to explain why, according to Dynabook, over one-third of Europe’s IT leaders pinpointed network or device security as the most difficult element of their IT infrastructure to manage during the pandemic.

Securing the mobile workforce

So how can organisations secure the data of their increasingly mobile workforce? It begins with protecting the front-line by equipping employees with robust devices that meet the high level of security required today. Biometric tools including two-factor authentication offer a strong first line of defence, for example, combining fingerprint and iris detection to restrict entry to a device.

Yet it’s also important to ensure devices feature deeper in-built security measures from a software and firmware perspective too, such as Trusted Platform Module 2.0 for enhanced encryption. Meanwhile, for IT teams, remote access control is essential so that strict permissions can be put in place, enabling them to manage which employees have access to certain files. From a policy perspective, we’re seeing more organisations take a zero-trust approach too – something which is particularly important in today’s hybrid environment to manage not just employees but partner organisations as well.

Business benefits of mobile secure client solutions for a mobile workforce

Beyond in-built security, mobile secure client solutions can also help to eliminate a significant cause for concern in terms of the device threat by adding boot-level security – something which is particularly important as we see the rise of hybrid working models.

In addition, by removing data from the device, storing it centrally and then making it accessible via a Virtual Desktop Infrastructure (VDI), such solutions provide the perfect balance of ultra-secure and ultra-productive mobile working. Employees can get on with their work, wherever they choose to be, knowing that the risk of data breaches through malware or lost and stolen devices has been nullified. With cybersecurity rated as the 2^nd highest source of risk in Gartner’s 2021 Board of Directors Survey, we can expect to see these mobile secure client solutions rise in popularity.

One thing is certain – this is a problem that will not be going away any time soon. With technologies advancing rapidly and hybrid working increasingly looking like the permanent norm, the threat of security breaches will continue to grow. IT leaders must embrace new solutions now to protect against this ever-increasing threat.

The finance sector is extremely vulnerable to the rising number of cyberattacks, with The 2021 Cybersecurity Census Report finding that finance companies in the UK suffered an average of 60 cyberattacks in the last year. The number of these attacks continues to increase, and finance companies need to employ strategies to keep their data and networks secure from attackers.

For obvious reasons, the finance sector is an advantageous target for cybercriminals, due to the wealth of data contained within these organisations and the fact that attacks can target banks processing systems to disrupt critical financial transactions. Nonetheless, the volume and severity of the attacks we’re seeing is cause for immediate action, with mid-sized financial services organisations worldwide spending an average of over $2m recovering from ransomware attacks. 

Aside from causing disruptions to financial services capabilities and potentially substantial financial losses, financial services organisations that are victims of a cyberattack also stand to suffer significant reputational damage. For example, recent Mimecast research found that consumers think that brands should be responsible for compensating victims of scams, with 39% of consumers saying that not taking responsibility for potential customers being deceived would put them off the brand. Notably, 65% of UK consumers would stop spending money with their favourite brand if they fell victim to a phishing attack involving that brand.  This is increasingly important for the financial sector, as online banking is the second most trusted sector by consumers in the UK, but is the most leveraged sector for cybercrime, with 28% of consumers receiving phishing emails from brands in this sector.

The key here is to move at pace, and employ a security model which helps organisations control access to their networks, applications, and data, enabling the financial services sector to remain secure in the face of sophisticated attacks.

The ‘New And Improved’ Cybercriminal

The pandemic has driven more criminals online, as they have adapted to the new remote/hybrid working world by exploiting improperly secured VPNs, cloud-based services, and unprotected emails. Inevitably, external data breaches are now a matter of when and not if. On top of this, a recent report found that the LockBit 2.0 ransomware gang is actively recruiting corporate insiders to help them breach and encrypt networks.

These criminals invest a lot of time in researching organisations and employees, asking questions such as: has someone been passed over for a promotion? Is someone being underpaid? Has someone received a negative performance review? Using this research, and spam/phishing attacks, criminals identify weaker links for exploitation. Criminals are then in contact with corporate insiders, asking them to install ransomware, collect information, plant malware etc. This is creating a perfect storm for many financial services companies.

The Zero Trust Model 

With this combination of internal and external threats and the risks of significant financial and reputational damage increasing, the financial sector might fear it is fighting a losing battle. But there is a model that can be adopted to keep their data and networks secure from attackers: Zero Trust. 

The Zero Trust model is founded on a simple idea, “trust no one and nothing,” this essentially means that the zero-trust security framework gets rid of concepts such as trusted devices and trusted users.  In practical terms, organisations that adopt the Zero Trust model put policies in place to verify everyone and everything, regardless of whether they are internal or external. The model provides a mechanism to secure new ways of working in the cloud while combating the risk of an insider breach. The application of a Zero Trust model is especially important when it comes to insider threats since it is this trust that hackers seek to exploit.

Zero Trust is a great way to address the challenges caused by the rapid transition to an increase in cloud spend and remote working, as it removes implied trust, with each access request needing to be verified, based upon strong authentication, authorisation, device health, and value of the data being accessed. This is one of the most effective ways for organisations to control access to their networks, applications, and data, leading to more security for the enterprise.  

Making It Seamless

One factor that must be taken into account is that, in order to be successful, the integration of zero trust systems must be as seamless as possible, otherwise complexity is re-introduced into the enterprise. Organisations need integrated solutions that optimise their current and future state of security. Avoid solutions that operate in isolation, and instead opt for platforms that integrate to form an ecosystem to improve visibility, enhance control and provide a robust set of orchestration capabilities. Ultimately, zero-trust security is more of a security model than any one tool, making it difficult to implement, especially when the infrastructure it’s being applied to wasn’t designed for new models, as there is no simple way to retrofit some systems for zero trust. For example, as a basic requirement, zero trust relies on multi-factor authentication, which many financial services may not currently have in place.  

As well as this, the financial service industry has not fully migrated to cloud solutions and large amounts of technical debt have been incurred over the years of deploying new applications coupled with digitalisation. With more than 90% of the UK’s financial firms still relying on legacy tech, business-critical information is currently continually stored on out of date software. This equipment is often not compatible with up to date software and provides several opportunities for “backdoor” access. Companies that use older legacy applications may have trouble implementing them on zero-trust networks and for this new solution to be effective, companies will also need to invest in employee training. Training for employees alongside new security solutions is the only way to minimise human error, raise awareness and truly increase cyber-hygiene across a whole organisation. 

While it's a long process, which may require the replacement of legacy equipment, and which demands inward reflection and internal reshaping, the finance sector needs to make cybersecurity a top priority. Otherwise, there is a real risk that even unsophisticated cyberattacks will cause serious damage and undermine organisations. Using new types of tools and capabilities, such as the zero-trust model, the finance sector can have a safer framework in place to help organisations tackle persistent security challenges, as well as mass remote working, allowing financial services to stay protected regardless of what comes next.

The past 18 months have brought unprecedented changes to the business environment and in this new world of hybrid working, businesses will need to start familiarising themselves with blockchain technology. This new way of working means that businesses need a certain level of flexibility, connectivity and speed from their communications providers, which is something that blockchain technology can help to provide.

The finance sector has already profited from the world of blockchain, with the technology helping it to carry out transactions in a cost-effective and secure way. The technology has also been developed across other industries, and now the telco industry can reap its benefits through its on-demand connectivity and transparency.

How Can Blockchain Transform The Industry?

Blockchain emerged at an increasing pace in the financial sector across banking, insurance and trade finance, as partners working together can use the technology to create a shared, distributed ledger that has a confidential merged record of company transactions. For the telco industry, not only will this improve efficiency, quality and speed for communications providers, it will also strengthen its global ecosystem and help to build the partner’s working relationships. 

And we’ve already seen how blockchain transforms the way that businesses operate. At Vodafone Business, we worked with partner communications providers PCCW Global and Colt Technology Services, and leading blockchain company Clear, to improve customer service. We are leveraging Clear’s solution to ensure real-time service between the partners’ inventories which allows timely and precise settlement.

Thanks to a more efficient and streamlined process from the partnership, we can make subsequent amends to services. With improved service provision and real-time alignment, there is also faster problem management between all partners who are also able to give quicker and more accurate quotes. This also leads to full transparency and traceability resulting in faster activation and quick delivery of international services. The technology optimises transactions such as quotes, orders, invoices and settlements and as there is no ‘central authority’ needed, there are lower costs and faster transactions.

Looking To The Future

For the telecoms industry, the blockchain innovation will play a key role in driving standardisation across the network for all partners. Now, establishing a fully digitalised quote to cash service delivery process is an attainable goal that will provide more flexibility around service agreements and help to settle them across all accounts.

Communications providers should continue to keep track of the progress and benefits of blockchain to establish new opportunities for their products and services and to continue to improve their customers’ experience. This decentralised approach will also help to cloudify the connectivity market, which will make on-demand services easier for customers to utilise.

Members of trade bodies, academia, and NGOs will make up the task force, known as the Green Technical Advisory Group (GTAG). The GTAF will be responsible for overseeing the government’s delivery of a “Green Taxonomy”. This common framework will offer comprehensible standards that lay out when a financial product or investment can be classed as environmentally sustainable. 

In recent years, green financial products have surged in demand, but this has also given rise to greenwashing within the financial sector. There are concerns that some green financial products fail to deliver their promises of environmental sustainability. These concerns are only exacerbated further by increased cases of allegedly green investment funds that are later found to support carbon-intensive businesses. 

 The government’s proposed Green Taxonomy aims to stamp out greenwashing within the sector while simultaneously making it easier for consumers and investors to understand the impact that a particular company or product is having on the environment. 

Ian Bradbury, CTO for Financial Services at Fujitsu UK & Ireland commented: “As financial organisations strive to provide great customer experiences, the emphasis must also be on how they align their services with customers’ ethical and social beliefs. What’s more, it’s an opportunity to position the business as a trusted pillar of society; empty promises on CSR are no longer enough. This is something Natwest recently demonstrated with its ‘green mortgage’, offering individuals who purchase an energy efficient property a preferential interest rate on their home loan.”

“Undoubtedly, environmental concerns resonate with large proportions of consumers who continue to champion climate change. IBM recently found that 90% of consumers feel that the COVID-19 pandemic affected their views on environmental sustainability. Now, the financial services industry needs to take these concerns as a serious priority,”  Bradbury said.

The past year has been one like no other for the UK. We are adjusting to a new way of life, having spent the best part of a year under pandemic restrictions. It was also the year that we left the European Union for good, after four years of political friction and confusion. These once in a lifetime events have understandably impacted our personal and professional lives. Financially, the effect of the pandemic has resulted in the prediction that a fifth of all small businesses will collapse in the UK, and recent news that we may be plunged into a double-dip recession suggests that we are not over the worst of it. Business leaders have had to adapt and re-adapt to survive the past year, and the world of work will look different as we move forward.

Brexit has also had an impact on jobs and the way we work. Alongside further economic uncertainty, there is set to be an increase in the difficulty of importing EU-based talent as Brexit brings in more stringent rules around work and immigration. While the rules are designed in part to allow highly-skilled workers the opportunity to come to the UK, they may be put off by changeable legislation and red tape, leading to talent shortages in key sectors.

The double hit of Brexit and coronavirus has already highlighted the importance of malleable work environments – businesses will only survive this period if they are truly flexible and willing to adapt. Research from Future Strategy Club shows that 29% of business leaders streamlined their teams during the pandemic, and thousands of businesses have given up office spaces as employees work effectively from home. Firms are having to adapt to new regulations and legislation, making way for a more flexible design, both in terms of physical space and headcount.

EY estimated that due to Brexit, £1.2 trillion in assets have been moved from London to the EU, along with around 7,500 jobs.

One way that business leaders are becoming more flexible is by utilising short-term, freelance talent, as opposed to hiring full-time, permanent talent for roles that may soon change or become defunct in such a rapidly changing environment. Often, these leaders don’t just need advice on how to see their firms through these unprecedented times but require a hands-on approach to guide them through. With new rules and restrictions in place as we leave the EU, a short-term, outside consultant can bring a fresh perspective to struggling businesses, and integrate a new, more flexible ethos to firms who are looking for the best way to accommodate new business models and legislation. In a time of economic turmoil and uncertainty, funds and resources may be low, utilising freelance talent also allows firms looking for specific talent to find it quickly and without breaking the bank.

However, finding the right talent for your company can be difficult. Many companies are hiring the same standard consultants and creatives from the same consultancies and agencies who use the same methodologies that have been used for the past 30 to 50 years - and are therefore getting the same solutions to their problems as their competitors and everyone else. Platforms such as Future Strategy Club have a curated selection of the most innovative talent in the world, available without the usual overheads and contractual entanglements that large consultancies and agencies wrap around their talent. These platforms allow businesses to directly access experienced individuals with many years' worth of skills to tap in to, having weathered the 2008 crisis, COVID-19, and now Brexit.

The freelance and gig economy works the other way, too, in that it provides a chance for those who find themselves furloughed or perhaps made redundant to launch their own business or at least the next stage in their careers. EY estimated that due to Brexit, £1.2 trillion in assets have been moved from London to the EU, along with around 7,500 jobs. Combined with increased job losses and furlough due to the pandemic, many people are likely to be uncertain about their career prospects. Those who may find themselves being made redundant or furloughed may choose to capitalise on their skills and past experience to launch a freelance career – as with kids and mortgages in tow, falling back to the bottom of the career ladder is not on the agenda.

Freelancing and the gig economy often get a bad rep. Freelancers have been excluded from the benefits of the permanent workforce - including workplace culture, socialisation and support networks - and it is clear that the perception of freelancers and skilled consulting work has long needed an overhaul. Fortunately, this appears to be changing.  The rise of co-agencies, such as Future Strategy Club, provide freelancers with resources, learning and development opportunities and a network, making freelancing a viable long-term option – one that can be done for an entire career, as opposed to a placeholder between jobs.

It’s clear that the world of work going forward is going to look very different. 2020’s turbulence is set to carry on over to 2021, and businesses and talent that can utilise this to their advantage will thrive. Businesses who open up to hiring freelancers are more likely to adapt and may even come out of this period stronger than they were before, and entrepreneurial freelancers have the opportunity to work for themselves, choose their own working environment and gain true security from their own knowledge and skillset.

The deal that the UK Government secured with the EU, right at the end of the tumultuous year that was 2020, came as a surprise, and some considerable relief. At Amaiz, we spent part of December looking into the impact of Brexit, particularly on financial services and published a report on our findings, so we were probably more aware than most what the deal needed to deliver for FinTech.

We had years to prepare for Brexit. Whilst some stakeholders needed some convincing that the referendum in 2016 represented a final decision that couldn’t be reversed, the rest of us knew that somehow, the Government would feel compelled to deliver on the result. One way or another we would be exiting the EU so only the foolhardiest of companies would not have prepared. The results of our research in December showed that people were as ready as they could be:

• Nearly half (49.2%) of company leaders had reviewed new regulations set to take force on 1 January 2021 and made changes to ensure their companies will meet them.
• Only 17% of companies said they had failed to prepare.

The changes that company leaders believed would have the most impact were changes to regulations (37.4% of respondents said this was a concern), increased costs of doing business (37.2%), and reduced access to suppliers (35.5%). Overall, 57% of companies believed that Brexit will have some negative impact on their business and some (6.6%) believed it will destroy their business.

Size was a big factor in how prepared companies were for the changes – with smaller companies employing between 1 and 10 people concerned about increased costs (45.7%) and those with staff of between 11 and 50 about taxes and VAT (41.3%).

The challenge in December was the uncertainty that remained right up until the deal was announced. How can you prepare effectively when you don’t know what you’re preparing for?

Financial services represents 12% of the UK’s GDP and our vibrant FinTech startups and smaller businesses are a key part of that. It had been a success story, that has taken advantage of the cultural, regulatory and geographical advantages that the UK enjoys. It is the startups that drive innovation in the sector and create the global players of tomorrow.

In December, the financial services sector was preparing for a no-deal Brexit, as that appeared to be the most likely outcome. The larger companies had already registered companies and offices within the EU so that they could continue trading there, whatever deal was or wasn’t struck. At Amaiz, we were in a position to take this route ourselves.  However, this was not an option for much of the vibrant FinTech community, it was not within their resources, particularly as there was no certainty on what Brexit would mean.

Of course, at the same time as this Brexit uncertainty, our FinTech startups and smaller companies were battling with the impact of the pandemic. The FCA (the Financial Conduct Authority) and FSB (Federation of Small Business) both published figures in January that show the alarming impact of the pandemic on SMEs. The FCA found that 59% of smaller financial firms expected that their profits would take a hit this year[1]. The FSB found that just under 5% of smaller companies expect to be forced to close within 12 months, the largest proportion in the history of the Small Business Index and could mean that 295,000 companies will go under[2].

Brexit, therefore, came at a critical time for all companies and most SMEs in December (62.4%) told us that the pandemic was likely to affect them more in 2021 than Brexit (17.3%).

If FinTech is to survive the many challenges that this year brings, the Government needed to deliver a deal that gave financial services the ability to operate across the EU. That didn’t happen.  Instead, the Brexit agreement created a distortion in the market that threatens UK FinTech still further.

Following the deal, EU FinTech companies can operate in the UK, and there are many companies eyeing up the UK market, particularly FinTech companies based in Amsterdam and Germany, so our FinTech will be in competition with them. However, as e-passporting has not been agreed, our UK companies cannot now operate in the EU. I have seen no evidence that the Government has recognised this as a priority issue to resolve. I urge them to do so as the consequences for the sector and the UK economy will be enormous.

________________________________________

The report, Brexit Brink: Are British SMEs about to fall off the edge of Europe – or building new bridges? is based on a survey of SMEs across the UK and is free to download from www.https://journal.amaiz.com/amaiz-guide/.  

[1] https://www.reuters.com/article/us-health-coronavirus-britain-markets/up-to-4000-financial-firms-could-fail-due-to-covid-says-uk-regulator-idUKKBN29C0R7?edition-redirect=in

[2] https://www.fsb.org.uk/resources-page/at-least-250-000-uk-small-businesses-set-to-fold-without-further-help-new-study-warns.html

Below Simon Wood, CEO at accredited LEI issuer Ubisecure, discusses with Finance Monthly the significance and function of LEIs, what they are and how they work, but more importantly how the financial sector can work to reduce the risks involved in managing LEIs.

Comprising of 20-character alphanumeric reference codes, LEIs are designed to identify distinct legal entities and provide a free, publicly available, verifiable source of ‘who is who’ (organisation identity) and ‘who owns whom’ (organisation group structures). Crucially, by utilising LEIs, companies of all sizes can identify themselves as a true legal identity and trade globally.

LEIs offer many advantages to the banking industry, ranging from significantly reducing costs in customer onboarding to establishing transparency and enabling trust in transactions. Indeed, McKinsey & Company, along with the Global Legal Entity Identifier Foundation, recently found that LEIs could yield annual savings of over U.S. $150 million within the investment banking industry alone.

Despite these benefits, however, if LEIs are not managed correctly the potential risks could result in harmful ramifications, including non-compliance fines and negatively impacted reputations. With that in mind, it is important that the banking sector not only educates itself on these risks, but that it also acts to deploy tools and strategies to manage LEIs safely and effectively.

The role of LEIs in banking

The value LEIs bring to the banking sector can be categorised in two key ways – by enhancing transaction identification processes, and by simplifying the process of tracing information about a transaction.

LEIs are an ideal mechanism in situations where an identification process is required for payments. At the same time, they allow financial institutions to optimise the efficiency of their systems through automating and augmenting verification methods.

LEIs are an ideal mechanism in situations where an identification process is required for payments. At the same time, they allow financial institutions to optimise the efficiency of their systems through automating and augmenting verification methods.

Where payments need to be routed to the correct entity in a large corporate group, LEIs serve an equally essential function, making all members of the transaction aware of who owns whom via LEI level 2 data. They also allow economic crime and identity fraud to be quickly pinpointed and averted.

It’s therefore unsurprising that the SWIFT Payment Market Practice Group is a key advocate of LEIs, and has formally declared the ‘huge potential’ they offer for improving payment processes.

Moreover, the cost of customer onboarding can also be significantly reduced with LEIs as they standardise one comprehensive identifier for KYC/AML processes. In fact, recent research from McKinsey & Company suggested that by using LEIs to support all stages of the ‘customer management lifecycle’, the banking industry as a whole could save around U.S. $2.4 billion a year.

LEI management considerations

With ISO 20022/SWIFT becoming the global standard for financial transactions, there is a strong push for the inclusion of LEIs in payment messages. Consequently, LEIs are set to play an even more fundamental role within banking over the next year – so it is increasingly vital that they are managed in a secure and efficient way.

This involves ensuring that workflows and systems are able to obtain LEIs as required, and also that they don’t lapse. Ultimately, a host of new risks are introduced when LEIs are missing, incorrect or out-of-date. The implications can be severe, resulting in held-up trade and potential non-compliance fines.

Organisations are required to acquire and uphold LEIs in line with specific regulations – such as MiFID/MiFIR in the EU for example. If this doesn’t happen, then trade will be delayed and transactions frozen until the issue is resolved. For this reason, LEIs should be issued at the earliest stage possible to avoid payment workflow delays and disruption down the line.

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Mitigating the risk

The first step around countering LEI risk is to ensure that the relevant staffers are fully aware of the consequences that come with lack of LEI preparation. With this, its essential that strategies are put in place to provide the necessary education.

In practical terms, employing a robust LEI issuance and management solution can help to reveal the existence and status of all current LEIs within an organisation’s internal and external groups. This also helps to provide an overview of all the LEIs in play within a single view, so financial organisations can easily identify and issue LEIs to anyone with missing identifiers.

By automating the LEI issuing and renewal processes, banks can significantly cut down administrative burdens, while simultaneously guarding themselves against the risk of lapses or fines from regulatory breaches.

As LEI use cases are set to explode, there’s no question that they are the future for driving progress within banking. Yet although the benefits are significant, the industry must also be aware that the potential costs of lapsed, missing or incorrect LEIs are also considerable. To fully reap the rewards, then, implementing systems and processes to manage them effectively is vital.

QuickQuid, the UK's largest remaining payday lender has revealed that it will close down, with US-based owners, Enova, stating that regulatory uncertainty being the key reason for their decision. Whilst the UK payday lending market has taken advantage of the most vulnerable consumers for too long, a question mark looms over the lending industry in the UK.

FairMoney.com have unveiled that 10.5 million Britons are in the worst financial position ever, with 53% stating that they have a weekly disposable income of less than £0. With the continual failings of the peer-to-peer market, and the long overdue closing of payday lenders in the UK, Britons need access to fair finance. Businesses such as FairMoney.com provide valuable consumer services by providing comparisons for a variety of loan sizes, with the most accommodation interest rates.

Dr Roger Gewolb, Executive Chairman and Founder of FairMoney.com, has commented on the closure of QuickQuid and provides financial advice for those 10.5 million Britons experiencing their worst financial position: “Both the payday loan industry and the relatively new 10 year old peer-to-peer lending industry are vital for consumers, especially that segment of the population that cannot easily obtain credit.

“The excesses and exploitation of the payday loans industry were finally curbed by legislation in Jan 2015, in part due to FairMoney.com and the Campaign for Fair Finance’s efforts, and the rates now charged and lenders’ terms are now fairer, even though this has caused some 70% of the industry to go out of business.

“In the same way, we want the P2P lending industry to survive and prosper, and have no more of these dreadful, drastic, dramatic failures, for the people who cannot readily get money from the banks and also for investor/depositors with extra cash who can get a higher interest rate than what is available from the banks, all as originally intended. I would not be surprised if a major P2P platform collapsed before Christmas, highlighting the risks that investors and consumers could be undertaking. Proper regulation and supervision by the Bank of England will ensure no more failures and that the industry can be properly realigned, hopefully without a huge chunk of it disappearing as with payday.”

Here Craig Naylor-Smith, Managing Director of Parseq, explains why financial services businesses cannot afford to stay complacent with the prospect of GDPR fines lurking over their shoulder.

In July, the Information Commissioner’s Office (ICO) announced its intention to fine British Airways £183.39m following a cyber-attack that exposed the details of almost 500,000 customers – the first fine to be publicly announced under the GDPR. The very next day, the ICO announced a second prospective fine of £99.2m against Marriott International following its own hack.

For those in the financial services (FS) sector, the ICO’s actions will have been a reminder of the consequences GDPR non-compliance can bring. Under the legislation, businesses can be fined the equivalent of up to €20m, or four per cent of their global turnover, whichever is greater.

The wealth of personal data held by FS firms of course means that the sector will be under particular scrutiny from both the regulator and the wider public. Yet, our own research has shown that many in the sector have struggled to handle a rise in personal data access requests from their customers and employees in the year since GDPR came into force – a situation that could put them at risk of feeling the ICO’s sting.

Challenges ahead

Under the GDPR, individuals can submit data access requests to receive a copy of personal data organisations hold on them and information on factors such as why their data is being used. They can also request that their personal data be erased. In most cases, organisations must respond within just one month.

Our research – conducted just after the GDPR’s first anniversary – found that more than two thirds (68%) of UK FS companies have seen a rise in data access requests in the year since the GDPR’s introduction in May 2018.

Of these, almost nine in ten (85%) had faced challenges in effectively responding, citing cost (57%) and complexity (48%) as their primary barriers.

Alongside these factors, more than a third (35%) pointed to a reliance on paper documentation as an obstacle.

With this in mind, a potentially effective solution for the sector as it addresses its compliance challenges could be found in greater digitisation – ensuring that the paper documents they hold containing personal data are digitally accessible.

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The FS sector has always been quick to adapt to consumer demand for digital solutions and capitalise on the opportunities that digital technologies can offer.  

Steps for success

The FS sector has always been quick to adapt to consumer demand for digital solutions and capitalise on the opportunities that digital technologies can offer.

Despite this, we found that only five per cent of financial services businesses had digitised all of the paper documentation they held in the year after GDPR’s introduction – a situation that hasn’t improved from the 12 months before. When asked why not, our respondents most commonly cited complexity (39%) and a lack of time (37%).

While these issues are understandable, they should be carefully considered in relation to the benefits that digitisation could offer.

Digitisation can help firms more quickly access personal data as and when it’s needed, helping to boost overall response time – an important factor given the GDPR’s time constraints. Meanwhile, investing in technologies such as automated scanning and data capture systems can help reduce time spent on administration, freeing-up valuable staff resources for other tasks.

And there are options to sidestep the issue of complexity. At Parseq, we deploy cutting-edge technologies such as optical character recognition and Robotic Process Automation (RPA) to digitise 25 million paper documents every year for our clients. This can help them build secure, searchable online archives of their documentation, enabling them to be on the front foot when it comes to quickly accessing and managing their documentation while offloading complexity to us, and offering savings in terms of cost and time.

GDPR is now firmly bedded-in, and the UK’s FS businesses must act to ensure that they are fully able to comply. Reducing a reliance on paper documentation through digitisation can help them more effectively respond to data access requests, ultimately reducing the risk of incurring the ICO’s wrath and being slapped with a heavy fine.

Profile Pensions has investigated how employer contributions to pensions vary based on industry and gender and which sectors offer the best pension planning with high contributions from employers.

The Best and Worst Industries for Employer Contributions

The financial and insurance industry has been revealed as the most advantageous option for obtaining support. Although, as a sector renowned for its remunerative staff benefits, it’s no surprise that employer contributions are at an average of 9.5%. The education industry also fares very well in terms of pension options, with teachers receiving a rewarding 9.3% average contribution. This is followed by the electricity, gas, steam, and air-conditioning supply industry, however, this is significantly lower than the prior two with average contributions of only 7.1%.

At the other end of the scale, agriculture, forestry and fishing jobs offered the minimum legal contribution of just 2%, making it them worst occupations for creating a satisfactory pension pot. As an industry which is also climate dependant, this further defers individuals seeking a financially secure retirement after an unpredictable career. The accommodation and food services sector received a similarly low employer contribution of just 2.1%. While the arts and entertainment industry had the third lowest employer contribution, where it reaches only 2.5% on average. Although as a notoriously competitive industry, it’s anticipated that employers can get away with such a low contribution and a major factor to consider when navigating the risky world of entertainment.

Not All Pensions are Created Equal: The Gender Gap

Gender stereotypes still exist across industries with men receiving an overall higher contribution rate than women, at 4.6% compared with 4.4%. Education, as a female dominated industry, was the only industry where women outperform men in terms of employer contribution, where they receive 1.4% more annually. These high pensions also mean that teachers are likely to fare better in retirement than those in typically high-earning careers like real estate or finance. In technical areas, men acquired higher contributions and in the electricity, gas, steam, and air-conditioning supply industry, men had an employer contribution of 7.4% compared with 4.2% for women.

When looking at the gender differences, it’s clear an effort to increase the employer contribution in the male permeated professions should be made in order to incentify women to pursue these types of careers. Generally we know women are more likely to have lower incomes and more interrupted careers as a result of their caring responsibilities. Ensuring the pension contributions doesn't penalise them is as much of an organisational culture issue as it is a government policy issue.

Interested in Better Contributions? Here are the Jobs and Salaries Available in These Generous Sectors

We have crunched the numbers on the jobs available and average salaries for the most generous industries. The education industry has 102,805 jobs available in the UK, making teaching the most in high demand profession. When combined with the competitive employer contribution, it’s one of the best options for graduates seeking stability when finding a job and creating a secure retirement package. On the other hand, the administrative and supportive services sector has the lowest average salary bracket, equating to only £544 in contributions each year; an unattractive choice in terms of wages both during and post career.

The mining and quarrying industry offers the most enticing average compensation for it’s workforce with an annual salary of £39,51, although has only 2404 available positions in the UK each year. Similarly, the agricultural, forestry and fishing sector has an average income of £29.451. However it has the fewest number of jobs available and lowest employer contribution compared to any other industry, making it a very risky option in the long term.

With a lack of time putting pressure on workforce health and productivity, maintaining a healthy work/life balance can be tough. 

Jasper Martens, CMO of PensionBee shares with Finance Monthly three top tips on how SMB owners in the financial sector can support their workforce to ease time restraints and overcome a hustle and grind mentality.

1. Quit working the weekends

UK-wide, people are working longer hours and longer weeks, and while three out of five financial sector leaders started their small business for a better work life balance, little over half actually feel like they get it. Almost half of small business owners in the sector say that they work through holidays and their annual leave, more than any other sector.

Finding ways to free up weekends and holidays for the sake of health alone is an admirable goal, but it inevitably conflicts with other business goals that had put pressure on time and deliverables in the first place. Some of our fintech peers hold the belief that people should work seven days a week and increasingly long hours. We’re the opposite – when it comes to hustle and grind, our focus is on looking at the most time effective way to get the job done.

As a small customer-centric business, we do what is necessary to keep our customers happy and find that automating work flow saves a lot of time. By automating parts of the everyday, we’re able to spend on growing the business and improving our service. There’s something to be said about the industry on a whole that the financial sector on average feels more strongly than any other sector that digital transformation has a positive effect on their business.

2. Ditch the time-sinks

Admin is necessary, but often a huge time-sink. How can this be cut down? It’s a question you’ve most probably asked yourself to no avail - but there is a way.

Two thirds of financial sector leaders feel that Cloud based technologies are a necessity when it comes to time management. For us, it’s about automating reoccurring paths and connecting customer touch points. Putting time into understanding, tailoring and using a good CRM to get all the relevant information in the right place, in the right order and accessible to use, will ultimately return more time in the future

As companies grow, processes need to evolve and be flexible to meet new demands. Out-of-date processes only hinder growth and ultimately eat away at time that could be better spent elsewhere.

3. Listen to your team

As an SMB you’re in a great position to address issues of burnout or stress amongst your workforce, it’s a force for good that we can communicate with each employee on their individual needs.

We're tripling our size every year, faster than we anticipated, and with that success comes a need for a lot more thinking about the way we work as a company and especially on how we support our employees. As a small business it is tough because you just need to get the job done, but that mentality can also lead to higher stress levels and presenteeism. We have to pay attention to people, and talk openly about personal and mental health.

Time will always be a limited resource, and the pace of modern business is only likely to increase in the future. Yet, mental health now accounts for over half of all working days lost due to ill health in and is the most prevalent reason for sick days in the UK. Now, more than ever, we need to address the time pressures impacting on employees to provide support and mitigate more damage to employees and small businesses in the financial industry.

Research from AVORD – a revolutionary new security testing platform that launches today – reveals 95% of businesses in the financial sector have seen an increase in the number of data breaches over the last five years. And as a result of the growing threat to mobile devices, more than half (52%) are now investing more in identifying and protecting against app-based threats.

Opportunistic multi-national consultancies are being blamed for inflating the price of security testing in the UK, with many financial services businesses being charged inflated prices to conduct tests on their critical assets.

Consultancies taking advantage

Today’s findings put the spotlight firmly on the security testing market, which is dominated by consultancies who provide services to businesses, sometimes at twice the daily rate of an independent tester – often referred to as ethical hackers. With 76% of businesses claiming the cost of testing is too expensive, there is a clear demand for change.

More than three quarters (79%) of businesses in the financial sector currently outsource the security testing on their critical assets. The need to use consultancies is being driven by a skills shortage, with many (41%) revealing that they don’t fully possess the in-house, employee skills and knowledge to carry out security testing.

More than three quarters (79%) of businesses in the financial sector currently outsource the security testing on their critical assets.

A surge in cybercrime

Worryingly, the financial sector was subject to the most security breaches - of all surveyed industries - last year, with two in five (41%) suffering from an attack that directly hit their bottom lines, lost them customers and damaged their brand reputations. Of those hit by a cyberattack, 77% reported that the breach occurred partly as a result of issues with the security testing process.

Over the past five years, the majority of companies have seen a major increase in the number of data breaches: 29% reported an increase of between 11% and 20%, while more than two in five (44%) reported up to 10% more data breaches.

The true cost of cyberattacks

As new emerging technologies are deployed, and applications increasingly underpin core business processes, firms across the UK claimed that cybercriminals are creating new ways to exploit vulnerabilities, which is putting increased stresses on them at an already challenging time.

The impact of breaches in the past 12 months has been wide spread. 84% of those affected reported losing customers, while almost a half (48%) had to pay legal fees and 58% experienced reputational damage. In addition, nearly seven in 10 (68%) were hit by fines from regulators.

(Source: AVORD)