Finance Derivative Magazine Issue 8

ISSUE 8 | 2023

Finance Derivative Awards Submit your nomination now to awards @financederivative.com

CEO and Publisher Mehtab Chisti Editor Mara KI Head of Distribution Stefan Stavic Project Manager Emma Bakker Business Consultants Lena Thomas, Aaron Menon, Blair & Allan Mendez Business Analyst Rachel Thomas, Amalia Rubio Graphic Designer Sachin MR Digital Marketing Mithun Gowda Web Development and Maintenance Nesar Kanachur Advertising Phone: +31208943644 Email: info@financederivative.com FM. Publishing Tt. Vasumweg 32 B10 1033SC, Amsterdam Netherlands Phone: +31208943644 Email: info@financederivative.com Finance Derivative is the trading name of FM. Publishing Company Registration Number: 71674233 VAT Number: NL002483895B26 ISSN 2666 6715 Image credits: https://www.istockphoto.com/ https://www.rawpixel.com https://pixabay.com

Finance Derivative Awards is established with the aim of honoring excellence in performance and rewarding Companies across different domains of business &

FROM THE CEO Dear readers, As we enter the new year, the global economy is showing signs of recovery from the pandemic-induced slowdown. The stock markets have been volatile, but the overall trend has been positive.

While there remains a nervousness around sharing of personal information with third parties, there are many benefits that Open Banking provides across multiple industries. However, the real and transformative potential can be found in the lending industry.

For some time now, the ever-increasing trade finance gap has been top-of-mind for asset originators, institutional investors, tech solution firms and industry leaders alike. Trade finance is critical to helping businesses including SMEs produce and move goods across markets, and in the creation of jobs, products, and economic growth globally.

Many countries are looking to carbon markets. Carbon prices have weathered a global pandemic and serve as a natural hedge against As carbon-consciousness continues to grow, carbon market infrastructure is developing quickly. Let’s have a look at all these inside Hope you will enjoy reading this issue of Finance Derivative.

financial world.

Our award honors companies and their key players who have performed extraordinarily well and who strive for fineness & provide a platform for recognition.

Check our online publication at

www.financederivative.com

Wishing you all great business and success.

Enjoy!

Mehtab Chisti CEO

CONTENTS

6 62 56 FINANCE:

BANKING:

10. ChatGPT and the future of finance: How AI is revolutionising

14. The journey to n

financial services

16. The future of financial services is in adaptation

industry

28. A wealth of possibilities: The rise of AI in financial services

52. Reasons to be c

35. These are the key trends driving change in money remittance

56. The new ways o

40. What needs to be done to address the cybersecurity skills gap?

50. Strengthening Supply Chain Security in Finance

BUSINESS: 20. Digital Trust in a New Era: Building and Safeguarding with Zero Trust Frameworks

24. The evolving role of the CFO

Page No 4

36. The transforma

narrative

TECHNOLO

18. How to navigate 26. The Power and

38. A boom too soo

42. What has a dec taught us?

18

12

10

54

52 32

46

28

26 54. Technology is a non-negotiable in closing the trade finance gap

net zero: navigating carbon emissions markets

62. How cybersecurity is set to evolve in 2024

ative power of Open Banking in the lending

cheerful about retail banking tech in 2024

of mobile banking: Understading the security

OGY:

e generative AI's data protection blind spot Potential of AI to Improve Customer Experiences

WEALTH MANAGEMENT: 6. Navigating the Future: The Rise of Organisational Fluidity in Capital Markets Firms

12. Getting Closer to the Modern Consumer with Embedded Insurance 32. Exploring the impact of regulatory measures on insurance providers

58. What’s to Come for Travel Insurance Consumers in 2024?

on: What’s next for fintech in 2024?

cade of digital transformation in property law

SPECIAL FEATURES: 44. Finance Derivative || Global Award Winners 2023

Page No 5

Wealth Management

Navigating The Future:

The Rise of Organisational Fluidity in Capital Markets Firms

T

he demands for remote work flexibility in capital markets firms have taken on a new urgency in recent years. As professionals in this field navigate the intricate landscape of deals, mergers, and acquisitions, they find themselves in a high-stakes environment where access to critical data and services from various locations is paramount. Capital markets roles often entail long hours and a 24/7 need for technology to support them. Decisions need to be made quickly, and events can unfold rapidly, so the swift retrieval of information and rapid responses are vital. Deals in this industry can materialise with lightning speed or be worked on extensively over long periods of time – so keeping records of why and how decisions were made can provide an ‘organisational memory’ for both business and regulatory reasons.

Page No 6

Wealth Management The regulatory landscape has undergone major changes, and capital markets firms are under increased scrutiny. This scrutiny extends beyond regulators, as stakeholders expect a high quality of cybersecurity when such large sums are on the line. It's no longer a matter of merely safeguarding data during critical moments; securely sharing information with external parties has become a constant concern. In this industry, maintaining an uninterrupted flow of information is a strategic imperative. Effective communication and sharing of data are essential not only for safeguarding assets but also for creating business value. Organisational fluidity was already a key part of capital market operations, but the demands on teams are ever-increasing – and technology needs to bear the load.

The pandemic opened up opportunities for a more global and interconnected workforce; now, businesses have to support their fluid and dynamic organisations by building the right operations to cope with the new reality of hybrid work. New challenges present new opportunities for technology to find solutions, and organisational fluidity is just such a challenge.

Organisational fluidity challenges and how to overcome them 1. Data Security and Accessibility Capital markets firms hold a large amount of highly sensitive financial and personal data in the business. Therefore, ensuring that relevant data is safe, available, shareable, and retrievable is paramount for them. The reputational and financial damage of a data breach can be significant, particularly for smaller capital markets firms. With a workplace dispersed across a region, country, or the world only increases this challenge. Organisational fluidity demands data be accessible to the right people at the right time without compromising security. In a fluid and multinational business, data should flow more freely, but this also increases the risk of data leakage.

This challenge necessitates robust cybersecurity measures and data management strategies to protect sensitive information while enabling seamless access for remote teams. Utilising encryption, access control Page No 7

Wealth Management

and multi-factor authentication can build stronger security processes to avoid data leakage and data breaches. It is also vital for businesses to continuously monitor systems and build the right knowledge amongst employees to spot potential data security issues.

2. Global Collaboration The global nature of capital markets requires real-time collaboration across different time zones and regions. Synchronising operations and fostering effective communication are central to security and success in this environment.

It is likely, therefore, that a lot of activity will be taking place on the cloud, so building stringent access controls will be vital. Global collaboration calls for advanced tools and platforms that facilitate teamwork, regardless of geographical constraints. Most importantly, however, global collaboration requires regular audits and penetration testing to get ahead of any potential threats.

3. Personnel Management Rapid organisational and personnel changes are often necessary, depending on the project. Organisational fluidity demands a workforce that can pivot quickly to adapt to changing circumstances.

This challenge highlights the importance of continuous training and development and a flexible corporate culture that embraces change. One such way of achieving this is to create cross-functional teams with diverse skill sets that can be quickly assembled and disassembled based on project requirements. Teams might show some initial resistance, but by implementing performance metrics that reward flexibility and the ability to undertake different roles, employees can be encouraged to see the benefit of organisational fluidity.

under rigorous observation to ensure they are not compromising security. It is also important to undertake the necessary research and risk management into vendors to make certain that you are partnering with a third party that you can trust.

What next?

The rise of organisational fluidity in capital markets firms reflects the pressing need for remote work flexibility, data security, and global collaboration. The fast-paced nature of the industry demands rapid decision-making and a robust record-keeping system, all while navigating evolving regulatory requirements.

To thrive in this dynamic environment, firms must stay agile and adaptable when it comes to technology.

The notion of the "best technology" is ever-evolving, necessitating a dynamic technology approach. Firms must continuously assess and adopt new technologies quickly to stay ahead. In this landscape, data security, global collaboration, personnel management, and technology enablement are critical challenges that require proactive strategies and robust cybersecurity measures.

The capital markets industry has always had a dynamic and interconnected workforce, but the demands on teams are increasing all of the time. To succeed in this new reality, firms must harness the best technologies of the moment, remain adaptable to change, and prioritise the seamless flow of information and communication to create business value while maintaining data security.

4. Technology Enablement Technology is at the heart of organisational fluidity. The right technology solutions empower capital markets firms to navigate the challenges posed by remote work, increasing cyber threats and global collaboration. Whether through cloud computing, cybersecurity enhancements, or advanced communication tools, technology is pivotal in driving efficiency and effectiveness.

Advances in AI mean that data becomes an asset for firms that can inform and enhance new work. Understanding what data you possess and ensuring that it is up-to-date and accurate is key enabling work for AI adoption.

It’s important, therefore, to secure your digital assets. Adopting a zero-trust model, assuming that threats may exist both outside and inside the network, can ensure that new technologies are put

Page No 8

Terry Doherty, CEO & Founder, Doherty Associates

Page No 9

Finance

ChatGPT and the FUTURE OF FINANCE:

How AI is revolutionising financial services

C

Few AI-based tools have created as much of a stir across a range of different industries as ChatGPT. According to Google, AI could bring a £400bn boost to the UK economy and could save the average worker more than 100 hours a year.

hatGPT’s functionalities go beyond language modelling, bringing the technology front of mind for many finance leaders, particularly those who already employ some level of automation in the finance function. According to our recent research, 77% of UK finance professionals say they are excited about the opportunities that AI and machine learning can bring to accounts payable (AP) and finance.

With the ability to analyse large amounts of data and automate routine tasks, ChatGPT can be strategically leveraged by finance teams to uncover patterns, trends and opportunities that can help improve productivity and enable faster decision-making.

Page No 10

The potential of Generative AI in the finance function ChatGPT can serve as a powerful search engine that provides quick and accurate responses, analyses large amounts of data and compiles research – capabilities that have significant potential when applied in the finance function.

Currently, a third (33%) of finance time is still being spent on manual processes – time which could be better spent on strategic initiatives that will contribute to growth. From data entry and report generation to financial modelling, ChatGPT is increasingly accurate in its ability to perform manual responsibilities if it can be leveraged strategically, so finance teams can focus on aspects of the job that require more critical thinking.

As businesses begin to plan beyond an economic downturn, the finance team has a leading role to play in delivering growth and business success – but they need the time and visibility over finances to make informed decisions. For instance, finance teams can save up to 40% of additional processing time for invoices by embedding OpenAI to facilitate auto coding. Auto coding more accurately predicts the correct code on an invoice and purchase order – alleviating the pain of manual comparisons of previous transactions.

Exercise caution Leveraging Generative AI in finance isn’t without risk, even if you only use it to create a better customer experience or improve your team’s productivity. Data privacy and confidentiality implications must be considered. Given that prompts can be

Finance included in the public model there could be a risk that team members inadvertently disclose proprietary data.

Parameters for its use must be established, as well as guidance around what can and cannot be shared.

How to leverage ChatGPT within the finance function While ChatGPT and finance might seem like strange bedfellows, there are a host of ways the technology can enhance operations, productivity, innovation, and decision-making within the finance function. The following are some areas where finance teams can get the most benefit from ChatGPT: 1.

Analysis and forecasting

Being an analytics powerhouse with its ability to dissect copious amounts of financial data, ChatGPT with Code Interpreter has the potential to provide real-time insights into market trends, which can help generate future projections and movements for your company.

These models can be used to identify patterns in financial data that would be difficult or impossible for humans to detect.

For example, a Generative AI model can identify a correlation between two seemingly unrelated factors that could significantly impact a company’s cash flow.

2.

Risk management

The ability to analyse real-time financial data affords finance teams the opportunity to better detect patterns and identify risks, which can be of great benefit in creating strategic risk models.

manually, AI models can take on the brunt of the workload, saving time and money for businesses. A Generative AI model could be used to automatically populate and generate reports based on real financial data while ensuring the data is as accurate as possible.

3.

sions, reduce the risk of human error, and automate manual tasks. As these models continue to evolve and improve, they are likely to play an increasingly important role in the future of finance.

Strategic planning

ChatGPT and other Generative AI models can uncover growth opportunities while still underlining potential challenges. Once used with the relevant data, ChatGPT can generate strategic recommendations for finance professionals, helping to shape decisions about which direction would be most fruitful for operations. While there has been speculation that Generative AI could take over 300m jobs across major economies, a human touch is still very much needed in terms of using the insight for high-level decision making here.

Ori Pearl, SVP of Engineering, Tipalti Source: 1 https://www.thetimes.co.uk/article/ai-could-bring-400bnboost-to-uk-economy-says-google-pl7q3hhzb

2 https://tipalti.com/en-uk/finance-leaders-prioritizesustainable-growth/

3 https://openai.com/blog/chatgpt-plugins#code-interpreter 4 https://www.ft.com/content/7dec4483-ad34-4007-bb3a7ac925643999

Closing thoughts Finance professionals have long valued precision and accuracy—and for good reason. Transpose one number incorrectly, and it could lead to serious repercussions for an organisation. As with any new technology, it’s critical to evaluate where ChatGPT fits within the responsibilities of a department.

Generative AI models are already helping finance leaders make better d e c i -

In addition, instead of sifting through spreadsheets and reports

Page No 11

Getting Closer to the Modern Consumer with

EMBEDDED INSURANCE

T

he insurance sector operates with an ecosystem that relies heavily on its networks of agents, branches and brokers for insurance distribution. The challenge this presents is that in a contemporary consumer society, this model doesn’t align with how invested people have become in their online lives.

Today, there remain many insurers who have yet to understand and embrace the major shift in consumer spending behaviours. The public hunger for digitised Page No 12

services has seen many aspects of the insurance sales process already move online, building the levels of direct engagement between insurers and their customers. Recent consumer research, for example, revealed that across all markets, just under 50% of consumers purchased policies via an insurer’s app or website, while 45% did so with an agent or broker.

Another 27% favoured non-traditional distributors, including InsurTech companies and adjacent businesses.

The Digital Route for Economies of Scale An embedded approach offers the route to getting closer to customers at a lower cost. The term (and the tech behind it) may sound new, but the underlying concept is familiar to most insurers. For instance, insurance policy upsells with rental cars, plane tickets and new car purchases have been around for decades. In this context, direct insurers, relying less on in-person selling, achieve up to 70% lower operating costs compared to the average multichannel insurer.

Wealth Management and services, incorporating third-party services into their products and launching new user experiences, digital products, and services.

Value-Driven Customer Relationships For insurers, this kind of embedded distribution is a faster, lower-cost, and more scalable distribution model than agent and branch-based distribution. But more importantly, embedded distribution empowers insurers to switch from transaction-driven to value-driven customer relationships.

In practical terms, using partner data and distribution capabilities enables insurers to create personalised experiences for their consumers and support them at different stages of their lives. By focusing on the experience, insurers can reap the benefits of becoming trusted advisors for both sales prospects and existing policyholders – an approach that can help deliver significantly higher customer loyalty and lifetime value.

Embedded insurance can be effectively used to help brands from other industries outside the financial sector to grow more profitable by collectively using each other’s power as a force multiplier, and meet the needs of today’s digital-native consumers.

Modern embedded insurance, however, lets insurers combine direct selling with economies of scale, enabling them to add more direct distribution channels at minimum cost. From a technical standpoint, once an insurer has developed an API-driven insurance product (or several), they can pitch it to an endless number of ecosystem partners, who can then offer it to their audiences without any additional costs.

To be clear, an API, or application programming interface, is a code-level interface that applications can use to connect with each other. Using an API means organisations can deliver a range of powerful capabilities, such as exchanging different types of information (location, payment, analytics, etc.), authenticating people, devices,

For example, an insurer might build partnerships with car manufacturers or automotive industry sales networks that can provide access to connected car and telematics data. They can also open the way to distribute embedded insurance products to potential customers through companion driving apps or connected incar dashboards. This can also include embedded processes to electronically insure vehicles, manage auto insurance records and enable the submission of auto insurance claims.

Another great example can be seen in Google’s business model. What began as a smart web search engine, now spans multiple profit centres, from cloud computing to finance and advertising. Google Pay is a perfect example of an embedded

finance solution, trusted by millions of businesses and consumers worldwide to enable payments. It also allows users to send money and offer 0% APR financing for some purchases. Despite this, Google isn’t a finance company in the traditional sense. Rather, it is leveraging its existing product ecosystem, deep customer insight and strategic partnerships to extend its reach into new markets.

Modernising Business Models Drives Growth and Loyalty Embedded distribution is emerging as the driver the industry needs to offset rising customer acquisition costs and compete with the new breed of digital disruptors.

In addition, the emerging data ecosystem, which gives insurers access to real-time insights, is giving added impetus to organisations that are focused on the benefits of predictive modelling compared to a traditional reliance on historical insights.

Looking ahead, embedded insurance represents a huge opportunity for insurers to modernise their business models and connect with customers in more relevant, personalised ways. By leveraging real-time data and predictive insights, insurers can shift from reactive claims management to proactive risk prevention. Embedded experiences also enable them to provide value throughout the customer journey, not just at the point of purchase. Insurers that focus on modernising their technology infrastructure and building a digital ecosystem of partners will be ideally placed to succeed in the years ahead.

Pavlo Khropatyy, VP, Global Head of Delivery, Financial Services & Insurance at Intellias Source: 1 https://www.swissre.com/institute/research/topics-and-riskdialogues/health-and-longevity/in-5-charts-covid-consumersurvey.html

Page No 13

Banking

THE JOURNEY TO NET ZERO: Navigating Carbon Emissions Markets

Meggie Grimaud, Senior Quantitative Research Manager, Finastra

Sean Coyne, Solutions Consulting Principal, Global Sales, Finastra

In response to the United Nation’s climate crisis goals, many countries are looking to carbon markets. Carbon prices have weathered a global pandemic and war in Europe, and serve as a natural hedge against inflation. The EU, California, New Zealand and South Korea have all seen carbon prices hit record highs. As carbon-consciousness continues to grow, carbon market infrastructure is developing quickly. At the same time, regulators are looking to enforce agreements on global greenhouse gas (GHG) reduction, and the goal of reaching net zero is expected to remain a priority for the next two to three decades.

Page No 14

Banking

C

arbon trading presents opportunities for banks, tapping into a growing, liquid and reasonably stable market. But it’s evident there is still work to be done. According to The World Bank, the EU Emissions Trading Scheme is one of just 68 Carbon Pricing Initiatives worldwide covering only 23% of global GHG emissions.

So what does the carbon trading market look like, and what are the practicalities for banks as they support their clients on the journey to net zero?

The Compliance market landscape The EU Emissions Trading Scheme (ETS), was the pioneering "Cap and Trade" system and initially faced issues with oversupply. It has generated more than 100 billion euros in auction revenues for EU Member States. Heavy polluters in the energy, industrial, and commercial airline sectors acquire EU Allowances (EUAs), and the system encourages them to buy additional allowances from those who have reduced their emissions. The EU annually reduces the supply of EUAs, which increases prices and incentivizes pollution reduction. Market dynamics are influenced by utilities hedging, coal and gas supply, European weather patterns, and regulations like the EU's Fit for 55 package, which seeks to reduce GHG emissions by at least 55% by 2030.

The outlook for the EU ETS appears highly positive. Firstly, the scheme is set to expand by including new industry sectors. This includes shipping in January 2024 and transport in 2027 with the objective of having 62% of all EU emissions covered by ETS by 2030. This expansion brings fresh participants and liquidity into the market. Additionally, there will be an acceleration in the annual reduction of allowances to 4.4% from 2028, along with a gradual phasing out of free EUAs. Furthermore the Carbon-border Adjustment Mechanism (CBAM) requires the purchase of CBAM certificates of all goods imported into the EU from 2026 to address carbon leakage in key emission-intensive sectors.

This will serve as a tax on goods and services originating from outside the EU's jurisdiction, ensuring that their prices account for the true carbon cost of production. The CBAM aims to create a level playing field in energy-intensive markets, with similar mechanisms under consideration in the UK and Canada.

Actionable steps for banks Banks should first measure their carbon footprint by analysing performance over time and setting achievable reduction targets. Begin by seeking Board approval, then assemble a dedicated carbon project team with expertise from various departments. Assess risk appetite and tailor Value at Risk (VaR) models. Map out the entire trade workflow for both proprietary and client trading. Evaluate the suitability of current systems for trade execution and settlement. Lastly, establish connections with exchanges like ICE and EX. To meet the rising demand from clients, banks can provide valuable support by facilitating access to carbon market opportunities and guiding them through the intricacies of this fragmented and poorly regulated sector. Banks can also extend financial support for the acquisition of VCCs, acting as a trading counterparty for these credits, and assisting in the negotiation of contracts.

Finally, banks can provide clients with exposure to carbon markets through investing in carbon credit funds, which consolidate investments from multiple clients to acquire voluntary carbon credits VCCs). Banks can also craft structured carbon products, allowing clients to invest in a diversified portfolio of VCCs that align with their risk tolerance and return objectives. Furthermore, banks may extend carbon-linked loans, where the interest rates are contingent on the client's capacity to reduce their carbon emissions, aligning financial terms with their environmental performance Carbon markets are diversifying, and banks will continue to look for new ways to repackage exposure to carbon markets for their clients. The ability to source, interpret and act upon market data in real-time requires the latest technology. As governments, organizations, and financial institutions strive to align with sustainability goals, banks – supported by the right financial technology partners – are uniquely positioned to play a pivotal role in supporting their clients' transition to a more sustainable and environmentally responsible future.

Page No 15

Finance

The future of financial services is in adaptation This sector faces a unique challenge

Garry Robertson, Client lead for Financial Services at esynergy

I

n the last two decades, the financial sector has changed completely. Banks have shifted to online services and customers now use apps much more than brick-and-mortar branches.

Digitally native ‘disruptors’ such as Monzo, Vanquis and Starling have put pressure on more traditional institutions to adapt as they snapped up thousands of customers.

Cybersecurity has become more of a worry than physical robberies, and regulations on have struggled to shift to adapt to this new digital world.

And this is not the end.

New innovations such as AI and GenAI especially will challenge the sector to shift yet again, and systems even a few years old are beginning to be out of date.

So, what does the future hold for financial institutions? How will they keep up?

Page No 16

Because of the nature of finance, security is paramount. As these behemoths have shifted to an online space, they have been forced to the vanguard of cybersecurity, identity checks and multiple levels of verification. A breach in security would mean dire consequences – both for institutions and for the customers who have placed their faith in the bank.

At the same time, disrupter banks emerged, pushing the industry towards a more digitally accessible model. Apps needed to be more appealing and easier to use, while still meeting regulatory and security standards. Continuity is also a concern. Many organisations are nervous about making any changes to existing programmes in case something goes wrong. While the instinct of financial institutions is to stay with programmes and platforms they are familiar with, this leaves them at risk of falling into ‘technical debt’ and becoming stuck with legacy systems that will leave them behind the curve. Sticking with what feels safe instead of continuing to evolve could cost an organisation efficiency, money and customer loyalty.

The finance of the future As Generative AI has been taking the world by storm, the financial sector will need to be flexible enough to transform itself once again. Not only will GenAI shape the security protocol and

engineering of systems in finance, but it presents a huge opportunity to meet a growing need: hyper-personalised customer experiences, customized products and contextual services Consumers are calling for more and more specific set-ups: apps that can display all their accounts and investments in one place, being able to choose investments based on personalised criteria, and market projections that are relevant for them and their interests. Institutions should be considering the potential of AI in this space to deliver innovative consumer experiences that will keep up with mounting expectations. For example, we are currently supporting a large financial service provider to set up GenAI chatbots for instant, 24/7 contextual responses to customers. This includes personalised customer interactions using data, and crucially provides scalable support during peak times. There is no going backwards in terms of consumer expectations for banking technology – they will only continue to evolve.

If there is one take-away for financial institutions, it is that they should prepare to invest in AI and GenAI solutions that will empower more personalised platforms with guard rails of compliance and explicability for their customers and regulators. It is the organisations that embrace this new technology early that will reap the benefits.

Why IC Markets Global?

0.0 Pip Spreads* 1:500 Leverage 0.01 Micro Lot Trading +2250 Tradable Instruments 24/7 Dedicated Support

*Raw Spread Account: Spreads start from 0.0 pips Trading derivatives involves high risk to your capital.

Page No 17

Technology

HOW TO NAVIGATE GENERATIVE AI'S DATA PROTECTION BLIND SPOT

F

ew technologies have captured people’s imagination and the headlines as much as generative AI has over the past few months.

Yet while the great and the good of the financial industry debate whether this technological advancement will be good or catastrophic for humanity, the reality is many businesses are already leveraging it on a daily basis, and for a variety of use cases.

Whether it is to speed up and improve customer service, to detect fraudulent activity, or to write lines of code, AI is coming of age, and is fast becoming a key instrument in financial organisations’ toolboxes.

While the business benefits of generative AI are increasingly clear to see, financial organisations need to be cognisant of how Page No 18

using tools such as OpenAI’s ChatGPT and Google’s Bard could impact their ability to comply with GPDR and other data protection regulations. If confidential or sensitive data is inputted into these tools, it is often unclear where this information will end up, not to mention who else can access and benefit from it. In short, using generative AI creates a data privacy blind spot for financial organisations, so it is vital they understand the risks before they start using it.

Valuable data could be harvested Generative AI makes it quick and easy to create otherwise complex documents or summarise reports, but in order to get meaningful output, employees may need to input confidential information.

Similarly, if a financial organisation adds

an AI-enabled chatbot to its website, there is always a possibility that customers might enter personal information like their credit card details, passwords, or more.

Large language models such as ChatGPT and Bard hoover up this information and use it to further improve their accuracy and responsiveness. In the above scenarios, confidential corporate and customer data will not only be stored and processed externally, it could end up being accessed and leveraged by external parties.

Regulators show concern How to regulate these tools from a data privacy perspective is still a work in progress. In Europe, there have been high-profile concerns about the lack of transparency into how these models operate and

Technology whether it is possible for them to respect the integrity of EU GDPR. In certain instances, these concerns have spilt over into action.

For example, in April 2023, the Italian government banned and geo-blocked ChatGPT until OpenAI could provide clarity on how data on Italian citizens and businesses was processed and stored.

This decision was triggered by an incident a month earlier, when users’ billing information and some conversation prompts were inadvertently exposed. The ban was eventually lifted, but only after ChatGPT had provided users with the ability to opt out of their data being used for training purposes.

More recently, the Irish Data Protection Commission held up the launch of Bard across the whole of the EU, citing privacy concerns. Google was subsequently required to add new features before it could roll out its AI tool across the region. These included a ‘privacy hub’ enabling users to opt out of certain use cases, and more control over what conversations with Bard are saved or deleted.

In the UK, the government calls its stance on generative AI ‘pro-innovation’ but it has nevertheless flagged up data protection

challenges. For example, its current guidance to civil servants encourages them to be ‘inquisitive’ about the way these tools can be used, but also reminds them not to input information that is classified, sensitive or not yet in the public domain.

In the heavily-regulated financial sector, similarly high standards must be upheld.

In other words, usage must always follow the guiding principles of GDPR. Models are high-value targets An added risk comes from the fact that these AI tools are potential targets for cyberattacks as they hold vast troves of personal and confidential data relating to millions of people and organisations. Not only are there serious worries about how these new tools harvest data to train their models, there are also additional concerns about the platforms’ ability to protect the data in their possession and limit exposure following a breach.

It goes without saying that the impact of a breach on financial organisations would be devastating. Any organisation considering the use of generative AI should consider that, as far as cybercriminals are concerned, these platforms have a massive target on their backs.

Balancing AI usage and privacy To benefit from everything generative AI has to offer, financial organisations should first and foremost consider their usage through the lens of data privacy.

This means introducing clear policies stating whether employees are permitted to leverage these platforms, and, if so, for which use cases. Furthermore, they need to set and enforce rules around the types of datasets that can be inputted, together with guidance on how to optimise privacy settings.

With little to no visibility into how these models store, process and manipulate data, right now, the only watertight way for companies to ensure compliance with privacy regulations and financial legislation is by controlling how employees interact with generative AI.

Robert Wassall, Director of Legal Services, NormCyber

Page No 19

Business

Page No 20

Business

Digital Trust in a New Era: Building and Safeguarding with Zero Trust Frameworks

A

s the pace of technological advancement continues to accelerate, businesses face an ever-evolving set of challenges to digital trust. The rise of artificial intelligence (AI), looming threat of quantum-powered cyberattacks, and an expanding attack surface has fundamentally changed the way we perceive and implement digital trust.

AI in particular offers both a help and a hindrance to cybersecurity.

In the financial world, AI can enhance identity verification and secure financial transactions through biometric integration. On the other hand, it paves the way for increasingly sophisticated AI-generated phishing attacks aimed at capturing account credentials. Likewise, Quantum computing promises to revolutionize data processing speed, but it also poses a threat to our current cryptographic methods of securing sensitive information.

In this new era, financial institutions must adapt their security strategies to uphold digital trust.

Page No 21

1998 263 140,000

Page No 22

Business

Building Advanced Digital Trust with Zero Trust Frameworks In a changing digital landscape, the future of digital trust hinges on the adoption of Zero Trust frameworks. Zero Trust Network Access operates on the principle of "guilty-until-proven-innocent." Rather than making assumptions about the safety of certain users, it requires the continuous validation of all identities during every access request.

While the idea of zero trust has been around several years, to build advanced digital trust, companies need to constantly ensure they have the best solutions, the right processes, and a continuous improvement of controls. For instance, they need strong user identities with multi-factor authentication resistant to account take over (ATO) attacks such as phishing and MFA Bypass. They should also use passwordless login with digital certificates instead of passwords to ensure high assurance authentication. By enforcing certificate-based authentication for both users and devices, organizations can ensure only verified and authorized entities have access to data and resources. Only by combining these best-in-class approaches can organizations have a truly modern Zero Trust set up.

Furthermore, secure connections with end-to-end encryption, backed by digital certificates and a robust public key infrastructure that is future-proof with a post-quantum ready architecture, must be established across devices, networks, and the cloud. This should be supported by a comprehensive certificate lifecycle management to ensure organizations can keep on top of their digital and cryptographic assets. In addition, keys must be secure and managed to ensure compliance with organizational and industry regulations.

Navigating Zero Trust Deployment Implementing Zero Trust frameworks is not a one-size-fits-all solution. It demands a multifaceted foundation consisting of technology and company policy changes, continuously built upon and strengthened to evolve a financial institution’s security architecture. Surprisingly, nearly 60% of organizations lack a Zero Trust security model. However, those that do adopt it typically save $1 million in data breach costs per incident, according to IBM research.

As banks and other financial businesses increasingly move to cloud-based infrastructure, mobile workforces, and interconnected ecosystems, the need for a security model that can adapt to constant digitalization is imperative. Zero Trust's flexibility and scalability are particularly suited for this context, allowing financial organizations to integrate new technologies without compromising their security posture.

On the organizational side, company policies are pivotal for successful Zero Trust implementation. Financial organizations

should establish guidelines for applying Zero Trust principles throughout the enterprise, defining access controls, authentication procedures, data handling protocols, and employee responsibilities. These policies help to create a culture of security awareness and alignment amongst employees.

Upholding Digital Trust In finance, maintaining Zero Trust is as important as first implementing it. Implementation starts with a comprehensive vulnerability assessment of devices, users, applications, and network access to pinpoint potential attack surfaces.

Microsegmentation enhances security by creating smaller network areas that act as mini-perimeters to help contain breaches. Continuous monitoring then enables real-time risk detection for proactive security.

Zero Trust offers big benefits in finance, with its flexibility and scalability proving advantageous as institutions adopt new cloud technologies. In contrast to traditional security models that struggle to adapt to evolving requirements, cloud-based Zero Trust is characterised by its flexibility, scalability, and capacity to evolve in tandem with an ever-changing security landscape. For financial firms using complex tech stacks, this approach minimizes exposure to threats while ensuring a robust, responsive stance on digital trust. This facilitates their digital transformation and promotes secure business growth while reducing operational inefficiencies.

The Evolution of Digital Trust In today's digital landscape, advanced digital trust is crucial to the operations and business of modern financial enterprises.

From financial transactions to identity verification, Zero Trust frameworks offer a robust strategy to secure data and address challenges from AI, quantum computing, and a growing attack surface. Through high assurance identities, strong authentication, and continuous monitoring, organizations can bolster their defences and secure their digital ecosystems. Embracing the evolution of digital trust not only guards against current threats, but also ensures a more secure and resilient digital future.

Rohan Ramesh, Director of Product Marketing Entrust Source: 1 https://www.ibm.com/downloads/cas/3R8N1DZJ

Page No 23

Business

The evolving role of the CFO

T

he role of the CFO is evolving dramatically. The business world is being forced to adapt to seemingly ever-present economic and political disruption - with crises such as the pandemic and wars across the globe fuelling uncertainty. Businesses have to be constantly adapting to keep up with shifting regulatory requirements and growing security risks. During these times, companies are increasingly looking to the CFO to provide stability.

Long gone are the days when the CFO was tucked away in a side office overseeing the company’s finances, playing a simple transactional role involving managing cash flow, financial planning and analysis, assessing and managing risk within a department disconnected from the rest of the organisation.

Page No 24

Business

to advance growth opportunities. These could include entering into a new market or choosing the best partners - and in order to inform this decision-making, the CFO must provide quality, real-time data throughout the business, as well as making sure to deliver efficiencies in the business.

place to take full advantage of these tech advancements - so shrewd recruitment, and training and upskilling programmes are required.

Because of these significant changes in the role of a CFO, a broader set of skills are required. In particular, soft skills are today just as important as hard skills, with listening and commuTo ensure the quality of this nication, collaboration and data, today’s CFO is also leading fostering good relationships within the company, flexithe charge when it comes to bility and adaptability, and innovation. This is where the commercial acumen all important elements. Indeed, importance of having a digital these are usually skills assomindset comes in. Digital ciated with the CEO.

transformation is an essential It has become clear in repart of adapting to keep pace with cents years that the CFO has an increasingly importhe changing demands of the tant role to play in shaping business world. a company’s destiny and

These more mundane tasks are still an important part of the job, but today a CFO’s role is much more diverse. In uncertain times, the CFO has a crucial role to play in company strategy - both devising and driving it, and ultimately helping drive business growth and investment.

These new responsibilities involve a much closer working relationship with not only the board, but the CEO and other departments within the business.

The modern CFO could be described as more of a strategic business partner, bringing together different departments such as finance and commercial in order

Finance transformation - streamlining the finance department with more of a focus on tech - involves, for example, the introduction of a good ERP system, an efficient AI and machine learning. An important consequence of this is it allows the team to focus more on value-added activities - assessing data, being proactive - rather than simply building and consolidating data. This ensures the high quality of the data, helping the CFO react quickly, especially during times of disruption, to ensure the business makes the best of its opportunities and stays relevant. It is important to create a flexible and agile department, which supports the business as a clear business partner to the rest of the organisation.

enhancing its potential. With the challenges businesses are set to face in the years to come, that role is set to only grow in influence.

Marco Torrente is the Global CFO of WebBeds, a company in the travel industry with a global revenue of €1.7bn. He heads up a finance department that consists of 240 people across the world. His career in finance has spanned 20 years and seen him work across four continents in multiple industries, also including consumer goods and technology.

All this must be carried out while ensuring the human side of the business is not ignored. The right talent must be in

Page No 25

Technology

The Power and Potential of AI to Improve Customer Experiences

A

rtificial Intelligence (AI) has reimagined what is possible and captured the world's imagination. With the ongoing debate between fear and excitement, one thing is clear: AI will make a massive impact on our daily lives.

AI is now frequently used for everything from writing to research, but the massive potential for AI to improve customer experiences and enhance customer service is still largely untapped. We are at an inflection point in the industry, where opportunities await those companies willing to put in the effort to get AI-powered unified customer experience management (Unified-CXM) right.

In this blog post, we'll delve into five key ways AI can improve customer service across the retail, technology, and financial sectors regardless of economic uncertainties.

1.Proactive Service for Happier Customers When it comes to customer service operations, inaction is equivalent to waiting for bad news. Leveraging AI can be a game-changer.

By analysing historical customer data and utilizing machine learning algorithms, AI can predict customer behaviour and preferences.

This predictive capability allows retailers to anticipate customer needs, optimize inventory management, and personalize recommendations. Technology companies can proactively identify potential product issues or system failures, enabling prompt resolution and minimizing customer downtime. Financial institutions can leverage AI to assess risk profiles, detect fraudulent activities, and provide proactive fraud prevention measures.

2.AI-Powered Chatbots for Fast Responses AI-powered chatbots and virtual assistants can handle routine inquiries, freeing up human agents to focus on more complex customer issues. These AI-driven systems are available 24/7, ensuring roundthe-clock support for customers. By automating repetitive tasks and seamlessly integrating with backend systems, AI reduces response times, improves efficiency, and helps organizations scale their customer service operations without exponentially increasing costs.

Page No 26

Technology

3.Sentiment Analysis for Personalized Interactions In almost every industry, AI's power lies in its ability to create personalized interactions that resonate with individual customers. By analysing sentiment, past buying behaviours and preferences, AI algorithms can recommend tailored product suggestions, leading to a more engaging shopping experience.

Retailers can monitor online conversations to understand customer preferences, technology companies can fine-tune their offerings based on user feedback, while financial institutions can assess customer satisfaction and enhance their customer-centric approach.

4.Intelligent Routing for Accurate Responses AI-powered customer service capabilities automatically assign customer inquiries across channels – such as Instagram or TikTok – to the right agent. This ensures that customer queries reach the right people, reducing response time and improving accuracy.

5.Comprehensive Insights for Data-Driven Decisions With AI-powered analytics and reporting, companies in any industry can gain valuable insights into their customer service efforts. By analysing metrics such as response times, sentiment analysis, and customer feedback, businesses can identify areas for improvement and track the effectiveness of their service. These insights enable businesses to make data-driven decisions and optimize their customer service strategies.

As AI continues to shape the world, customer service stands at a critical point of transformation. By strategically implementing AI models, businesses can improve service delivery, stay ahead of consumer expectations, and thrive in an increasingly competitive landscape. The time for action is now, ensuring that AI becomes a catalyst for exceptional customer experiences.

Adam Quartermaine, Global VP, Western Europe at Sprinklr and XX at OpenAI

Page No 27

Finance

A wealth of possibilities: The rise of AI in financial services

Devashish Mishra, Head of Solutions – Europe, Persistent Systems

I

n recent years, artificial intelligence (AI) has been reshaping the landscape of several industries, and financial services is no exception.

In fact, with hyperscalers like AWS, Google, and Microsoft baking AI capabilities into products, automation is now an integral part of everyday business operations — whether people realise it or not.

And with the emergence of generative AI (GenAI), automated technologies are now on the radar of executives and boards like never before, presenting banks with an array of new possibilities as to how business can be done.

Page No 28

Finance

Page No 29

Finance

With applications across marketing, new digital services, and operational efficiency, it’s clear that the financial services industry is keen to invest in this new wealth of possibilities.

But what does the rise of AI in financial services look like?

Leveraging generative AI for efficiency To date, AI technologies have been used primarily for rapid information processing, helping to speed up data driven tasks that would otherwise need to be handled manually — generative AI models are taking use cases one step further.

For example, in the case of content marketing, generative models are allowing organisations to produce promotional collateral at scale.

Content creators, who once relied solely on manual work, are now using mailers and other copy formats produced by large language models (LLMs) like ChatGPT, while tools like Midjourney are being used to generate images.

Marketers within the financial sector are also using GenAI-enabled platforms to streamline routine tasks like customer data segmentation and sentiment analysis, making understanding potentially complex reports easier. Execs can even ask questions to AI bots rather than checking multi-page reports to crunch the data, enabling them to make data-driven decisions more efficiently.

Beyond the corporate functions, which also benefit through more efficient generation of memos and other internal documents, customer support is being made easier too.

Page No 30

At the day-to-day customer level, conversational AIs are making interactions more convenient by answering FAQs. At the other end of the banking ecosystem, high net-worth individuals (HNIs) are getting more valuable insights on their investments thanks to AI generated investor analysis and reports –including references to the specific data source – to help answer any queries HNIs may have.

AI for and personalisation Looking ahead, AI has the potential to help banks and financial institutions offer hyper-personalised products and reach previously unbanked segments of society.

Utilising automated processes allows financial institutions to process large amounts of data gathered from social media, for example, and build an accurate picture of the next generation of bank service users. This means it’s easier to launch products that are best suited to new customers’ needs and consequently unlock new revenue streams for the bank itself.

As we move forward, this level of personalisation will get increasingly granular, with banks launching niche offerings for particular groups and ensuring the marketing of those offerings is super personalised thanks to copy from LLMs. Building secure AI systems As financial institutions move to embrace AI and especially Gen AI, discussions have emerged around how automation can safeguard – or possibly jeopardise – customer data.

Finance

The concern with generative AI is that it’s not explainable. The financial services industry has always been focused on making sure AI can justify the decisions it’s made, but with LLMs, that’s not possible.

To harness AIs full potential, however, financial institutions need to consider how to implement use cases, train their workforce in AI-driven processes, and adapt their infrastructure to accommodate AI technologies.

Until we discover a means to get the rationale behind decisions, Gen AI will sit at the edge of the banking– used for marketing and data segmentation ¬– rather than used for core banking processes. It’s simply too much of a risk.

AI’s complexity necessitates bespoke implementations, meaning industry organisations must partner with trusted AI experts, to evaluate their needs and ensure a positive ROI.

Ultimately, those wanting to integrate any use of AI into their operations will need to define the right structure and security layers, striking the right balance between AI's capabilities and user data protection.

With the right solutions partners at their side, those who embrace AI stand to get ahead of the curve, and reap the benefits of enhanced efficiency, improved security, and personalised customer experiences in a competitive financial landscape.

In most cases, this means creating data silos where AIs only assess the information meant for a particular purpose, effectively eliminating the risk of serving sensitive information unintentionally.

A wealth of possibilities Given the various applications, it’s clear the rise of AI in finance isn’t a passing trend but a transformative force that’s here to stay. The proliferation of automation technologies in recent years also challenges the prevailing view that banks are slow to undergo digital transformation.

Page No 31

Wealth Management

Julian Hucks, Founder and Managing Director at Starpeak Insurance Solutions

Exploring the impact of regulatory measures on insurance providers As businesses gear up for the new year, insurance providers must shift their focus towards elevating customer experience.

Prioritising customer needs is one of the best ways to achieve positive results, both in terms of financials and cultivating loyalty.

Though this may seem obvious, it wasn’t until this year that we saw adopting a customer-centric approach become a necessity, rather than an optional way of working.

T

his summer, the Financial Conduct Authority (FCA) implemented Consumer Duty rules primarily aimed to safeguard customers. The Duty acts as a shield, protecting customers from misinformation and empowering them to make informed financial decisions. Yet, compliance involves more than just ticking boxes.

To meet the regulations, businesses need to review and innovate their offerings to optimise and evidence every aspect of the customer experience (CX).

Page No 32

Rather than viewing compliance as a burden, insurance providers should view it as a golden opportunity for growth and improvement.

Product innovation is key

faster and more accurate claims and manage risk assessment in a better way.

This ultimately benefits customers (such as SMEs) by providing them with greater access to insurance products and services that meet their unique needs.

In the last decade, we’ve seen more regulations mandating that insurance providers elevate their customer experience standards, such as the Insurance Act introduced in 2015. Technology now plays a crucial part in driving this improvement. Adopting new technologies can allow insurance providers to make

Take therapists, for example. Niche businesses like theirs deserve access to comprehensive insurance tailored to their specific needs. They require insurance that safeguards their treatment equipment but also shields them from liability in the event of any treatment-related complications. Having insurance

Wealth Management policies that cover all these potentialities is integral for therapists aiming to establish, and more importantly, grow their business.

Creating solutions that meet the unique protection needs of different SMEs needs to be prioritised by insurance providers. It’s about more than just innovating policies; it’s about ensuring that the experience of the claims processes is seamless for the customer.

While short-term efforts such as updating existing products and maintaining current systems are necessary, SMEs are actively seeking insurance providers who offer innovative products to fuel their business growth and success. They are looking for a streamlined, efficient, and compliant purchasing process, coupled with service excellence from a reliable provider.

Data-led personalisation According to rule 9.18 of the Consumer Duty legislation to comply with the Duty (and remain competitive), digital experiences must not be unclear or confusing.

Therefore, to abide by this rule, insurance providers need to understand the needs and potential questions their customers may have.

This is where the extensive datasets that insurance providers keep are especially useful. This data provides crucial insights into customer demographics, claims history, and market trends. Predictive analytics allows insurance providers to evaluate the probability and potential cost of a policyholder filing a claim. By analysing historical data alongside factors like economic indicators, insurance providers can pinpoint high-risk policyholders and adapt premiums accordingly. This

approach enables insurance providers to offer competitive pricing to customers while delivering a more personalised and responsive service.

Overcoming the hurdles presented by new regulations may seem daunting, but they are far from impossible. Insurance providers can attain compliance and embrace customer-centricity by adopting cutting-edge technology. This guarantees a positive experience for both insurance providers and customers throughout the claims process.

Source: 1 hhttps://www.fca.org.uk/publication/finalised-guidance/ fg22-5.pdf

2 https://www.legislation.gov.uk/ukpga/2015/4/contents/ enacted

3 https://www.fca.org.uk/publication/finalised-guidance/ fg22-5.pdf

Page No 33

Page No 34

Finance

THESE ARE THE KEY TRENDS DRIVING CHANGE IN

MONEY REMITTANCE

T

he money remittance landscape is being reshaped by trends including greater demand, increased migration, rapid digitalisation and more.

Now, payment technology is crucial to overcoming the challenges and tapping into the opportunities of the changing money remittance industry. Here’s how payment platforms offering alternative payment methods (APMs) can empower money remittance businesses to flourish in the years ahead.

Migration and digitalisation are key drivers of change There are many factors contributing to the changing remittance landscape, and migration and digitalisation are chief among them.

Digitalisation’s impact on sending money abroad cannot be understated – increasingly advanced technologies, including mobile apps, have made remitting money faster, more cost efficient and safer than ever before. No more visits to bank branches or relying on unregulated and risky alternative methods to send money -- instead, it can be done securely and at consumers’ own convenience, wherever they are, using their mobile device. Put simply: digitalisation is broadening access to money remittances.

The continued growth of migration is also catalysing change in money remittance.

With the majority of remittances originating from expats sending money home to their family and friends, and the IMF predicting that economic pressures, political unrest, and climate change will drive more people to emigrate, the demand placed on remittance businesses will only grow.

With this in mind, digital-first providers must now prioritise making the consumer experience as smooth and user-friendly as possible if they are to meet the demands of the industry’s future.

Money remittance: Challenges and opportunities With a growing number of people now hoping to send money abroad, businesses face challenges in meeting customer needs.

For example, many expats and those receiving remittances are unbanked or underbanked, posing a challenge for digital-first providers to cater to them.

Meanwhile, remittances are a global concern, and consumer payment preferences often differ depending on where they live.

With this in mind, businesses must be able to tailor their experience, offering a number of payment options to meet the needs of consumers, wherever they may be. eCash, for example, can help these businesses reach unbanked consumers all over the world. One of the use cases of eCash is that it allows consumers to

simply scan a barcode, take it to a conveniently located pay point, and settle the transaction in cash. This means they can send and receive money digitally even if they don't have access to a bank account or ATM. Partner up A partnership with the right payment provider is essential to overcoming the challenges of the changing industry, enabling businesses to offer a variety of APMs, including eCash and digital wallets, to provide greater, more localised choice to consumers. It can also ensure transactions are processed quickly and efficiently, anywhere in the world.

While the money remittance landscape may be shifting, the right payment provider can help businesses stand on steady ground and seize future opportunities.

Lewis Horder Paysafe Source: 1 https://www2.paysafe.com/paysafe/resourcecenter/2023/ Shifting-Money-Remittance-Landscape

2 https://www.un.org/en/observances/remittances-day/ background

3 https://www.imf.org/en/Blogs/Articles/2020/06/19/blog-

weo-chapter4-migration-to-advanced-economies-can-raisegrowth

Page No 35

Banking

The transformative power of Open Banking in the lending industry Emma Steeley, CEO,Freedom Finance

O

pen Banking is promised to transform the finance industry with opportunities to create more innovative and tailored financial products for consumers. While uptake since its introduction in 2018 has been slower than expected, Open Banking has gained momentum over the last 12 months. In fact, the number of active Open Banking users in the UK reached the milestone of seven million users earlier this year – a significant increase on the five million users at the start of 2022.

While there remains a nervousness around sharing of personal information with third parties, there are many benefits that Open Banking provides across multiple industries. However, the real and transformative potential can be found in the lending industry.

Benefiting from being a direct beneficiary from the influx of data, will allow lenders to access more comprehensive and real-time financial insights which will in turn improve risk assessments. That means lenders can approve more loan requests from borrowers with a higher likelihood of repayment.

Below I explore how Open Banking can increase the overall efficiency and health of the credit system, how it drives financial inclusion, and how regulation can help break the status quo.

Source: 1 https://www.altfi.com/article/10435_uk-hits-7m-openbanking-users

Page No 36

Banking

The promise of fairer, more accurate affordability decisions From a creditworthiness point of view, bureau data is reliable. It tells lenders who has a good credit score, who has little to no debt, and who has the longest credit history. While it’s true that credit bureau data might lack real-time updates and is plagued by outdated models – not to mention gender bias – the reality remains that, particularly for assessing creditworthiness, these evaluations are consistently accurate and reliable.

Credit Reference Agency (CRA) data provides information that cannot be obtained from Open Banking and is completely frictionless for the customer. For instance, addresses, creditor balances and mortgage details are only available from the bureaus.

Creditors must assess all available data to make better informed decisions. However, it has been proven that the combination of CRA and Open Banking data can aid in providing the most accurate information on an individual. Only by updating our data models can we expect to make affordability decisions that are accurate and fair for customers.

A temperature check on Open Banking To date, the mass adoption of using a combination of Open Banking and CRA data has been prevented due to the consented data model and the time it takes to build up a sufficient Open Banking data sample and performance on a customer. Conversely, CRA data can be easily retro-fitted.

There is no doubt that lender ‘fear’ is also contributing to the stagnation of the market, with the risk of retrospective regulation and concerns over receiving ‘too much information’ are hurdles that we need to overcome, but in an economic environment as fragile as what we’re currently witnessing, creating a more sustainable and fairer lending environment is critical.

The importance of regulation Since its launch five years ago, regulating authorities have continued to advocate for the use of Open Banking but have failed to provide clear rules or guidance for doing so, meaning lenders have had to learn how to best utilise the subsequent data to yield positive outcomes for their customers themselves.

We are starting to see progress in this area, but if lenders were mandated by regulation to use Open Banking data to assess affordability, it would be a game-changer for underserved customers in the market.

It is important to recognise that just because a customer is thin on credit bureau data, it does not mean they also lack bank transaction data that could provide an indication on their eligibility for lending. Putting regulation in place to secure the position of data from Open Banking in the decision making process, would undoubtedly widen the pool of eligible individuals, and dramatically drive financial inclusion across the board. Moreover, if consumers were able to consent to re-share their data more easily with lenders, then we’d likely see greater adoption of the use of data insights and improved outcomes for all involved.

Final Words It’s about time we removed rigid credit evaluation processes and harnessed Open Banking to assist in assessing creditworthiness and affordability for the consumers that are being excluded from credit. By allowing for more accurate insights into an individual's financial behaviour, these innovations can provide a more nuanced and fair assessment. The potential for Open Banking to level the financial playing field, foster economic equality, and provide opportunities for all is boundless. It's a transformation that can redefine access to credit, improve financial inclusion, and create a future where individuals can seize their financial goals with confidence. In this evolving landscape, Open Banking is the bridge to a more equitable and prosperous financial future for all.

Page No 37

Technology

A boom too soon: What’s next for fintech in 2024?

F

inancial services have undergone a transformational phase over the past eight years. The structure of payments, the delivery of banking products and the delivery of financial services have been disrupted by the progression of technology.

Innovative customer experiences are now the most valuable currency. However, fintechs are now confronted with a new challenge - the impact of a fragmented global economic climate on funding, resources, unit economics and margins.

A booming investment market that resulted in dramatic fintech developments has slowed down. The industry faces numerous challenges. Businesses are grappling with disruptive technology such as AI, stringent regulation and a shift in investor appetite for growth at any-cost strategies to sustainable business development.

As 2023 comes to a close, the impact of the unstable market means fintechs will have to pivot their approach from growth to remain resilient. The next 12 months hold promise for further exciting developments in the industry, but businesses will need to tread carefully or risk turning into a forgotten fintech.

Market testing leads to triumph In a challenging market, innovation is still crucial and must be balanced with risk mitigation to ensure sustainable growth. In the first half of 2023, fintechs focused on improving their operational efficiencies and cash flow to help weather economic difficulties and remain attractive to investors.

Page No 38

Ivo Gueorguiev, Co-Founder at Paynetics

Technology

Reducing operational expenses and taking a less aggressive stand with business development and growth is important. In the past, fintechs focused on narrow product propositions, addressing a specific need. While such a focus remains for startups, this is not enough. Partnerships and third-party platforms allow fintechs to drive revenue and improve the customer experience, helping build a strong foundation in a volatile market.

Although a customer focus has traditionally been fintech's calling card, customer trust and loyalty are critical when acquisition cost is heavier to bear. Smaller service providers are less able to accommodate the acquisition cost and will struggle if they lose focus on consumer loyalty and trust.

The power of partnership Fintechs are under pressure to raise funds with evidence of product market fit. Even corporates are under budgetary constraints and are reluctant to spend large amounts before validating a concept. A Minimum Viable Product (MVP) is enough to win early adopter customers, but not so many that significant time and money are invested in creating them. Fintechs, startups, and corporates would greatly benefit from teaming up with established embedded finance players who can help them through this process.

Teaming up with infrastructure providers helps fintechs and corporates demonstrate market traction. Traction has become more important than ever - the progress and momentum of a business will sway or deter investors and determine whether a startup receives any part of the dwindling fintech investment pot. And in the corporate boardroom, it will make or break an initiative. Traction is measured in

various ways, including revenue, user percentage growth, burn rate, revenue, retention and the quality and quantity of partnerships. Startups should keep a close eye on these metrics, especially when profitability is tough to achieve in the current economic climate.

Prioritising growth at any cost has passed As fintechs take a less aggressive approach to growth, shifting strategies to sustainable development doesn’t mean innovation takes a back seat. Testing market traction means fintechs can focus on creating a product people and businesses want whilst building trust and loyalty among customers.

The pressure to raise funds still hasn’t changed, but the addition of validating a concept before commitment means fintechs will need to get creative with how to get products and services over the line. Recognising the power of partnerships and drawing from industry experts will help businesses adapt to win the all-important investment from stakeholders.

For fintechs looking at strategies for 2024, the state of the industry will be less about launching and more about proving products have the market fit to survive.

Source: 1 https://kpmg.com/xx/en/home/insights/2023/07/pulse-offintech-h1-2023-global-insights.html

2 https://coresignal.com/blog/business-traction/ 3 https://www.goingvc.com/post/7-effective-ways-tomeasure-a-startups-traction

Page No 39

Finance

What needs to be done to address the cybersecurity skills gap?

With increasing incidents of sophisticated attacks across the finance sector, the need for a capable, robust, and skilled security team is critical. Yet, the cyber skills gap is getting bigger, and businesses are facing increased challenges in recruiting and nurturing the next generation of cyber talent.

We are joined by Max Vetter, Vice President of Cyber at Immersive Labs, offering his insights on this pressing issue. With extensive experience in the field, Vetter discusses the current state of the cyber skills gap, the evolution required in hiring practices, and strategic approaches for organisations to foster a robust cybersecurity workforce.

Page No 40

1. How critical is the cyber skills gap today, and why is the industry struggling to address this?

The cyber skills gap has reached critical mass in recent years. It’s posing a significant challenge to the industry's ability to protect digital infrastructure and data.

We are currently seeing a record-high workforce shortage nearing 4 million.

But this gap is not just a matter of numbers; it reflects a deeper issue in the evolving nature of cybersecurity threats and the industry's response to them. The struggle to address this gap stems from several factors. Firstly, the rapid evolution of cyber threats continually outpaces the current educational and training models, which often focus on theoretical knowledge over practical, real-world skills.

There's also a heavy reliance on traditional hiring criteria like degrees and certifications, which may overlook candidates with the potential for critical thinking, problem-solving, and adaptability

– essential traits in cyber defense.

2. In your view, how should hiring practices for entry-level positions evolve to effectively bridge the cybersecurity skills gap?

Hiring practices for entry-level positions must fundamentally evolve by embracing a more inclusive and skill-centric approach. This means actively seeking out and nurturing talent from various backgrounds, including career changers, self-taught individuals, and those from non-technical fields. By doing so, organisations can tap into a rich pool of diverse perspectives and problem-solving approaches, which are crucial for effective cybersecurity.

A key aspect of this evolution involves prioritising provable cyber capabilities in the recruitment process. Employers should focus on evaluating candidates' abilities to handle practical cybersecurity scenarios, rather than solely relying on academic qualifications. This could

Finance

Max Vetter, VP of Cyber at Immersive Labs

involve using simulated environments or practical tests during the recruitment process to assess a candidate’s problem-solving skills and adaptability.

Additionally, it's essential to foster a culture of continuous learning and professional development within organisations.

Providing access to ongoing training and upskilling opportunities not only enhances the capabilities of the workforce but also makes cybersecurity roles more appealing and accessible to a broader range of candidates.

Most importantly, mentorship and support programs should be integral to the hiring process, especially for those entering from non-traditional backgrounds.

These initiatives can ease the transition into the cybersecurity field, providing guidance and building confidence in new recruits. This holistic approach to recruitment and talent development can effectively narrow the cyber skills gap, equipping the industry with a workforce

capable of meeting the challenges of a dynamic cyber landscape.

3. Based on your experience, what recommendations would you offer to organisations seeking to address the cyber skills gap shortage?

I think every business should adopt a dynamic approach to role definitions in cybersecurity. As the field evolves, so too should the skill requirements for various roles. Organisations need to regularly update their job descriptions and expectations to align with the latest threat landscape and technological advancements.

Furthermore, partnerships with educational institutions and industry bodies can be instrumental. These collaborations can help in developing tailored training programs that are directly aligned with current industry needs, ensuring a steady pipeline of job-ready cybersecurity professionals. This is something that we’ve also done at Immersive Labs, where we recently partnered with Accenture to

launch the Cyber Million program. This program provides free hands-on labs to help individuals develop skills suited for specific job roles. Once candidates successfully complete a subset labs, individuals can apply to the roles.

Lastly, internal talent development should be a priority. Our research found that 80% of security leaders don’t think their teams have the capabilities to respond to future attacks. So, investing in upskilling current employees not only addresses immediate skill gaps but also fosters a culture of continuous improvement and adaptation, which is vital in the fast-paced world of cybersecurity. This investment in internal talent development can yield long-term benefits in terms of employee retention and organisational resilience.

Source: 1 https://www.isc2.org/Insights/2023/11/ISC2-CybersecurityWorkforce-Study-Looking-Deeper-into-the-Workforce-Gap

2 https://www.isc2.org/Research 3 https://www.immersivelabs.com/cybermillion/ 4 https://www.immersivelabs.com/cyber-workforcebenchmark-report/

Page No 41

Technology

What has a decade of digital transformation in property law taught us?

Page No 42

Technology

T

he use of technology in real estate law hugely accelerated, not unlike most industries, during the pandemic. In just a few years, we witnessed a change that heralded the fixture of hybrid working, and a digital-first expectation by consumers that saw many industry practices quickly become obsolete. We learnt, in a relatively short period, that the capabilities of technology to drive traditional processes are phenomenal. However, this also presented a barrier for professionals who have relied upon traditional methods for decades. The ability to adapt has certainly been put to the test in the last decade, during which many in the financial and property service industry came to the unfaltering conclusion that businesses that use technology for effective commercial advantage are driving the digital transformation of tomorrow. AI won’t take your job, but a human who knows how to use it, could.

Following the launch of ChatGPT in November 2022 and other generative AI tools that followed suit, the pace of change suddenly hit lightning speed. That was a year ago, but I still see many firms hold back on what should be the most exciting time for business development of their careers. One of the early mistakes to avoid is seeing digital transformation as a tick box exercise that can be ‘completed’. For long-term success, the journey will be ongoing, requiring commitment, collaboration, and investment. The challenge to overcome is twofold; helping established organisations with deeply ingrained processes see the bigger picture path to success, and supporting a longer-term investment plan that navigates around a more familiar status quo towards third-party tech companies that can share the weight of constant innovation. Leaving experts to lead your business’ digital transformation through hugely complex periods of technological advancement will keep you one step ahead.

To be clear, innovation is our friend, not our foe. Just like how we use Excel to manage numbers, AI’s autonomous capabilities to enhance productivity and accuracy are critical to giving clients the service they expect, freeing up vital time for staff to concentrate on higher-level tasks and unpacking human nuances. Commercial longevity in a world defined by significant economic and social change will be vital to competitiveness in 2024 in a business environment where speed, efficiency, and cost-effectiveness are paramount.

To this end, we believe access to big data is the key to unlocking further breakthroughs in the real estate legal sector. The industry is increasingly using more digital data and we’ve seen huge progress in this area over the years, with crucial partners like Land Registry making great strides in digitising their own platforms. Further progress is needed to ensure no parts of the transaction are digitalised in isolation. The moment we see a holistic transformation in both the private and public sector is when we’ll see a definitive shift, helping a real estate transaction go from taking three months, to three days.

Right now, however, access and availability to data are the bones we need to take the first step. This is especially vital for companies trying to determine a route forward despite shifting economic sands, tightening environmental regulations, and changes in the political and policy landscape. We’re therefore focussed, not just on providing data, but helping the sector understand how it can turn raw data into actionable insights that add value. Our most recent research, for example, has shown that the new Minimum Energy Efficiency Standards for commercial properties introduced earlier this year could impact over 19,000 commercial rental properties with non-compliant ratings. If not upgraded, this could cost the sector over £1bn annually. This highlights a crucial problem around trying to decarbonise the urban environment but also shows how data allows real estate owners and their advisors to make better decisions because of the depth of insight available to them.

It's imperative for proptech providers to continuously innovate. We often place ourselves in real estate lawyers’ shoes to understand their pain points and eliminate them through digitisation. Search Acumen research calculated that the average firm stands to save 115 hours a month through automation, while the sector stands to save over eight million hours each year through end-to-end digitisation, allowing lawyers to focus on what they do best.

This partnership, between tech firms and businesses, has defined the latter part of the last ten years and will continue to shape productivity over the next decade.

Andrew Lloyd, Managing Director Search Acumen

Page No 43

Global Award Winners 2023

2023

AWARDS WINNERS LIST

Winners Access Bank PLC – Botswana Access Bank PLC – Gambia Access Bank PLC – Kenya Access Bank PLC – Mozambique Access Bank PLC – Rwanda Access Bank PLC – South Africa Access Bank PLC-Ghana Access Bank PLC-Nigeria AdroFx AdroFx AdroFx Advans La Fayette Microfinance Bank (Advans Nigeria) Alfa-Bank Belarus Aljazira Takaful Alta Software Alveo Land Amana Takaful Insurance-SriLanka Amana Takaful Insurance-SriLanka Arab Financial Services Company-AFS Arab Financial Services Company-AFS Arca Fondi AsiaPay Page No 44

Award Titles Best Transaction Bank Botswana 2023 Most Leading Retail Bank Gambia 2023 Most Outstanding Commercial Bank Kenya 2023 Best Acquisition Bank Mozambique 2023 Fastest Growing Commercial Bank Rwanda 2023 Best Business Banking Solutions Provider South Africa 2023 Best CSR Retail Bank Ghana 2023 Best CSR Commercial Bank Nigeria 2023 Best Online Forex Training Brokerage Company Vanuatu 2023 Most Outstanding Micro Trading Forex Brokerage Company Vanuatu 2023 Fastest Growing CFD Broker Asia 2023 Best Customer Centric Microfinance Bank Nigeria 2023 Most Outstanding Digital Bank Belarus 2023 Most Leading Islamic Sharia Compliant Insurance Company Saudi Arabia 2023 Best Core Banking Solutions Provider Georgia 2023 ​Best Condominium Developing Company Philippines 2023 Fastest Growing Insurance Company Sri Lanka 2023 Most People-Friendly Insurance Company Sri Lanka 2023 Best New Digital Payment Solutions Provider Egypt 2023 Best Digital Payment Solutions Provider Bahrain 2023 Best Asset Management Company Italy 2023 Best Financial Technology CEO Hong Kong 2023-Joseph Chan

Global Award Winners 2023

Winners

Award Titles

AsiaPay – Malaysia AUCTUS Capital Partners AG AvaTrade Banco de Investimento Global Banco de Investimento Global Banco Industrial, S.A. BANK OF INDUSTRY BANK OF INDUSTRY Bank Of Mauritius Banka Kombetare Tregtare-BKT Being She Beltone Asset Management Berjaya Sompo Insurance Bite Investments Bite Investments Bualuang Securities Public Company Limited Bualuang Securities Public Company Limited Cardinal Stone Securities Caye International Bank China Asset Management Co., Ltd. China Shenhua Energy Company Limited CLIMBS Life & General Insurance Cooperative-Philippines Commercial Bank of Ceylon PLC Commercial Bank of Ceylon PLC Credit Bank Plc Decode Global Dukascopy-Switzerland easyMarkets EASYPAY ALBANIA Faraday Venture Partners Farazad Investments Fast Cover Travel Insurance First Capital Bank Botswana

Most Innovative Payment Solution Providing Company Malaysia 2023 Best SME Private Equity Firm Germany 2023 Best Mobile Trading Platform Spain 2023 Best Investment Bank Portugal 2023 Best Investment Bank Spain 2023 Best SME Bank Guat​emala 2023 Best Development Bank Nigeria 2023 Most Sustainable Development Bank Nigeria 2023 Best Central Bank Governance Mauritius 2023 Best Digital Bank Kosovo 2023 Most Admired Women Empowerment Organization UAE 2023 Best Equity Fund Management Company Egypt 2023 Best General Insurance Company Malaysia 2023 Best Investment Technology Solution Provider UK 2023 Most Innovative Alternative Investment Fintech Company UK 2023 Best Securities Brokerage Firm Thailand 2023 Most Trusted Investment Partner Thailand 2023 Most Admired Non Bank Brokerage Firm Nigeria 2023 Best Private Bank Central America 2023 Best Asset Management Company China 2023 Best CSR Energy Company China 2023 Most Outstanding NonLife Insurance Company Philippines 2023

Best Digital Bank Sri Lanka 2023 Best Bank for Remittances Sri Lanka 2023 Best Digital SME Bank Kenya 2023 Most Outstanding Online Forex Brokerage Company Australia 2023 Best Forex Bank Switzerland 2023 Most Outstanding Multi Asset Brokerage Company UAE 2023 Most Innovative Payment Solutions Provider Albania 2023 Most Excellent Venture Capital Firm Spain 2023 Most Outstanding Boutique Investment Bank Hong Kong 2023 Best Travel Insurance Company Australia 2023 Best Retail Bank Botswana 2023 Page No 45

Global Award Winners 2023

Winners

Award Titles

First Capital Bank Botswana First National Bank-Zambia FOO Forex Masters Fosun International Limited Fosun International Limited Freedom Property Investors FXPRIMUS FXTM Genero Capital LLC Gulf African Bank HonorFx HPS i-Tail Corporation PCL IC Markets ICICI Securities Ilani Concepts InvestChile JFD Group Ltd JMR Infotech Middle East FZC

Best Foreign Exchange Bank Botswana 2023 Best SME Bank Zambia 2023 Best Fintech Company UAE 2023 Best Forex Trading Education Company South Africa 2023 Best CSR Company Hong Kong 2023 Most Influential Family-oriented Consumer Brand Hong Kong 2023 Most Outstanding Property Investment Company Australia 2023 Best Forex Broker Cyprus 2023 Best Forex Education Provider Nigeria 2023 Best SME Financial Advisory Company UAE 2023 Most Leading Islamic Retail Bank Kenya 2023 Most Outstanding Forex Brokerage Company UAE 2023 Best Payment Technology Company France 2023 Best Pet Food Manufacturer Thailand 2023 Best Forex Broker Australia 2023 Best Digital Wealth Management Company India 2023 Best Digital Marketing Agency Kenya 2023 Best Investment Promotion Agency South America 2023 Best Multi Asset Investment Company Cyprus 2023 Most Leading Technology Integrator for Oracle Financial and Enterprise Solutions for Financial Institutions UAE 2023 Most Excellent Foreign Exchange Services UAE 2023 Best International Bank Uzbekistan 2023 Best General Insurance Company Tanzania 2023

Joyalukkas Exchange JSCB Tenge Bank Jubilee Allianz General Insurance Company Of Tanzania LTD Jubilee Allianz General Insurance Company Of Tanzania LTD KBC Asset Management NV KBC Bank-Belgium KCB Group KCB Group KdedeC Consultancy and Traınıng Company Liviti Mashreq Bank-UAE Mashreq Bank-UAE Mashreq Bank-UAE Mashreq Bank-UAE Mashreq Bank-UAE Page No 46

Best CEO(General Insurance Company )Tanzania 2023 -Dipankar Acharya Best Asset Management Company Belgium 2023 “Best ESG and Sustainable Asset Management Company Belgium 2023”.

Best Sustainable Bank Kenya 2023 Best SME Bank Kenya 2023 Best Aviation Consultancy Company Turkey 2023 Most Trusted Property Consultants Australia 2023 Best Retail Bank UAE 2023 Best Customer Centric Retail Bank UAE 2023 Best Bank For Online Product Offerings UAE 2023 Best Bank For Savings Solution Provider UAE 2023 Best SME Bank UAE 2023

Global Award Winners 2023

Winners Maybank Investment Bank-Malaysia Maybank Securities Singapore Maybank Securities Vietnam MetLife Emeklilik ve Hayat A.Ş.

Metropole Property Strategists Mitrade MoneyMatch Brunei MoneyMatch Brunei National Bank of Kenya National Bank of Kenya National Development BankNDB Bank National Development BankNDB Bank National Development BankNDB Bank NBS Bank NBS Bank Nedbank-South Africa Nord FX Nord FX Oman Insurance Company(Sukoon Insurance) Orbex Pacific Risk Advisors Ltd. Pacifico seguros Pan Asia Banking Corporation Petronas Dagangan Bhd Petronas Dagangan Bhd Petsy PremiumTrust Bank Profile Software​ PROMMT Qatar Insurance Company RealVantage Reassured Ltd RIF Trust Investments LLC Samuel & Co Trading Sarwa

Award Titles Most Sustainable Investment Bank Malaysia 2023 .

Best Brokerage Company Singapore 2023 Most Trusted Securities Brokerage Services Vietnam 2023 Most Outstanding Pension Company Turkey 2023 Best Property Investment And Wealth Strategists Company Australia 2023 Best Forex Fintech Broker Company Australia 2023 Best RegTech Company Brunei 2023 Most Leading SME Company Brunei 2023 Best Commercial MicroFinance Bank Kenya 2023 Best Customer Service Bank Kenya 2023 Best Financial Services Group Sri Lanka 2023 Best Bank for Sustainable Development Sri Lanka 2023 Best Financial Institution For Women Empowerment Sri Lanka 2023 Most Leading Commercial Bank Malawi 2023 Best Bank in Customer Experience Malawi 2023 Best Retail Banking Technology Implementation South Africa 2023 Most Transparent Forex Brokerage Company UAE 2023 Best Forex Affiliate Program South East Asia 2023 Best Online Insurance Company UAE 2023 Most Outstanding Forex Brokerage Company East Africa 2023 Best ESG Risk Advisory Firm Hong Kong 2023 Best Insurance And Reinsurance Company Peru 2023 Best Green Bank Sri Lanka 2023 Best IR Company (Oil & Gas) Malaysia 2023 Best Retail Marketing Company (Oil & Gas Sector ) Malaysia 2023 Best Pet Insurance Company Australia 2023 Fastest Growing Commercial Bank Nigeria 2023 Best Investment Management Company UK 2023 Best New Open Banking Payments Solution Provider UK 2023 “Best Domestic General Insurance Company Qatar 2023” Best Investment Technology Company Singapore 2023 Most Admired Life Insurance Company UK 2023 Best Citizenship & Residency Advisory Firm UAE 2023 Best Online Financial Education & Training Platform UK 2023 Most Outstanding Fintech Company UAE 2023 Page No 47

Finance Derivative Awards Inviting Banks, Companies and Business Leaders to participate in our Annual Awards Program 2024

Submit Your nomination now to awards @financederivative.com

www.financederivative.com

Global Award Winners 2023

Winners SinoPac Securities smeBank Stanbic IBTC Trustees Steward Bank Strategic Management Partners, Inc. SuperForex Tapoly Thai Union Group PCL Tianjin Port Development Holdings Limited Trading.md Trading.md Trigon Asset Management AS TrioMarkets Mauritius. uab bank Limited Vietcombank Fund Management WEMA BANK Yapi Kredi Asset Management Zeepay

Award Titles Most Innovative Digital Exchange Platform Taiwan 2023- DAWHOTOU APP Most Outstanding Fintech Company Lithuania 2023 Best Trust Company Nigeria 2023 Most Excellent Retail Bank Zimbabwe 2023 Best Turnaround Consulting Firm USA 2023 Best Forex Affiliate Program Africa 2023 Insurance Woman Of The Year UK 2023-Janthana Kaenprakhamroy Best CSR Company( Food Industry)Thailand 2023 Best Smart and Green Port Operating Company Hong Kong 2023 Best Trading Solutions Provider Company Moldova 2023 Best Forex Education Company Moldova 2023 Most Outstanding Fund Management Company Estonia 2023 Most Trusted Forex Brokerage Company Mauritius 2023 Best Bank Myanmar 2023 Best Fund Management Company Vietnam 2023 Best Digital Banking Platform Nigeria 2023 Best Asset Management Company Turkey 2023 Best Digital Payment Platform Ghana 2023

CALL FOR ENTRIES 2024 INVITING Financial Organizations

Banks

Business Leaders

Submit Your Nomination to Awards@financederivative.com OR Submit online at www.financederivative.com

Page No 49

FINANCE

Finance

Strengthening Supply Chain Security in Finance

Page No 50

I

n today's globalised marketplace, supply chains are critical in a wide range of industries, ensuring the seamless flow of goods and services. The finance sector is no exception, as financial supply chains rely on intricate networks to facilitate transactions, investments, and run the business. However, as supply chains grow in complexity and have an increasing reliance on technology, the need for robust supply chain security has never been higher. Katie Barnett, Toro’s Director of Cyber Security outlines why supply chains security matters in finance and what steps financial organisations can take to help keep them secure.

Why Supply Chain Security Matters in Finance The potential consequences are significant. A breach within the supply chain could lead to operational disruptions, substantial financial losses, and considerable damage to a company's reputation. Vulnerabilities within

Finance

understand who is processing your data, where it is stored, who can access it and where it might be vulnerable. If you don’t have visibility, you won’t be able to safeguard your assets.

• Assume Breaches Will Happen - In the ever-evolving world the assumption should be that breaches are inevitable. It's crucial to shift the focus from merely preventing breaches to how to mitigate the impact and recover effectively.

• Cyber Security Involves People, Processes, and Knowledge - Cyber Security is not solely a technology issue; it encompasses people, processes, and knowledge. Many breaches result from human error, underscoring the importance of robust cyber security practices throughout the financial supply chain.

financial systems can result in regulatory non-compliance, loss of confidentiality, integrity, and availability, and even the loss of critical intellectual property.

To safeguard your supply chain, security management systems play a crucial role, in protecting against both physical and cyber threats. While threats cannot be eliminated, implementing robust supply chain security measures are critical to your organisation's security.

Here are some of the key principles you can put in place: • Understand Your Supply Chain – Ensure you have mapped out the different parties, systems, and data flows within your supply chain so you

• Ensure Seamless Integration Between Physical and Cyber Security - There should be no gaps between physical and cyber security efforts.

Attackers can exploit physical security gaps to launch cyberattacks, and vice versa. A holistic approach to security is key.

What are the main security risks within a financial supply chain: • Third-Party Vendors with Access Suppliers, including cleaning services and software engineering firms, that have physical or virtual access to information systems, software code, or intellectual property, pose significant risks. It’s important to conduct supply chain due diligence.

• Poor Information Security Practices - Lower-tier suppliers with inadequate information security practices can introduce vulnerabilities into the financial supply chain. Organisations should

assess the security measures of their suppliers and provide guidance or assistance as needed.

• Compromised Software or Hardware - Purchasing software or hardware from suppliers with compromised products can jeopardise the entire supply chain (think SolarWinds or Kaseya).

Rigorous testing and validation of software and hardware components are essential to avoid such risks.

• Third-Party Data Storage - The risks associated with third-party data storage or data aggregators should not be ignored. There may be location or jurisdictional considerations that could affect regulatory compliance. You must have watertight contracts and security standards in place for third-party data management.

It’s important to understand the principles and risks to be able to secure your financial supply chain. Vigilance, proactive measures, and robust security management systems are key to ensuring the resilience and security of your financial operations.

Mitigating these risks requires a holistic approach to security, encompassing both physical and cyber security measures. It’s important that you and your organisation stay informed, adapt to emerging threats, and implement rigorous security practices to safeguard the integrity of your financial supply chain.

Katie Barnett, Director Cyber Security

Page No 51

Banking

Reasons to be cheerful about retail banking tech in 2024 Retail Banks are going into 2024 very changed from how they were only a few years ago. No longer monolithic conservative institutions, they are becoming dynamic digital service providers sensitive to how technology and customer behaviour is changing. In many ways 2024 will be business as usual but some positive trends will evolve significantly over the coming months.

BANKING

Putting the Digital Hub at the Heart of the New Bank Branch While most banks are cutting back their branch networks, they are showing lesser or greater commitment to making their remaining branches more fit for purpose for 21st century customers.

Page No 52

2024 should see some ambitious steps taken by some banks to embrace a new generation of digital self-service hubs to offer improved access to services and achieve operational savings and keep branches open. This is about next generation branch operating models of merging advanced self-service terminals with

human assistance, backed by remote banking capabilities through video links to central pools of specialist advisers on loans, mortgages and other products and services. This hybrid model could define future retail bank branches, providing customers the autonomy of self-service with the reassurance of expert guidance,

Banking

of a real difference. For example, despite much fanfare and publicity, the programme of opening new shared banking hubs has seen only a handful open their doors and the roadmap for new hubs is not getting anywhere close to how many traditional branches have been and will be axed in 2024. In the UK, the number one branched institution has even removed itself from this initiative and committed to its own branch network rather than this compromise.

So, 2024 could be a turning point with both customers and regulators demanding much more energy on getting shared banking services off the drawing board and into communities. There must also be a harnessing of in-branch digital technologies to make sure these hubs are much more than just pop-up shops to get vulnerable or undecided customers to sign up for online banking. In short, a shared banking hub 2.0 might become a reality in 2024.

Even more cybersecurity vigilance around ATMs

in a secure space. What is more this approach will not only streamline operations in 2024, but also uncover new revenue streams as branches evolve into multifunctional spaces.

A Rethink of Shared Banking Hubs The backlash from communities losing most of their bank branches and the resulting social pressure has led to the industry to respond with alternative arrangements for protecting access to cash. One example of this is the UK’s shared banking hubs, in which some banks share a single setting to deliver banking services in one location.

But these alternative banking initiatives are proving terribly slow to make much

2023 saw a resurgence in both physical and cyber-attacks on ATMs. For example, there were two new reports on jackpotting frauds. 2024 must see a broader adoption of sophisticated cybersecurity strategies, such as Zero Trust and micro-segmentation. These steps safeguard these essential banking terminals against evolving threats and make the case for employing secured channels with controlled certificates for each connection. As banks and ATM operators seek to invest in new self-service channels it is critical that this investment is always accompanied by a focus on cybersecurity to protect customers from cyber-attacks and fraud.

At the same time, AI is starting to influence ATM and ASST operations. 2024 will see Innovations in AI, such as predictive cash management and personalised services through intelligent chatbots, transform the self-service experience. It will enable these hubs to better understand the individual customer, their financial habits and proactively offer next best actions when they are accessing their cash and account.

More Frenemy Alliances in Retail Banking Faced with macro trends around changing customer needs and inflationary costs, expect to see even more cooperation and cooperation in 2024. Whether it is banks pooling ATMs on a national scale like in Belgium, branch sharing or partnerships between neo banks and legacy banks, the new normal for financial services will continue to look a little different to the past status quo.

In 2024, to thrive – and survive – banks and ATM operators must confront change positively. Thankfully, most banks and financial service organisations understand this need to not hide their head in the sands. They are seeking to strike the right balance between superior customer experience across all channels while achieving much greater operational efficiencies, security and agility. 2023 has set the scene for how 2024 will be another momentous year for retail banking strategies to evolve and address continuing, uncertain conditions.

Pace of AI Picks Up Chat GPT and generative AI became consumer phenomena in 2023. Banks and their suppliers are exploring how this technology can improve services and operations.

Mark Aldred, Vice President of Sales, International at Auriga

Page No 53

Technology

Andre Casterman CEO, TFDi.

Technology is a non-negotiable in closing the trade finance gap For some time now, the ever-increasing trade finance gap has been top-of-mind for asset originators, institutional investors, tech solution firms and industry leaders alike. Trade finance is critical to helping businesses including SMEs produce and move goods across markets, and in the creation of jobs, products, and economic growth globally.

A

t its core, the trade finance gap is a supply and demand issue. It speaks to the current market frenzy for trade finance, which vastly outstrips available assets. With the gap rising to a record $2.5tn in 2022, there is clearly a need to introduce further investment and liquidity to prevent it from continuing to increase, primarily through the introduction of trade finance assets to capital markets to attract further investment and liquidity. By doing so, more capital can be made readily available for businesses in urgent need of it – giving companies the tools they need to adapt strategies, be flexible

Page No 54

in their decision making, and to build a buffer against economic uncertainties.

The Trade Finance Investor Day, organised by the Trade Finance Distribution Initiative (TFDi), took place on October 20 this year, with the immediate goal of bringing industry stakeholders together to discuss the integration of technology in trade finance – working towards the long term goal of closing the trade finance gap. With industry spokespeople from more than a dozen countries, including leaders from Goldman Sachs AM, Deutsche Bank, Vayana, XDC Foundation and Allianz Trade, several key themes

dominated the discussion on ending the gap – namely the move towards digital trading, and the need to connect asset sellers and buyers through online marketplaces.

Automated distribution – essentially the securitisation and tokenisation of assets – helps to make trade finance assets accessible to capital markets by increasing the sales of securities to institutional investors, in turn opening up funding sources beyond traditional asset originators. Similarly, tokenisation can help make investment in trade finance more accessible to alternative investors.

Technology

Recent data from RWA shows that the market for tokenised U.S. Treasuries has witnessed an incredible surge of nearly 600%, reaching a valuation of $698 million. Platforms like Yieldteq, Tradeteq's freshly developed issuer of USTY tokens that represent shares in U.S. Treasury bond ETF, is an example of a business responding to tokenisation's rise to prominence in the digital asset sector.

Digital trade financing has also been bolstered by the UK’s recent Electronic Trade Documents Act, which provides for certain electronic trade documents to be granted the same legal status as their paper equivalents upon meeting the relevant criteria. Prior to the Act, English law did not recognise electronic documents as being possessable. The UK’s

pioneering approach to allowing investors to use digital documents for trade speaks volumes on the importance of the trade finance industry to the wider economy and recognises that the ability of investors to trade digitally is a key factor in pushing the sector forward.

The freedom of connectivity that technology allows puts today’s asset sellers and institutional investors in a position unlike any seen before. Online marketplaces are key to simplifying trade finance deals, facilitating agreements between parties, improving efficiencies, and reducing costs for asset sellers. A well-functioning marketplace can significantly enhance the investment process, not least because of its convenience and flexibility – but also because of

the enhanced transparency it prioritises. Ultimately, online marketplaces and connectivity increase market access, as users have more exposure to potential counterparties.

Facilitating the adoption of digital technologies and encouraging connectivity between asset sellers and asset buyers via online marketplaces are both essential elements in dissolving the trade finance gap. There is little doubt that achieving its closure will require concerted efforts from various stakeholders, but doing so paves the way for a global trade ecosystem that operates smoothly and efficiently, with all parties involved in international trade transactions having access to the financial resources they require – undoubtedly a worthy goal.

Page No 55

Banking

The new ways of mobile banking: Understading the security narrative

C

hallenger banks have essentially rewritten the playbook on mobile technology and mobile access in the banking sector.

Yet, the emergence of such banks has also raised critical questions about compliance, security risks, and data protection.

We ask Ollie Lenthall, Key Account Manager at Jamf, how challenger banks leverage mobile and personal devices to their advantage, the inherent security risks involved, and the strategies banks can employ to balance innovation with robust security measures.

How are challenger banks advancing mobile technology?

Challenger banks are leveraging cutting-edge tech stacks that are cloud-native and API-first, which allows them to be more agile and responsive to customer

Ollie Lenthall, Key Account Manager Jamf Source: 1 https://www.computerworld.com/article/3583935/lessonslearned-provisioning-new-employees-during-a-pandemic. html

2 https://www.itgovernance.co.uk/pci_dss#:~:text=The%20

PCI%20DSS%20(Payment%20Card%20Industry%20Data%20 Security%20Standard)%20is,security%20controls%20 around%20cardholder%20data.

Page No 56

needs. Whilst traditional banks often grapple with legacy systems, their tech choices make challenger banks more nimble, allowing quicker development and rollout of new features.

Unlike traditional banks, which have largely been brick-and-mortar operations, these institutions operate primarily as technology companies. They allocate resources more towards technological development and innovation than retail banking operations. This means developing cutting-edge apps and services aimed at modern consumers, thus centralising their customer engagement around mobile platforms.

It's also important to understand that such banks operate in a disruptive model, where the entire focus is providing financial services on the go. This is why a mobile-first user-experience is always their top priority.

Why is a 'mobile-first' approach attractive to customers and employees?

On the customer side, a mobile-first strategy streamlines the user experience. People are increasingly using their mobiles for everything from shopping to socialising, so it makes sense they'd also want a seamless, intuitive banking experience. Challenger banks deliver on this by offering user-friendly apps packed with features, developed on platforms that customers are already comfortable with, like iOS. For employees, particularly the younger demographic, working in a mobile-first, or more specifically in an Apple-first environment, feels like a natural transition.

Challenger banks take a 'Mac-first' or 'Apple-first' approach to their IT environments. For example, during the pandemic,

Banking

we saw Starling Bank give MacBooks to all of their employees to work remotely. This is to attract top talent, often right out of university, who are more accustomed to Mac and iOS devices.

Also, the innovative nature of these challenger banks offers a startup-like culture that is refreshing to many. There's a genuine sense that you're part of something groundbreaking, which can be incredibly motivating. It's a win-win situation, where aligning the business technology with both customer expectations and employee preferences creates a unique synergy that drives these banks forward.

What impact do mobile devices have on security risk?

For digital banks, the proliferation of personal and professional devices within their corporate network expands the attack surface. The blending of environments muddies visibility for security teams, who must track a continuously changing inventory of devices connecting to their networks. This can potentially introduce vulnerabilities, exposing banks to breaches that disrupt

operations and impacts customer trust.

There’s also the concern of security protocols on personal devices often not meeting enterprise-level requirements, making it harder to enforce uniform security policies and updates. This creates a variety of risks, and complicates compliance with regulations like the Payment Card Industry Data Security Standard, GDPR, and guidelines set by the Financial Conduct Authority.

How can banks empower the use of mobile technology without compromising security?

The first step is creating a Bring Your Own Device (BYOD) policy. Our latest survey in Europe found that 49% of enterprises have no formal BYOD policy in place, meaning they have no visibility or control over how employees are connecting personal devices to corporate resources.

Once banks have a robust BYOD policy in place, the next step is to develop a resilient security infrastructure, with the Zero Trust model at the centre. The Zero Trust

security model establishes a 'trust nothing, verify everything' approach, ensuring that every transaction is authenticated, authorised, and encrypted, regardless of its origin. Leveraging solutions like microsgementation can help banks achieve this ‘trusted access’.

Banks should also invest in advanced device management solutions that provide insights into whether the user's device is enrolled in a firewall, if it's encrypted, and even whether the passwords used are part of any security leaks. These systems can also flag unusual activities, like sudden data transfers, to indicate potential security risks.

Overall, organisations need to realise that It's not just about ticking off security measures on a checklist; it's about creating a holistic approach that combines cutting-edge technology with vigilant monitoring. The aim should be constructing a security fabric that's so tightly woven that, even if one thread is pulled, the whole structure doesn't unravel.

Page No 57

Wealth Management

What’s to Come for Travel Insurance Consumers in 2024?

- Phil Denman, CEO, Capacity Insights.

Page No 58

Wealth Management

Page No 59

Wealth Management

Bespoke and flexibility policies are key During the pandemic, imposed restrictions caused the travel industry to take a dip, and highlighted the importance of having suitable travel insurance. This year, the desire to travel by the British public is much higher than previous years, which has helped the industry bounce back.

Mintel’s UK Travel Insurance Market Report for 2023 revealed that almost three-quarters (74%) of British travellers believe that travel insurance is even more important now because of the cost-of-living crisis. With this being said, because many people in the UK are under a lot of financial stress, they may be cutting costs where they can. As a result, it could mean that many travellers are travelling without adequate insurance cover. Insurance companies have a window of opportunity here to ensure that their insurance policies are as inclusive, affordable, and accessible as possible.

The market report also highlighted that the preferred option for insurance appears to be single-trip policies, due to it being viewed as the most convenient and affordable way to get cover in the quickest time. In fact, for their next trip, a third (33%) of travellers plan to buy a single-trip policy.

In the coming years the travel insurance market’s value is predicted to increase. With all of these findings in mind, let’s look at what 2024 has in store for UK travel insurance consumers.

Page No 60

For many travel insurance providers, understanding what consumers need and want from their travel insurance cover has been a difficulty, as no two customers are the same. Based on where they’re travelling, their type of trip, and their personal circumstances including their medical history and age, one traveller will require a very different level of cover to another. This is the reason why many travel insurance providers have struggled to design insurance products to meet the array of customer expectations.

As customer expectations naturally evolve, a rise in bespoke travel insurance policies is expected in the years to come to meet the individual needs of each traveller.

Embedded Insurance is on the rise As the cost-of-living crisis has made saving for holidays more difficult, travel insurance has become more important than ever before, as customers want the reassurance that their hard-earned pennies are not going to be wasted. However, many consumers may be getting their travel insurance cover as part of an embedded insurance arrangement, as opposed to purchasing their cover from an insurer directly.

An example of this is when insurance cover can be added on when a traveller purchases their plane ticket or hotel room. As it’s usually done in the same transaction, it makes the process more streamlined and easier for the consumer. However, this does mean that many are simply buying the bare minimum travel insurance, risking travelling without sufficient and adequate cover for their specific trip.

In the coming years, embedded insurance could become the norm for the industry, with the possibility that consumers will be able to purchase comprehensive travel insurance cover without speaking to an insurance company directly.

Wealth Management

Simple and effective parametric cover Over the last three decades that I have been working within the field of travel insurance, insurers have predominantly focused on three key areas which are, cancellations, baggage, and medical expenses.

In the last few years, Fintech and embedded brands have begun to provide consumers with more streamlined products with a focus on high engagement. Their aim is to make travel insurance a far simpler product allowing their technology to deliver it more effectively to consumers. Who doesn’t want a less complicated travel insurance product?

Rather than compensating travellers with the exact loss experienced through lost baggage or a cancelled flight for example, parametric cover would mean that the customer would receive an agreed payment instead.

The heat wave and forest fires seen across many parts of the world this year caused a lot of travel chaos for many people. Even though catastrophe cover is covered to a certain extent by most insurance providers, it can be much easier with a parametric policy. For example, insurers can set a minimum and maximum temperature level and if reached, can provide their customers with repatriation and cancellation guarantees.

Everything could be made easier with AI The world is talking about how AI is shaking up all industries and there’s no exception for the travel insurance sector. Even though insurance products that are parametric and embedded can provide a straightforward and simple purchasing process for consumers, AI can take it one step further. By utilising AI insurers can leverage their consumer data and automate cover, pricing and policy recommendations that are personalised to meet the specific needs of their customers. As AI can do this straight away, when a customer makes a travel insurance inquiry, they can receive an accurate and tailored response instantly.

About The Author Phil Denman is the CEO of Capacity Insights and an insurance expert with over 30 years of experience. Having held senior roles in underwriting, sales and operations with several leading UK travel insurance companies, Phil founded Healix Insurance Services, a specialist intermediary business specialising in large, complex travel insurance schemes in 2005.

About Capacity Insights Capacity insights in a UK-based specialist underwriting MGA backed by ‘A’ Rated Insurers for medical, dental, travel and personal accident insurance. They create bespoke underwriting solutions based on market insight, data science and a commitment to exceptional customer service.

Capacity Insights work in partnership with SMEs and corporates to deliver tailored insurance solutions that truly benefit employees. To learn more visit: https://capacityinsights.co.uk

Page No 61

Technology

How cybersecurity is set to evolve in 2024 Cybersecurity has continued to dominate the headlines in 2023, from the ransomware attack targeting Royal Mail to the MOVEit software supply chain attack affecting 2,167 organisations and the mammoth DarkBeam data breach affecting 3.8 billion users. So, what measures will organisations take as we move into 2024 in order to bolster defences and where are threats likely to come from?

T

o begin with, we can expect the current reactive security stance, typified by vulnerability management, to transition to a more proactive one with the more widespread adoption of threat exposure management. This will enable organisations to alter their posture, looking at all types of potential exposures, including credentials, permissions, attack surfaces and paths, and cloud configuration, to ensure best practice.

Technological advances Many will already be using some of the processes and solutions associated with this approach, such as external attack surface management, cyber asset management, attack path management, digital risk protection, vulnerability assessment and management, continuous testing. However, next year we can expect these to become consolidated under a Continuous Threat Exposure Management (CTEM) programme as the practice becomes more mainstream.

Page No 62

Of course, generative AI (GenAI) in security will continue to be top of mind. When surveying 205 IT security decision makers in August 2023, 73% agreed that AI is becoming an increasingly important tool for security operations and incident response. In 2024, we’ll see GenAI integrated into security tools which will speed up operations such as incident response.

Organisations won’t necessarily require skilled analysts to write custom queries, freeing up security professionals to focus on higher value tasks.

We’re also seeing this technology make it more difficult for threats such as malware to bypass detections. Because AI is becoming increasingly good at learning what’s normal for specific environments, malware now needs to be tailored to meet the specific rules in individual environments to even stand a chance of bypassing detection. In this sense, defences will advance with AI. Top threats However, the same technology is also

Technology

being used by threat actors to craft attacks. Our survey found more than two thirds (68%) are worried about cybercriminals’ use of deepfakes in targeting organisations, for example.

this transition is now no longer an automatic choice for some organisations, leading some to take a slower approach to moving to the cloud, or even taking their most sensitive data back in-house.

There’s already evidence of how deepfakes and audio synthesisation are being used for nefarious purposes. In June 2023, a deepfake kidnapping scam saw AI used to impersonate a daughter’s voice to extort funds from her mother.

It isn’t difficult to use audio to replicate someone’s voice, which means we will need to rethink how we confirm people are who they say they are. Expect Generative AI to also be used more commonly to scale up information reconnaissance and automatic crafting of realistically targeted phishing messages.

It’s not just security driving this but cost too. According to Flexera’s state of the cloud report 2023, cost is now the number one concern with cloud, knocking security off the top spot for the first time in ten years. Organisations are spending significantly on cloud platforms and supportive security yet are struggling to achieve the projected economic gains.

Another growing threat is that of the insider. As perimeter controls have improved, with AI built into many security tools, organised criminal gangs are looking elsewhere and approaching employees. A disgruntled employee providing credentials can be given up to 70% of the extortion payment. It’s high reward and low risk – you can’t go to prison for being bad at spotting a phishing email – and for an extra 10% fee they’ll wash the money through legitimate shell companies.

Of course, the cloud won’t be scrapped.

Yet it’s possible that we’ll see some organisations temper the cloud-first, cloud-only imperative of recent years and become slightly more judicious about what gets moved to cloud, how fast, for what purpose, and even move a proportion of their key assets back on prem in 2024 as they seek to ease concerns surrounding both cost and security. Indeed, it’s these general themes of reducing complexity, spend and risk in more economically challenging times that are liable to prove the driving forces as we head toward the mid-2020’s.

Cloud falls from favour Finally, the level of exposure we are now seeing, combined with an increase in the compliance burden, is likely to see some retrenchment. Where it was thought that there would be a logical and continuous shift away from on-prem to the cloud,

Brian Martin, Director of Product Management, Integrity360 Page No 63

Page No 64