Take a look at the inner workings of any modern enterprise, and there’s a good chance you’ll find IT silos - islands of departmental data only loosely connected across the organisation. Such isolation presents a potential regulatory risk and undermines the rich productivity gains that digitisation should be driving across commerce, and yet these silos are becoming ever more commonplace.
Whereas ten years ago the primary cause for disjointed IT was the existence of outdated legacy systems within operations, now it is the advent of hosted independently-sourced solutions that is driving compartmentalisation across the IT landscape. With some options coming out of operational, rather than capital, expenditure, departmental heads have empowered themselves to take the matter of updating their processes and software into their own hands.
This empowerment has bred productivity gains, as departments have acquired best-of-breed functionality from systems to support their specific needs. Front and back office operations - from finance and business development to HR, logistics and marketing - have been invigorated by the introduction of solutions specifically implemented to fill operational gaps; address deficiencies and bottlenecks; and allow functionality which had been on managers’ wish-lists for a decade.
Unfortunately, these upgrades have often been made without consideration for the rest of the organisation. This narrow-minded piecemeal approach will return to haunt organisations across most sectors in the years to come, if the issue is not addressed on a company-wide basis.
The dangers represented by such silos are already becoming apparent within many firms: Reliability of data, in particular, is becoming ever more important for both regulatory and operational reasons. But if customer information is stored separately by each department that needs it, the numerous versions which a company possesses can gradually digress. In the case of a financial services organisation, for example, a loan approval department may end up holding a different set of data on a client than the online banking platform. The eventual outcome could range from frustrating or embarrassing the customer, to incurring bad debt and regulatory sanction.
At the very least, such a situation is highly inefficient from a business perspective, and an obstacle to good customer service. There are also cost implications in time and money: Time, because it is harder for employees who require data to access it; and money because the charges for storing and processing data are not inconsiderable, particularly given increasing regulatory and security requirements.
Therefore, as digital transformation is helping businesses to address individual operational problems, the time has come to reassess the approach and ensure that the entire information ecosystem is supporting the greater demands of internal and external customers.
Executive leadership must acknowledge that digitisation alone will not enhance information flow, innovation and productivity, unless there is a clear enterprise strategy to ensure information is made available and can be freely interchanged. Without this, content fragmentation is likely to accelerate, creating further challenges to aggregating, connecting and managing the flow of digital content.
There are inherent challenges for businesses looking to safeguard the efficient and secure access to enterprise-wide information, while retaining the benefits of a distributed approach to technology. One approach that is working well for an insurance client currently in a process of change and growth, is to encourage departments to first seek a solution to any IT need they have from one of a ‘family’ of trusted providers.
In this scenario, it is crucial to work with partners who are committed to ensuring the best for your company: whereas some IT providers will be inclined to make a sale of their own software at all costs, others will be happy to recommend a ‘friend’ from the trusted business family, where they feel that their rival can provide a more suitable product.
At the same time, this ’friends and family’ approach encourages supplier firms to work together on inter-operability and connectivity issues, and to adapt their own products, where necessary, to ensure a solution that is both bespoke and easily integrated into a wider corporate system. With such an approach, all the core systems can be hosted under a single roof - our client works with five core suppliers - and the momentum is towards further integration, not divergence, as each new applications is added.
However, even with such practices, institutions of any size can end up running hundreds of applications. It is essential to link those data repositories and ensure that they are accessible to all potential users, with as much ease as possible. This can be accomplished with an enterprise information hub: a unified information platform, which facilitates an end-to-end view of the organisation’s entire ecosystem.
Such a hub is a valuable tool for management and a driver of innovation, as it is used to speed feedback times and analyse data on whole-company performance. It is also invaluable when it comes to increasing efficiency and diligence at the ‘coal face’, by allowing all documents to be viewed on a single platform or device.
As digitisation drives further changes in years to come - some not yet conceived or planned for, the ability to integrate new systems and view operations holistically will be crucial, if organisations are to fully realise potential gains and remain efficient.
Website: www.hyland.com
The arrival of the GDPR (General Data Protection Regulation) is less than a week away. However, many businesses are still not prepared for the legislation shake-up that could see huge sanctions imposed for non-compliance. Experts at UK based IT support solutions company, TSG, explain for Finance Monthly what the key considerations are when it comes to the finance sector.
If your business is unprepared for GDPR, you are not alone. A Populus survey conducted only this year revealed that 60% of UK businesses do not consider themselves “GDPR ready”. It’s definitely not too late to put measures in place to ensure compliance with the regulation. Following the introduction of GDPR on 25th May, complying with GDPR will be a continuous journey.
What are the key areas you should be considering in light of the looming GDPR deadline?
Cyber-security tops the list
In this digital world, we produce, store and disseminate huge amounts of data. And a significant portion of that will be Personally Identifiable Information (PII); this is the data that matters under GDPR.
Even if, as a business, you don’t store customers’ sensitive data, you’ll still store the data of your employees. Therefore, all businesses must put measures in place to safeguard that digitally-stored data.
Encrypt everything
Arguably the most valuable cyber-security tool at your disposal is encryption. Not only is it a robust way to keep your data inaccessible to cyber criminals, it’s the only method that’s explicitly mentioned multiple times in the GDPR. Should any PII data you hold fall into the wrong hands – whether deliberately or accidentally – encryption will render it unintelligible. Encryption can operate at a file, folder, device or even server level, offering the level of protection most suited to your business needs.
Review your policies and processes
The GDPR requires you to implement policies that detail how you intend to process personal data and how you will safeguard that data. It also states that data controllers – that’s your business – must “adopt internal policies and implement measures which meet in particular the principles of data protection by design and data protection by default.” All new policies, whether specifically related to GDPR or not, must be compiled with a ‘privacy by design’ model. Existing policies, including your data protection policy, privacy policy and training policy should also be reviewed in light of GDPR.
Don’t forget subject access requests
Much of the coverage of GDPR has focused on two areas: data breaches and the potentially eye-watering fines. An area that’s arguably been overlooked is complying with subject access requests. Individuals can request access to the data you hold on them, verify that you’re processing it legally and, in some cases,, request erasure of their data – also known as the ‘right to be forgotten’. Under GDPR you’ll have only a month to respond to these requests, otherwise you’ll be at risk of non-compliance. More guidance on this can be found on the Information Commissioner’s Office (ICO) GDPR guide.
Don’t forget your reporting obligations either
Another element that’s received significantly less coverage is your reporting requirements. In the event of a data breach, businesses must report it to the Information Commissioner’s Office (ICO) within 72 hours of discovery. It’s especially important to note this, as failing to meet this obligation could be considered a bigger breach of the GDPR than the data leak itself. Both Uber and Equifax have come under fire in the past year for covering up breaches, reporting them late and keeping the extent of the breaches under wraps.
A good example to follow is Twitter. Following the discovery of a bug that stored users’ passwords in plain text – which is a bigger deal than it sounds – Twitter not only reported on the breach, but immediately informed its users of the bug, what caused it and the potential repercussions, and advised customers on how to keep their data safe. The second element of this is critical to GDPR too – if the breach poses a risk to individuals’ “rights and freedoms”, the victims of the breach must be informed too.
The key takeaway
The GDPR wasn’t created to punish businesses or to catch them out, but rather to empower individuals and consumers. Whilst there has been a lot of confusion around exactly what has been required for businesses, it’s clear that cyber-security is imperative, as is clueing up on your reporting and response obligations. It’s important to note that simply experiencing a cyber-attack or data breach won’t automatically result in financial punishment; the GDPR clearly states that, should you prove you put in place measures to protect your PII data, you won’t be hit with the most severe fines.
Just last month Facebook was found to have been providing user data to Cambridge Analytica, which would then allegedly use this data to influence users.
More recently it has been reported that music, and such apps as Spotify, could be providing the Bank of England with data on consumer moods. How far can behavioural data analysis get? Book lists, TV choices and even computer games could also be used to gauge consumer confidence. What are your thoughts on this?
This week Finance Monthly spoke to a couple of experts on this news, who gave their two cents on the matter.
Steve Wilcockson, Industry Manager, MathWorks:
Andy Haldane, Chief Economist at the Bank of England has revealed that researchers are using data from individuals’ Spotify playlist choices and data from games including World of Warcraft to gain insight into public sentiment – information that can be fed into financial models used to reveal important economic indicators such as consumer spending patterns.
Haldane has highlighted the potential of use of alternative data in helping institutions make sense of new sources of information and use it to gain useful insight, in this case into consumer sentiment that feeds economic modelling.
Approaching the anniversary of the global financial crisis reminds us of the critical importance that data and model governance must be impeccable. Alternative data, whether Taylor Swift download metrics, news sentiment derived from text analytics or geolocation-inspired datasets should therefore be used in conjunction with, rather than a replacement for, traditional economic indicators. As the Bank of England has rightly noted, it is also vital to ensure the proper anonymisation and safeguarding of public data, especially in the wake of the Facebook/Cambridge Analytic scandal.
Jacob Gascoine-Becker, Associate Director, Pragma:
Using Spotify data as a guide for consumer sentiment relies on semantic search techniques predicting user intent and meaning. Retailers frequently use these consumer insight tools to analyse social and digital conversations about their brand. However, the method has increasingly developed a reputation for inaccuracy due to the complexities of language, context and the British love of sarcasm.
At a basic level, it taps into sentiment - words understood as positive or negative and flag a post accordingly. For example, a post that says: “Thanks a lot for delivering my package four days after you promised” is tagged as positive, despite its clearly sarcastic tone. In Pragma’s view, the degree of separation between a sentiment expressed online and one inferred through a song choice will only add to this inaccuracy.
Despite current challenges in automating analysis, retailers wanting to stay on top of perceptions of their brand - and get ahead of operational problems - already pay close attention to online narrative. As the reliability of sentiment analysis improves, it’s easy to see this becoming a widespread leading-indicator of performance, incorporated into management KPIs in the future.”
Behavioural analysis is already used for targeting online. In its most rudimentary and obvious form, shoppers browsing a product on one website will be trailed by relevant banner ads for days afterwards. There are much more subtle ways that e-commerce operators are exploiting behavioural data. Increasingly retailers optimise what consumers see on their websites based on past digital behaviour, even making assumptions about items based on your location, web browser, ISP and so on. Amazon is a perfect example.
In-game behaviour as a confidence barometer is viable, particularly as many role playing games incorporate their own virtual economies. However, the greatest value for economists will surely lie in capturing data from more ubiquitous services, such as social media platforms, offering a more broadly representative consumer cross-section.
We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!
The Cambridge Analytica revelations have put the issue of data privacy front and centre in the minds of consumers, policy-makers and businesses. Facebook has taken up much of the media’s attention but with other recent and notable data breaches involving many millions of customer credentials, companies are being scrutinised for their data-handling practices like never before. Below Finance Monthly gains expert insight from Nick Caley, VP of Financial Services and Regulatory at ForgeRock, who delves deep into the implications of the data scandal on open banking.
In this era of heightened privacy awareness, it’s clear that there will be implications for businesses across all sectors.
This all raises significant questions for the financial sector. At a time when the banking industry is seeking to open up and encourage data sharing as part of the Open Banking initiative how should banks react to growing concerns from consumers about the risks and realities of online data sharing?
Firstly, UK banks need to prepare for their data management capabilities to be put under extra scrutiny. Banks are already well underway with their preparations for the EU General Data Protection Regulation, which comes into effect in May, and this provides them a solid foundation to work from.
However, the flurry of headlines around data protection and privacy will certainly make consumers more nervous about how and where their data is being used and, as a result, banks must be extra vigilant in order to maintain and grow customers’ trust.
For those already familiar with these issues, the reaction to the Cambridge Analytica story will not have come as a surprise. In a survey commissioned by ForgeRock before the Facebook revelations, only a third (36%) of UK consumers said they would be happy to share data in order to get a more personalised service. Yet over half (53%) said they would not be comfortable for their personal information to be shared with a third party under any circumstances at all. At the same time,
57% of UK consumers said they were worried about how much personal data they have shared online and 63% admitted that they know little or nothing about their rights regarding their own data.
Although this presents a challenge, incumbent banks do hold a considerable advantage over fintech companies and challenger banks when it comes to asking customers to share data: they are already trusted entities with a long track record of safely storing and managing customer data. As such, the demands of securing API access to high value customer data has been the focus of most Bank’s security teams for years. Investment in security expertise, well defined security operations and the latest technologies being tested ‘under fire’ and ‘at scale’ on a continuous basis lead to much greater levels of assurance. Standards such as OAuth 2, Open ID Connect and User Managed Access, which authenticate and authorize only trusted third parties, reinforce this access control model.
Our research shows that consumers do tend to trust banks and financial services companies to handle their personal data responsibly, especially when compared to more digitally native companies. ForgeRock’s survey found that banks and credit card companies were amongst the most trusted holders of personal data, with over 80% of UK consumers saying they trusted banks and credit card companies to store and use their data responsibly. In comparison, just 63% said they would trust social networks with the same data. This is very positive news for the UK banking sector particularly at a time when Open Banking is set to unleash a new wave of competition from digital-first competitors.
Why are banks considered trustworthy? Our research revealed a clear correlation between how in control of their data consumers feel, and how much they trust companies. Banks and credit card companies were ranked among the organisations that gave users most control over their data. This suggests that, particularly at a time when attention is being paid to data policies and privacy controls, banks must continue to invest in systems and processes that put control over data firmly in the hands of users.
The management of customer consent must be central to this strategy as it will only be possible to maintain and build trust if customers know they can turn data sharing on and off at their convenience. Putting consumers more in control of their data through consent and giving users transparency and control over how and under what circumstances their information can be used will allow banks to not only ensure compliance with Open Banking and GDPR, but also establish a basis on which they can build trusted relationships with their customers. They will then be well-placed to offer additional, more personalised services to their existing customers, allowing them to add valuable real time, context-based insights and offers for users, that in turn will create new revenue opportunities.
The Cambridge Analytica scandal combined with the regulatory changes that GDPR and Open Banking will bring appears to mark a turning point in how businesses approach issues around data sharing. The good news for banks is that they are already starting from a strong position as trusted holder of personal data. They now have a real opportunity to build on this and become true leaders in the next era of digital finance - by giving customers greater visibility, choice and control over their own data.
The Lords Select Committee recently issued a report: “AI in the UK: ready, willing and able?”. It outlines the burgeoning AI industry including the public understanding, engagement and design of AI and how the UK can become best placed to build and develop safe, secure and successful AI businesses.
Louis Halpern, Chairman of Active OMG, the British company behind the natural language conversational self-learning AI, Ami, spoke to Finance Monthly below.
AI will penetrate every sector of the economy and has tremendous potential to improve people's lives. I am pleased the report aims to set out a positive framework for the UK AI industry. However, the proposal is not enough to make the UK a leading destination to build and develop AI businesses. We embrace technology when it is safe, normal, and when it makes our lives better. If AI policy is directed at these elements we have the opportunity to make the UK a world leader.
For us at Active OMG safe means personal privacy. Consumers need to know their data is safe. We have to avoid the AI industry being tainted with Facebook Cambridge Analytica type scandals.
We use personal data so our clients’ customers have a better experience. When we apply the machine learning part of what we do the data is anonymised. We do not know if they are Mr or Mrs Jones, Chen or Blackwell. We are not concerned with the details of individuals. There is complete separation of personal and anonymised data.
Overcoming fear needs education, not reaction to “scandal’. The government should be educating individuals on how their data is going to be used and kept safe by the current legislation. We suggest a government information campaign, like the drink driving or Aids campaigns of the past. By explaining the data issue to people it will proactively help normalise AI.
The report talks about investing in Phd programs and cultivating AI companies directly from academic research. Yes, but we need to start programs in schools now to teach children how to use AI as a tool to thrive in a world where AI is normal. In the Pan Canada AI strategy they argued that AI should be taught alongside degrees, e.g. Sociology with AI. To become a leading AI nation, Britain must adopt a similar stance and ensure AI is intrinsic and everywhere.
Economies thrive on entrepreneurship. Entrepreneurs will develop the AI that will change our lives, like the iPhone and the personal computer. These devices cut across every industry and benefit every consumer. Government needs to follow the same model. The report talks about specific Government departments and initiatives; these will stifle, not accelerate. Every Government department needs to set an example by making policy that puts AI at the heart of what they do. No western country has been this brave.
When electricity became available it’s light quickly illuminated everything. To be a world leader, the UK needs to ensure AI’s light shines in every corner.
The controversy surrounding Facebook and privacy issues has made news headlines. However, data brokerage and the miss-use of information is nothing new.
The subtle manipulation of the way in which users respond to certain information stimuli is currently a hot topic of conversation. This after the recent Facebook/Cambridge Analytica scandal literally broke the internet in a way that no amount of funny cat video footage has ever managed to do. Whilst it certainly is no surprise that Facebook users find this kind of intrusion on privacy and thought manipulation to be exceptionally disturbing, it is interesting to note that many people consider this to be news, when in fact, it has been going on for a very, very long time. The only difference being that it was called by a different name.
The truth is, data, or information brokers have been around and doing business for almost as long as what the internet is old. It’s a multi-billion dollar industry and its not bound to come crashing down anytime soon. In many ways, the need for this type of intellectual trade is fuelled by everything from over-supply to economic recessions.
Companies have become increasingly more desperate to get a grip on effective marketing in order to sell their products to the best possible target market. Making the most profit from the least amount of effort and capital input has become the driving force behind every conceivable marketing strategy under the sun.
Information Is Money
Data brokers collect everything from census information, motor vehicle and driving records, court reports and voter registration lists, to medical records and internet browsing histories. The idea is to gather as much information about every conceivable human profile as possible.
This information is then categorised and grouped into typical market profiles, providing an in-depth analysis on everything from religious affiliation, political affiliation, household income and occupation to investment habits and product preferences.
It doesn’t require a technological genius to see why this information is worth thousands of dollars.
No Control
Individuals are usually not able to determine exactly what is known about them by data brokers. Most data brokers hold on to the information that they have obtained for an indefinite period of time. Loosely translated: the information may very well never go away. Part of the efficacy of the gleaning process is that historical information can be compared with the latest information in order to better determine customer trends as well as the rate at which certain dynamics evolve.
A very scary thought indeed, especially considering the fact that entities like social media giant Facebook still consider allowing companies like Cambridge Analytica to continue trolling its pages from an insider’s perspective, knowing full well that this is the case.
More Than Marketing
Moving away from the manipulative marketing point of view, information in general can be a very sensitive issue. The truth is, somewhere along the line, many of us have dabbled outside the borders of a marriage or relationship or have even discussed sensitive information relating to criminal behaviour and activities with contacts via instant messaging apps.
It’s safe to say that most of us would pay considerable amounts of cash in order to protect information of this nature, especially since the leaking of this information to interested parties can have dire effects on the very quality of our lives.
When considered in this light, blackmailing activities become a real and imminent danger, no longer something found only in crime and drama series on television. There’s also the risk of users information being used in scams, and con-artists are well versed in identity theft and assuming other peoples data as their own.
Its Free For A Reason
People have long been aware about the many dangers of over-sharing information on social media. Many people have fallen prey to identity theft and have lost everything but the clothes on their backs due to this. Imagine now the dire nature of the situation now that the problem is no longer criminals trolling social media pages that have not been sufficiently hidden from the public eye, but instead, are being handed sensitive information on a silver platter, for a minimal fee.
The question begs: is Facebook more than just a social media platform? Or has it been headed towards being a modern-day surveillance tool all along?
Perhaps there is a more sinister reason behind the fact that its free, and always will be, than what meets the eye.
Banks are increasingly using your data intelligently and effectively. Let’s find out how far they can go. Julius Abensur, Head of Industry and Financial Services at Relay42, explains.
Technology has advanced at a rapid pace in banking and our demands have changed, making our data – and banks using it properly to benefit us – more important than ever.
Through various utilities, facilities, transactions and experiences, banks have more opportunities to break down traditional barriers to offer us a more seamless experience across channels and outcomes, rather than products and functions. By using our data effectively, they can deliver us a unique journey, based around our personal interests and most frequently-used channels. The benefits to banks are clear; customers who are fully engaged bring an average of 37% more annual revenue to their primary bank than customers who are disengaged.
To achieve the levels of engagement and loyalty we now expect, banks need to ensure they are using our data wisely and responsibly in order to nurture our trust. If banks aren’t using our data to provide us with a better and more valuable user experience, it won’t be long before we stop sharing it altogether. This will only be made easier in light of regulations such as GDPR and PSD2, which are placing stricter rules on how banks use our information.
So how can banks use our data more effectively, while maintaining our trust?
Merging the real and digital worlds
Impending regulation changes are slowly pushing banks and disruptive fintech start-ups to collaborate, rather than compete, and this is opening up a whole new world of opportunities for us as customers. Banks possess a stronghold of customer data ripe for delivering personalised and useful experiences, and by partnering with fintechs who specialise in innovative, agile technologies, they can deliver true value.
For example, let’s say that a customer (we’ll call him Bill) has just paid for dinner at a restaurant with his friends, and they all want to split the cost and pay Bill back. By partnering with the right fintech and sharing customer data across platforms with a smart data platform, the bank can make this repayment process easier by enabling Bill to distribute payment requests through an online chat service via a single link. By using this link, Bill’s friends can then repay him instantly regardless of who they bank with.
By using data management technology to responsibly share data across different platforms, banks can launch intelligent customer experiences and solutions relatively quickly across both the real and the digital world. This offers clear advantages for customers, who can now use more intelligent services to increase convenience. And this is just the beginning.
Connecting with other industries
When it comes to delivering truly beneficial experiences, banks need to be looking beyond the industry they serve. We all have a vast range of interests that can be capitalised upon through the sophisticated use of data, and this can be achieved by connecting with other industries.
Take the travel industry, for instance. As seamless partnerships between payment providers, booking interfaces and airlines become ubiquitous, travel and financial services leaders need to take a sideways glance to carefully choose trusted partners, value propositions and technology.
To translate this into a practical example: Let’s revisit Bill. Bill has a Global Travel Plus credit card, which is issued by his bank and connected to a global airline, granting him rewards and discounts when he travels. The bank has also created a service called the Travel Plus app, which offers relevant recommendations related to Bill’s journeys and behaviours, and is orchestrated by the bank’s customer journey technology.
Through intelligent cross-pollination of insights and data, the bank can deliver a suite of offers based on Bill’s loyalty and customer value, including frequent flyer points and hotel discounts. Then, through contextual retargeting, Bill’s bank can send financially-related recommendations for his next trip to Barcelona, from the best insurance rates to lock-in forward Euro rates. This kind of data-driven personalisation is what we now crave, and simply would not be possible without banks connecting with other platforms and industries.
Stitching data intelligently
Data is undoubtedly the key to delivering the innovative, highly personalised banking experience that we are all seeking. For banks, the benefits are clear - customer retention is around 14% higher for companies that effectively apply big data and analytics to deal with velocity.
However, if banks are to achieve this then they need to make sure they use our data intelligently. As we have explored, using data management technology can go a long way to effectively stick data together to create a single customer view — the foundations for orchestrating right customer experiences — for the right people. Additionally, partnering with companies both inside and outside of the financial sector can open up new opportunities for next-generation loyalty and engagement.
Data released in Creditsafe’s Prompt Payment Formula 1 Standings, has revealed that, on average, Formula 1 teams pay 16% of their invoices late by an average of 10.5 DBT (days beyond the agreed payment terms), despite a combined turnover of over £3.6 billion.
Red Bull was found to be the worst offender, paying almost a third (31%) of its invoices to suppliers late by as many as 16 days beyond agreed terms. This is despite the team’s success, coming third in last season’s constructors’ standings, the exciting team rivalry between Daniel Ricciardo and Max Verstappen, and a turnover of close to £200 million.
In comparison, despite a disastrous 2017 season ending in ninth place and multiple engine failures affecting the team’s performance, McLaren was found to be the most prompt payer of the group, with 93% of its invoices paid on time. Of the 7% paid late, McLaren had a DBT of nine days.
Similarly, Torro Rosso, which came seventh in last season’s standings, was the second most prompt payer of the group, paying less than 10% (9.02%) of invoices late with a particularly low DBT of five days. While Ferrari joined Torro Rosso with the joint lowest DBT, 22% of its invoices were paid late, dragging it down the standings.
Led by Drivers’ Champion Lewis Hamilton, Mercedes topped the F1 Standings in 2017, but in terms of late payments, the team sat firmly in the middle of the table with 11% of invoices paid late and a slightly below average DBT of 11.
Rachel Mainwaring, COO, Creditsafe Group said: “In recent years we have seen the emergence of a late payment culture in the UK. Even in Formula 1, with the huge amount of money that is available to teams, late payment is rife and noticeably, none of the teams pay their invoices on time.
“Late payments can be a huge problem for businesses, whether dealing with the huge sums of money in F1, or smaller amounts of daily business expenses. It can leave companies with a potentially dangerous financial shortfall and all businesses, particularly those at the top of the podium should be fulfilling their obligations to suppliers.
“However, it is interesting to see the lower performing teams, such as McLaren and Torro Rosso, beating out competitors when it comes to prompt payment. There’s no doubt that if McLaren’s reliability last season had been as good as its prompt payment rate (97%), Fernando Alonso would have been a happier driver!”
Creditsafe’s Prompt Payment Formula 1 Standings
| Team | % Invoices Paid on Time | % Invoices Paid Late | Number of Days Beyond Term (DBT) | 2017 F1 Constructors’ Standings | Annual Turnover | |
| 1 | McLaren Formula 1 | 92.69% | 7.31% | 9 | 9 | £ 179,781,000.00 |
| 2 | Scuderia Toro Rosso | 90.98% | 9.02% | 5 | 7 | £ 131,976,503.84 |
| 3 | Renault Sport Racing Ltd | 89.04% | 10.96% | 12 | 6 | £ 119,671,000.00 |
| 4 | Mercedes-Benz Grand Prix Ltd | 88.91% | 11.09% | 11 | 1 | £ 289,421,000.00 |
| 5 | Scuderia Ferrari | 78.38% | 21.62% | 5 | 2 | £ 2,540,519,579.34 |
| 6 | Williams Grand Prix Engineering Ltd | 77.41% | 22.59% | 15 | 5 | £ 167,415,000.00 |
| 7 | Aston Martin Red Bull Racing | 69.23% | 30.77% | 16 | 3 | £ 197,949,000.00 |
Data not available for: Force India, Haas and Sauber.
(Source: Creditsafe Group)
Protagonist of this week's news, Alexander Nix is the executive at the centre of the Cambridge Analytica and Facebook controversy surrounding political campaign influence, sly data based marketing and supposed behind-our-backs data harvesting through everyone's favourite social media platform.
In this video CEO Today delves in to the life of Alexander Nix, a very private individual, listing some hobbies, interests and much of what he's been up to to get where he is today.
Sharing confidential information is a data protection issue with more and more red tape every day. With more and more apps differentiating encryption methods, this becomes even harder to manage for authorities. Below Finance Monthly hears about the potential for banking fraud via apps such as WhatsApp from Neil Swift, Partner, and Nicholas Querée, Associate, at Peters & Peters LLP.
As ever greater quantities of sensitive personal data are shared electronically, software developers have been quick to capitalise on concerns about how susceptible confidential information may be to interference by hackers, internet services providers, and in some cases, governmental agencies. The result has been an explosion in messaging apps with sophisticated end-to end encryption functionality. Although ostensibly designed for day to day personal interactions, commonplace services such as WhatsApp and Apple’s iMessage use end-to-end encryption to transmit data, and more specialised apps offer their users even greater protection. Signal, for example, allows for its already highly encrypted messages to self-destruct from the user’s phone after they have been read.
The widespread availability of sophisticated and largely impregnable messaging services has led to a raft of novel challenges for law enforcement. The UK government, in particular, has been outspoken in its criticism of the way in which end-to-end encryption offers “safe spaces” for the dissemination of terrorist ideology.
Financial regulators are becoming increasingly conscious of the opportunity that these messaging services present to those minded to circumvent applicable rules, and avoid compliance oversight. 2017 saw Christopher Niehaus, a former managing director at Jeffries, fined £37,198 by the Financial Conduct Authority for sharing confidential client information with friends and colleagues via WhatsApp. Whilst the FCA accepted that none of the recipients needed or used the information, and the disclosure was simply boasting on Neihaus’ part, it was only his cooperation with the regulator that saved him from an even more substantial fine.
That same year saw Daniel Rivas, an IT worker for Bank of America, investigated by the US Securities and Exchange Commission and plead guilty to disclosing price sensitive non-public information to friends and relatives who used that information. One of the means of communication was to use Signal’s self-destructing messaging services. Rivas’ prosecution saw parallels with the 2016 conviction of Australian banker Oliver Curtis, an equities dealer, for using non-public information that he received from an insider via encrypted Blackberry messages.
These examples are likely to prove only the tip of an iceberg; given that encrypted exchanges are by definition clandestine, understanding the true scale of the issue, outside resorting simply to anecdote, is itself an unenviable task for regulators and compliance departments. Whilst those responsible for economic wrongdoing have often been at pains to cover their tracks – perhaps by using ‘pay as you go’ mobile phones, and internet drop boxes to communicate – access to untraceable and secure communication is now ubiquitous. It is difficult to imagine that future regulatory agencies will have access to the material of the same volume and colour that was obtained as part of the worldwide investigations into alleged LIBOR and FX manipulation.
How then can regulators respond? And how are firms to discharge their obligations both to record staff business communications, and monitor those communications for signs of possible misconduct? Many firms already ban the use of mobile phones on the trading floor, but such edicts – even where rigorously enforced – will only go so far. Neither Mr Rivas, nor Mr Neihaus, would have been caught by such a prohibition.
There may be technological solutions to technological problems. Analysing what unencrypted messaging data exists to see which traders are notably absent from regulated systems, or looking for perhaps tell-tale references to other means of communication (“check your mobile”), may present both investigators and firms with vital intelligence. Existing analysis of suspicious trading data may assist in identifying prospective leads, although prosecutors may need to become more comfortable in building inferential cases.
Fundamentally, however, such responses are likely to be both reactive, and piecemeal. Unless the ongoing wider debate as to the social utility of freely available end-to-end encryption prompts some fundamental rethink, the need to effectively regulate those who participate in financial markets – and thus the regulation of those markets themselves – may prove increasingly challenging.
The international community’s anti-money laundering watchdog is on UK soil putting the country through its paces.
Inspections of Britain’s defences against terrorists and money launderers by the Financial Action Task Force (FATF) are relatively rare but hugely important. The last evaluation was in June 2007 and negative findings can severely impact the country’s reputation in the war on terrorist financing and the laundering of criminal proceeds.
During the two-week visit, the UK has to prove to officials from some of the other 36 participating FATF countries that it has a framework in place to protect the financial system from abuse. The top secret inspectors have an “elaborate assessment methodology” but those involved are not allowed to talk publicly about the visit. The results of the inspection will be presented at an FATF Plenary session in October.
Julian Dixon, CEO of specialist Anti-Money Laundering (AML) and Big Data firm Fortytwo Data, comments: “AML supervisors are going to be on high alert this week because it’s not just public sector bodies who are inspected, but private organisations too.
“It’s also extremely timely, given the recent poisoning of ex-Russian spy Sergei Skripal, his daughter Yuliain and a policeman who came to their aid.
“The UK has been accused of being a soft touch for gangsters, politically exposed persons (PEPs) and criminal gangs, a theme that recently entered the popular imagination because of the TV series McMafia, written by journalist Misha Glenny.
“It’s unclear if this still holds true in the UK today, and that’s what the FATF are here to find out.
“It is up to the country being inspected to prove they have the right laws, systems and enforcement in place and the potential for reputational damage is high.
“After a recent inspection of Pakistan, FATF gave the country three months to prove it is doing enough to stay off an international watch list of those failing to curb the financing of terror groups.”
(Source: Fortytwo Data)
Attempts have been underway in Parliament recently to help tenants improve their creditworthiness. This includes new legislation to make lenders give rental payments the same weight as mortgage premiums, including most recently Big Issue founder Lord Bird’s draft Creditworthiness Assessment Bill.
Open Banking - ahead of any future legislation - offers tenants the potential to achieve improved creditworthiness at no extra cost.
The launch of Open Banking in the UK last month, backed by nine key UK banks, is now enabling renters who want to get a mortgage to improve their creditworthiness with an ease that would have been unimaginable only a year ago, says CreditLadder.co.uk.
Instead of onerous paperwork or agent/landlord permissions - as has been the case in the past - tenants are now able to report their rental payments via mobile/online platforms simply, quickly and for free.
Tenants tell their bank they want the platform to ‘read’ their rental payments and pass this information on to a credit reference agency, such as Experian.
“When we launched our Open Banking service last month we were acutely aware that the take up maybe held back given the newness of the technology,” says CreditLadder CEO Sheraz Dar.
“But so far Open Banking is proving popular with our customers. The number of people signing up to our service has doubled and last week 80% of those applying to join our service now do so via Open Banking.
“Many of the UK’s 11 million private renters are finding it harder and harder to get on the property ladder, so it’s no surprise that a service like ours which gives them a leg-up is proving popular.
Case study
Civil Servant Ian Cuthbertson, 33, from Norwich is the first person in the UK to sign up and register his rental payments with a credit agency using CreditLadder’s Open Banking service, which is provided through an FCA-regulated partner.
Ian pays £700-a-month for a two-bedroom barn conversion he shares with his partner on the outskirts of Norwich, payments that are now being added to his credit history via CreditLadder.
“My partner and I are planning to buy a home in a few years’ time so I’ve been realising more and more that I need to improve my chances of getting a mortgage,” he says.
“So I’ve been looking at how I manage my credit cards and trying to make little tweaks here and there to my finances so that I present myself as trustworthy to lenders.
“I was thinking to myself that I pay the rent on time every month and wondered if that could count towards my credit score. And then I saw an article on MoneySavingExpert.com about CreditLadder so I decided to sign up.
(Source: CreditLadder)
