www.globalbankingandfinance.com 41Issue SubashSharma Banking and TransformationtheofDigitalSpace, With Absa Award-WinningBank’sHeadofDigitalBanking
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Turn to page 30 to read the full interview with Joseph Chan, CEO, where we explore the company’s products and services and its approach to technology among other topics. We strive to capture the breaking news about the world's economy, financial events, and banking game changers from prominent leaders in the industry and public viewpoints with an intention to serve a holistic outlook. We have gone that extra mile to ensure we give you the best from the world of finance.
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I am pleased to present Issue 41 of Global Banking & Finance Review. For those of you that are reading us for the first time, welcome. This issue is filled with exclusive insights from financial leaders across the globe.
Issue 41 | 03 EDITORS LETTER Wanda Rich EditorStaycaught up on the latest news and trends taking place by signing up for our free email newsletter, reading us online at http://www.globalbankingandfinance.com/ and download our App for the latest digital magazine for free on Google Play and the Apple App Store Chairman and CEO Varun Sash WandaEditor Rich email: wrich@gbafmag.com Head of Distribution & Production Robert Mathew Project Managers Megan Sash, Amanda Walker Video Production and Journalist Phil RickBusinessChanelClientJessicaGraphicFothergillDesignerWeisman-Pitts&AccountsManagerRobertsConsultantsSaikia,MonikaUmakanth, Stefy BusinessAbraham,Analysts Samuel Joseph, Dave D’Costa Phone:Advertising+44 (0) 208 144 GlobalUnitedLondon,100AlphaGBAFmarketing@gbafmag.com3511Publications,LTDHouseBoroughHighStreetSE11LBKingdomBanking&FinanceReview is the trading name of GBAF Publications LTD Company Registration Number: 7403411 VAT Number: GB 112 5966 21 ISSN 2396-717X. The information contained in this publication has been obtained from sources the publishers believe to be correct. The publisher wishes to stress that the information contained herein may be subject to varying international, federal, state and/or local laws or Theregulations.purchaser or reader of this publication assumes all responsibility for the use of these materials and information. However, the publisher assumes no responsibility for errors, omissions, or contrary interpretations of the subject matter contained herein no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the publisher editor FROM THE Dear® Readers’
Featured on the front cover is Subash Sharma, Head of Digital Banking, Absa Everyday Banking. Founded in 1991, the Absa Group is one of Africa’s largest financial services groups with a presence in 15 countries. It offers personal and business banking, credit cards, corporate and investment banking, wealth and investment management, and bank assurance. The bank’s capabilities and expertise have earned numerous awards, including the Global Banking & Finance Review 2022 awards for Best Digital Bank South Africa, Excellence in Innovation - Banking Product South Africa for its virtual assistant Absa Abby, and Head of Digital Banking of the Year South Africa for Subash Sharma. I spoke with Subash about the bank’s success, the transformation of the digital space and their plans for the future. (Page 24) Founded in 2000, AsiaPay is known as one of the leading digital payment processing service and solution houses in the Asia Pacific region. Their integrated payment services support the acceptance of credit and debit cards, netbanking, digital wallets, BNPL (buynow-pay-later), crypto payment and many other local payment methods in Asia Pacific.
Impero Software Modernising payroll tech: why traditional technology is outdated Paul
The value
04 | Issue 41 CONTENTS 36 Why Investors Need to Focus on ESG in 2022 Gediminas Rickevičius, VP of Global Partnerships at Oxylabs IHT is on the rise - estate planning is more important than ever Jack Rose, Head of Retail Sales at Triple Point INVESTMENT 08 16 42 BUSINESS The role of governance and controls in meeting changing ESG expectations Erik Saito, SVP, General Manager of EMEA & APAC at Workiva A Better Look: Family Offices, Technology and Beneficial Ownership Nicole Eberhardt, Chief Strategy Officer, Ledgex Designing the workplace with neurodiversity in mind Gerard Milliken, Divisional Director - Design, Optima Products The complexity of managing identity data and privileged access during M&A Chad McDonald, CISO at Radiant Logic 20 06 FINANCE
Maritime
CloudPay 44 28 48 12
personalization in banking Philip
current crisis Alex
The Future of Finance Yahalom, Co-Founder and CTO of Rewire the financial habits of Millennials and Gen Z Kutait, CEO and Founder of W1TTY challenges: Eliminating settlement risk in Sissens, CEO of RTGS.global must find their voice for people amidst the Young, MD, Futures of hyperBush, Lead, Business have to help drive down trade’s Ring, Global Head of Trade Technologies ESG, vs. the Manager How the can remain ahead CEO, Bartlett, CEO,
Services Banks
carbon emissions Simon
Authorisation in
Pole Star 34 18 46 TECHNOLOGY Authentication
Unpacking
Post-trade
Ammar
financial markets Dave
financial sector
in the fight against cyber-attacks Justin Reilly,
global
SCA era Senior Product
We Are
Amazon Connect
Saar
40 22 BANKING Banks
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Issue 41 | 05 CONTENTS COVER STORY & EXCLUSIVE INTERVIEWS AsiaPay: Adopting latest technologies in Market-Led Innovation to Become an APAC's Leading digital Payment Service Provider JosephAsiaPayChanCEO 30 Banking and Transformationtheof the Digital Space, With Absa Bank’s Award-Winning Head of Digital Banking Subash Sharma Head of Digital Banking Absa Everyday Banking 24
Fintech trends in 2022 are re-framing the way we do finance. These are not fleeting fads, or far-off future predictions – fintechs are fast transforming the financial sector, and the pace is quickening. Businesses that want a stake in future financial markets need to keep pace with these fintech developments, if they’re serious about securing continued growth.
The rise of ‘digital-only’ banking I'm not talking digital-only payments, but digital banks. The technology is already here, and there are many benefits to eschewing bricks-andmortar for the virtual world. Digital banking and free-floating financial platforms are already changing the way people bank today - generation Z, digital natives born with a smartphone in their hands, are particularly open to new digital experiences and willing to trust a digital-only bank. As they move through their careers, it’s not hard to imagine a day – in the not-too-distant future – when most of the world’s banking takes place entirely online.
A proliferation of vertical banks With the rise of digital banking comes an increasing number of vertical banks – financial services tailored to the specific needs of smaller groups of people. Several fintechs, including Rewire, have homed in on a specific audience, such as freelancers or small businesses (or migrants in our case), and are providing tailored financial services to meet their unique needs. There are many segments of society that have been underbanked and underserved in the past, and these groups represent huge potential for fintechs - or any financial institutions - that see opportunities to expand services to these growing markets.
From competitors to collaborators
A great example of the way mobile payments are driving change is through Google Pay and Apple Pay, which have encouraged more and more people to leave behind their physical credit and debit cards. As new payment methods emerge, financial institutions that adopt digital payment features will be the ones to attract and retain customers.
The emergence of Banking-as-aService In recent years, Banking-as-aService (BaaS) platforms have emerged as a cost-effective and efficient way to deliver financial services. Banks must adapt to a service-oriented and modular approach to the delivery of new and innovative digital services and BaaS is a critical component in expanding their digital offering. We will see more and more legacy financial institutions collaborating with fintechs to deliver BaaS, so they can enhance their existing offerings.
Banks are increasingly becoming service providers to non-banks and institutions – companies that want to offer financial services as part of a wider proposition. This kind of collaboration is exciting, as it allows fintechs (and additional industries) to provide a more holistic service in their niche.
Payroll is next for fintech innovation
In its short life, fintech has focused mainly on payments from consumer to merchant. But that’s all set to change. In the coming months, we will see companies taking payroll to another level. Look out for salary on demand, salary advances, and early direct deposits as they become mainstream.
The Future of Finance
An increase in embedded finance Embedded finance has been growing over the past year and will continue to do so as more and more organisations look to collaborate, not only to grow, but also to create increased stickiness for their customers. It’s about providing more of what your customers need, in one place.
Collaboration is the key to success in today’s financial industry. Established banks and other financial institutions have a lot to offer, but they are wise to look to the technological innovations being brought to the table by startups. In a time of accelerating change, new, innovative financial services are vital to stay competitive. All financial organisations, old and new, need to see opportunity - not competitionin collaboration. Working together, for mutual benefit, businesses can grow, whether it’s in terms of market penetration or the breadth of products and services on offer.
06 | Issue 41 FINANCE
Mobile payments ARE mainstream Customers have never had as many ways to pay for items as they do today, and most of these are digital and contactless. Hastened by the pandemic, virtual payment options are mainstream, and virtual currencies and blockchain payments will only further change how consumers view mobile banking and fund transfers.
The team were inspired to set up Rewire after one of them highlighted the financial struggles of a Filipino caregiver close to the family. By providing fair access to financial services Rewire is working to narrow global financial gaps, reduce inequality and promote financial inclusion for migrants.
Finance Issue 41 | 07 FINANCE
Banking with a conscious From consumers, there’s an ever-increasing demand for service providers to have a conscious, and this will only become more pronounced. Businesses increasingly need to demonstrate that they can have a positive impact both socially and environmentally, on top of heightened expectations for customer service and efficiency. Promoting financial inclusion or helping to reduce poverty are two real ways fintechs can make a difference both for their customers, and in the wider world. Of course, there are many other trends impacting today’s financial services and shaping the fintech ecosystem. Regtech improvements and innovation in cross-border services will be the main enablers for a new set of banking services in a world in which borders are becoming more fluid. Thanks to technology, modern banking is fast evolving. Those financial institutions that embrace and collaborate with fintechs will be the ones that maintain a competitive edge and flourish in a rapidly changing market.
Saar Yahalom Co-Founder and CTO Rewire About Author: Saar Yahalom is a co-founder and CTO of Rewire, a cross-border financial services platform designed to meet the unique needs of migrants. The fintech provides money transfer, debit cards, local payment accounts (IBANs), insurance products and the ability to make cross-border bill payments.
ESG Explained ESG is an investment approach that assesses investment outcomes based on social goals in three areas: (1) environmental, (2) social issues, and (3) corporate governance. Environmental Goals ESG environmental goals primarily address climate change concerns, greenhouse gas emission reduction, water management, and waste reduction. As a result, ESG-focused investments are screened for impacts on possible factors of climate change and other environmental issues. For example, investments in fossil-fuel-dependent businesses are considered less attractive when compared to sustainable or “green” sources of energy.
Social Issues
Why Investors Need to Focus on ESG in 2022 08 | Issue 41 INVESTMENT
ESG guidelines attempt to divert investment activity to improve social issues, including human rights, consumer protection, and animal welfare. Other considerations examined include employee work conditions, financial institution practices (such as predatory lending), and how business activity impacts local Anothercommunities.socialsubset of ESG policies addresses Diversity, Equity, and Inclusion (DEI). Policies and programs that promote DEI encourage the participation and representation of individuals categorized under various ethnic, gender, religious, and cultural groups, including sexual orientation. In addition, ESG guidelines assess a company’s activities
According to some governmental organizations and financial institutions, the answer lies in implementing Environmental, Social, and Governance (ESG) guidelines when choosing an investment portfolio.
ESG promises to positively influence investing and achieve positive goals that benefit humanity and the planet. Web scraping helps achieve these aims by collecting data and checking if company activities conform to ESG guidelines. While there are many challenges associated with ESG, recent data demonstrates that these investment trends have grown in previous years and are expected to increase in the future.
Can investment choices produce positive outcomes for the economy, environment, and global population?
Other
Issue 41 | 09 INVESTMENT
ESG Concerns and Challenges
ESG investing is growing worldwide, and the trend is expected to increase. According to the Sustainable Investments Institute, shareholder support for social and environmental proposals rose from 21% in 2017 to 32% in 2021. notable ESG investment trends include: $35.3 trillion in global assets under management across the United States, Canada, Japan, Australasia, and Europe in 2020 55% growth in professionally-managed assets labeled as ESG from 2016 to 2020 50% of investment assets labeled ESG in Europe following the EU’s 2016 ESG global mandate Professionally-managed ESG investments represent more than 60% of assets in Canada, 33% in the U.S., and 24% in Japan
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Lack of ESG Data Standards
ESG aims to grade companies by assigning a score based on their conformity to ESG guidelines. A predominant concern with these scores is that quantifying facts such as carbon footprint or investment in biodiversity and ecosystems is challenging. Lack of data, multiple sources, and inconsistent calculation formulas result in differing ESG scores and ratings depending on the methodology used. In addition, the time periods related to the data may not be consistent across all sets and typically require normalizing.
ESG Data Trends
Corporate Governance
Responses to ESG guidelines are mixed, spanning from hopeful optimism to severe criticism. The most common concerns and challenges include: Greenwashing Greenwashing (also known as "green sheen") is a deceptive marketing scheme that persuades investors to believe that an organization's goals, policies, and products are environmentally friendly. Non-Transparent ESG Score Methodologies
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Corporate governance is primarily concerned with a business's internal processes, financial transparency, board composition, and executive compensation. Other factors include the relationships of management with employees and stakeholders, and internal regulations designed to promote ethical behaviour and prevent conflicts of interest.
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While sustainable investment strategies have seen an increase in recent years, there has been a drop in ESG flows on some investment platforms. According to a recent report, year-over-year flows to ESG funds dropped 115% in January 2022. Despite the decline, some investors remain bullish, projecting that ESG assets may hit $53 trillion by 2025 - approximately one-third of all global assets under management.
Selecting ESG data can be a largely subjective process without consistent data standards. Rather than conform to a regulatory authority, firms typically use multiple data sources to make their own implementation decisions, resulting in differing outcomes based on varying ESG scores.
with other businesses and its relationship with local communities, charitable contributions, and health and safety policies.
VP of Global Partnerships Oxylabs
Other businesses opt for ready-touse tools that can be customized to extract public data from predefined target sources. Since the process of accessing websites can be complex, datacenter and residential proxies are used to provide anonymity, distribute requests, avoid geo-restrictions, and prevent server issues.
10 | Issue 41 INVESTMENT
Gediminas Rickevičius
How to Obtain ESG Data Public ESG information can be found in government publications, corporate reports, investment news, and social media. Other sources include: Third-party Data Sets ESG data can be purchased from third-party agencies. Most services cover multiple sectors and countryspecific data points. Some key areas of available data include: • Health and Safety • Water Management • Climate Change Energy Management • Materials & Waste Removal • Air Quality • Employee Compensation • Shareholders’ Rights • Diversity, Equity, and Inclusion • Audit Risk & Oversight • Board Independence, Structure & Tenure Considerations for Selecting ESG Data Sets When selecting data sets from thirdparty agencies, investment firms can refer to emerging regulations when creating frameworks, conducting analysis, and making portfolio decisions. Since data vendors have different ESG ratings, creating an evaluation framework enables investors to take critical differences into account when evaluating individual company scores.
Ethical Web Scraping Web scraping uses scripts or “bots” to extract data from public websites. These scripts crawl websites with a specific set of keywords and send requests for information that is collected and parsed into a format that analysts can read. Web scraping can be used to collect publicly available ESG data from multiple sources, including company websites, social media networks, online directories, and news websites. Companies opting to scrape their own data can do so via an in-house team of developers and analysts.
12 | Issue 41 FINANCE
Gen Z is demanding more from the industry, in terms of their financial investments and personalised banking which only FinTech’s industries can meet. Ultimately, younger generations demonstrate an interest in obtaining financial guidance from a variety of sources, so they can develop and modify the financial industry towards a technological focus which matches their values.
The financial world is undergoing a dramatic rejuvenation as we move into a technology-led era. We believe Generation Z, making up today's adolescents, teenagers, and young adults, born between the mid-to-late 1990s to the early 2010s, are leading the change in the FinTech industry.
There is no denying that Gen Z and Millennials operate in a different financial climate than older generations, and it is no surprise that many look for new ways to manage it.
To find out more, we recently conducted a study of 2,000 participants in the UK and Europe to discover how Gen Z and Millennials act within the financial market and how this may differ from their older counterparts.
Millennials & Gen Z Money Management
An individual’s ‘attitude towards money’ is an important factor in assessing their ability to recognise, analyse, handle and communicate their personal finances, in order to effectively manage their money. Money management is a vital skill as it offers a clearer perspective of where and how you want to spend your money. In turn, it can help you effectively budget and even increase savings. With good personal finance, you’ll learn to handle your money and reach your financial goal.
The study found that their financial practices were remarkably different from anyone else, as they have matured with access to new technologies, pressures, and financial responsibilities.
Unpacking the financial habits of andMillennialsGenZ
Recent financial research discovered that the younger generations are more financially educated than any previous generation. Many have invested their money into stock markets, cryptocurrencies and other assets. However, of the group who stated they invest in the stock market, only one in four think they could explain how it operates to a friend. The main conclusion is that while Gen Z is well-versed in finance, they lack educational depth. This becomes apparent when Gen Z tries to manage their credit and debt. Gen Z has less understanding in this area as there is a lack of educational forums on sites they regularly use, such as social media platforms. The lack of presence has caused major gaps in knowledge, meaning many do not understand terms such as a credit score – or its importance. By bridging educational gaps on platforms they are most likely to consume, Gen Z and others can improve their understanding of finance and continue to safeguard their path to financial independence.
Issue 41 | 13 FINANCE
As Covid-19 hit the world, new generations were forced to re-evaluate their approach to financial management. We found Covid-19 helped many of the younger generations achieve financial independence; however, it also irrevocably rocked the boat as it was the first significant financial challenge of their Therefore,lifetime.when banks or FinTechs reach out to Gen Z or Millennials, they should not assume their post-covid strategy would have a comparable impact. Our study found that 68% of Gen Z budget and save money more responsibly than their older counterparts. Furthermore, more than a third of them will have up to £1,000 in their savings, making them the generation who are the least likely to have any debt.
Cryptocurrency taking over?
Financial Anxiety Members of Gen Z have reported higher levels of stress and anxiety than their Millennial, Gen X, and Boomer predecessors did at their age, particularly when focusing on the future. This is heavily influenced by the increasing use of technology, economic instability, FOMO (fear of missing out) and the pressures of social comparisons. In fact, reports found that 51% of Gen Z fear money issues will prevent them from doing what they want.
14 | Issue 41 FINANCE
Cryptocurrencies continue to be a rising topic of intrigue for the younger generations, as many choose to invest their money into the digital currency rather than traditional savings. Our study found that Gen Z tend to be less trusting of traditional banks compared to older generations and they have demonstrated a desire to abandon the stock market in favour of financial prosperity through the cryptocurrency market. The study found that 51% of Gen Z would prefer to receive half of their pay check in digital assets rather than fiat currency. This is supported by the fact that less than half of Gen Z has an account with a traditional bank, credit union, neobank, or FinTech, and 62% do not have a bank account. This switch from traditional savings to cryptocurrencies is significant as it indicates that younger generations would rather invest time over money. Gen Z seems to be straying away from safer investing, which will almost ensure money back but only with a small reward. Rather, they are more inclined to invest big in unpredictable assets in the hope of a larger reward. This displays a shift in attitudes from the older to the younger generations as younger generations treat investing more brashly and emotionally, whilst older generations tend to prefer the more frugal and predictable Cryptocurrenciesoption.will play a part in influencing the direction of developing FinTech innovation in the coming decade. Early adopters of cryptocurrencies tend to be the most comfortable with the market, but it has not reached mainstream acceptance yet. FinTech’s should lead the charge in positively impacting the growth in cryptocurrencies availability and adoption so it can continue to grow as an alternative to more traditional financial methods.
To summarise, Gen Z and Millennials have dominated financial investing. We are already seeing the effects of their presence in the market, affecting how we all work. They have entered the market with their own set of values and objectives, acting as a catalyst in what is considered a desirable investment. However, where they source their information and expertise is not necessarily the most reliable, and there is frequently a knowledge gap and insecurities that prevents them from achieving financial independence.
Ammar Kutait CEO and Founder W1TTY
Investing in your future
Our research shows that only half of Gen Z investors watch financial education programs or seminars, which means the other half is missing out on important personal finance information sources.
It is critical that the younger generation's financial interests develop, yet they must seek different sources of knowledge to help build their confidence and inform them on where they should invest their money. If Gen Z and Millennials are shaping the future of finance, then FinTechs must provide the compass.
Issue 41 | 15 FINANCE
Seeing Gen Z struggling with financial investments and literacy was the motivation for W1TTY offering unique financial knowledge designed to deliver an informative and guided experience. Gen Z are tasked with decoding an abundance of information and continue to be bombarded daily through social media platforms, false professional advertisements and the many programs or seminars available. The research found over a third of Gen Z get their information on financial literacy from TikTok and YouTube. This has resulted in them focusing on diversifying their assets, often in unpredictable or nonprofitable funds.
Investment Planning Young people have changed the investing rules over the last few years. Millennials and Gen Z's have entered the stock market, many entering with an agenda and values of how they envision the market to be in the future. Their desire to reach financial independence and separate themselves from their predecessors has caused an unpredictability which has not been seen before. This has resulted in unforeseeable swings, such as Gamestop and Memecoins, which were mostly driven by Millennial interest.
The younger generations are straying away from more traditional long-term investments and instead interested in those deemed riskier and more shortterm. There seems to be less uptake in investing in fixed deposits and gold, but dramatic growth in NFTs and cryptocurrencies. As they have 20-30 years of earning potential, it is great they are showing a good risk appetite. However, there is not enough evidence to suggest they are doing thorough enough research. Research is essential to navigate the volatile waters of investing.
Due to a rise in social media pressures, 37% feel compelled to compete financially with their peers, causing poor spending and saving habits. Statistics show that 43% of the younger generation are concerned they will not earn enough money to be happy, and under a third believe the system is set up for them to fail financially. It will be challenging to break the pattern of poor spending habits, but we must help advise through customer-oriented services so they know how to operate within the increasingly over stimulating environment.
The main drivers for prioritising governance are concerns about minimising risk and ensuring compliance with new EU mandates around ESG. Having the right controls in place ultimately makes processes more robust and repeatable, ensuring that the resulting metrics stand up to scrutiny. For many businesses this means transposing the rigorous processes and checks used for financial reporting to how they measure and report on ESG metrics.
Industry leading businesses are now vying for the top ESG ratings from independent ratings agencies, to demonstrate their contribution from corporate responsibility to stakeholders and investors. As such, robust governance is crucial to providing fully representative and trustworthy insights into a business’s ESG performance - even though its impact is often underestimated. Governance needs to be a key part of the ESG conversation, particularly when looking at making changes to reporting processes to meet evolving expectations.
Fortunately, there are industry-level initiatives in progress. ESG reporting requirements from bodies such as the International Sustainability Standards Board (ISSB) and governments aim to provide consistent standards for businesses across the world, significantly reducing crossframework mapping, and simplifying some of the more complex elements of the reporting process. As a result, applying proper governance that aligns with the ISSB can play a pivotal
The role of governance in a holistic sustainability strategy Globally, conversations about governance and controls are moving up the business agenda. In fact, recent research from Workiva found that over the next 1218 months, ESG professionals will be allocating nearly a third (28%) of their internal ESG budget to governance.
The relationship between governance and trust Even when ESG metrics are available, there is the tricky issue around trust.
The role of governance and controls in meeting changing ESG expectations 16 | Issue 41 BUSINESS
Recent conversations around ESG often revolve around the ‘social’ and ‘environmental’ activities that companies are undertaking, but ‘governance’ tends to be lower on the agenda. Within the context of ESG, ‘governance’ refers to the rules and processes that decide how an organisation operates, compensates executives, ensures compliance and the like. It underpins the processes that make ESG activity and measurement possible and is essential for creating a complete, transparent picture for shareholders and stakeholders.
As ESG data is more complex and tends to live in different departments across the organisation, a collaborative effort between finance teams, sustainability teams, and ultimately the entire business is needed. This will create a single source of truth for all financial and non-financial information, enabling more trustworthy decision-making to be carried out.
As ESG reporting - and the associated processes - are comparatively new, many businesses are questioning whether their ESG data can be trusted. This wariness also extends to employees, customers, investors and other stakeholders, fuelled by a perception that companies are only reporting on positive progress or greenwashing. To address this, a clear and consistent demonstration of how businesses are delivering on meeting ESG goals is needed.
There is a growing demand from shareholders and stakeholders for clearly demonstrated ESG efforts, but businesses are finding this difficult to do. In fact, from a UK perspective Workiva’s research also found that communicating corporate value to address investor (or stakeholder) needs was one of the top three biggest challenges for decision makers. The best way to address this is through transparent and easily accessible ESG metrics, which in turn are only produced with clear governance and controls.
With ESG increasingly being front of mind, the ability to adapt processes alongside regulatory changes will determine a business’ success. Through management, understanding of regulations, clarity and implementing strong governance, business leaders can drive efforts to address ESG goals through achievable, sustainable action.
role in control over reports. In doing so, business leaders can ensure that they are meeting demands from investors for transparent, reliable and comparable reporting on sustainability-related matters. That being said, transparent, trustworthy reporting is not achieved overnight.
Navigating the evolving regulatory landscape of ESG Various mandates are already in place and more are planned which will further affect businesses in the UK and the EU. While common standards, regulation clarity and transparency Issue will help businesses achieve ESG compliance for existing mandates, business leaders can ensure that ESG standards can be continuously met through robust governance.
Hitting ESG targets is a long-term process, and although the introduction of various mandates present new challenges, business leaders are empowered to ensure they have the right policies and controls in place to keep up with changing regulatory needs and address pain points. Successful integration of teams is critical to achieving transparent and consistent reporting of both financial and non-financial data.
Existing efforts from ESG leaders include encouraging the implementation of technology that allows for seamless, automated data collection from different teams across the organization. With the long-awaited Corporate Sustainability Reporting Directive (CSRD) being pushed back a year, businesses can use the time extension to ensure they have assembled the right teams and implemented suitable technology to enable effective reporting.
41 | 17 BUSINESS
Erik Saito SVP, General Manager of EMEA & WorkivaAPAC
Since its enforcement in the UK in March, Strong Customer Authentication (SCA), designed to protect consumers and reduce the number of fraudulent orders for merchants, comes with added complications when determining the most efficient and cost-effective way for retailers to process online orders.
How has SCA changed online shopping?
Now merchants need to understand whether the banks and processors they depend on are fully SCA-prepared or not. And if they are not, merchants need to be able to request SCA exemptions by processing orders along the authorization path.
Making this decision means knowing whether the banks that support an online purchase for the merchant and the customer’s card issuer are fully prepared for frictionless SCA. It also requires an understanding of SCA’s exemptions and the requirements for requesting an exemption to SCA. And it requires those insights for every individual order.
First, SCA calls on consumers to demonstrate that they are who they say they are. They can confirm their identity in two of three ways:
• Both the merchant and its banks have kept fraud rates low and the transaction meets certain limits — order values below €100 or between €100 and €250 or €250 and €500 depending on how low the merchant and bank’s fraud rates are.
Trusted beneficiary — if a consumer’s bank agrees to allow it. The trusted beneficiary exemption can be applied when a consumer expressly tells the bank that issued their credit card that they don’t want extra scrutiny applied when they are buying from specific merchants. Again, the issuing bank can refuse to allow the exemption.
The regulation also comes with a batch of exemptions. These exemptions and related exceptions, called exclusions, are generally available when an order meets certain criteria:
• Something they know (such as a one-time passcode).
By understanding which payment flow — authentication or authorisation — best accommodates the transaction process for a given order, merchants can optimise the customer experience they provide, which increases conversions and the likelihood a consumer will return for a subsequent shopping trip. Again, the backbone of authentication is 3D Secure. But, all 3D Secure is not the same. Older versions that have been in the market for years don’t allow merchants or banks to request exemptions. They always require a step-up, often requiring a shopper to click away from a merchant’s site to satisfy the authentication requirement. A newer version allows merchants and card-issuing banks to request exemptions. The newest version allows merchants, the merchant’s bank and card-issuing banks to request exemptions.
Authentication vs. Authorisation in the SCA era
In short: Today merchants need to be in the business of payment optimisation or live with the damage friction and cart abandonment cause their business.
• Something they own (such as the device they used to buy).
• The order is low-risk and low value.
The SCA impact on merchants In the pre-SCA era, merchants didn’t worry about whether they should be seeking exemptions in the payment process and just how they’d best go about that. They were working in a world without exemptions. Optimisation was not a thing. With SCA in place, the world has changed. 3D Secure, a protocol that facilitates authentication, has become the critical path to a successful transaction. But in the early going, 3D Secure has proven unsteady. Not all merchants, banks and payment processors are prepared and using the newest version of 3DS, a version that accommodates the exemption requests that are vital to a successful SCA strategy.
• Something they are (via biometrics, such as a fingerprint or retina scan).
Authentication or Authorisation?
18 | Issue 41 TECHNOLOGY
Many of the questions and concerns surrounding the new SCA regulations have been about how the new consumer authentication regulation adds additional layers to transactions, causing friction and leading to lower conversions. That’s not a trivial concern, however the positive effects of SCA shouldn’t be minimized. Moreover, merchants have the opportunity to eliminate the friction that SCA brings, which is good news The not so good news is that making those choices is a complicated matter.
• The transaction is “out of scope.” These include phone or mail orders, prepaid card transactions and orders when the acquiring or issuing bank is outside of the European Economic Area.
All this means that merchants need to pay more attention to transaction data. They should get into the business of what is happening: Why was an order declined? What banks and payment processors were involved? They should be more demanding in asking for data from their banks and their payment service providers. They should ask for data and reports that show what orders are being declined and why. And they should consider working with partners who can readily marshal that kind of data and provide instant insights into the question: authentication or authorisation.
Unfortunately, a significant number of European banks have not yet upgraded to the newest form of 3D Secure, meaning consumers will face an authentication challenge when trying to buy, unless the merchant has requested an SCA exemption via the authorisation route.
Issue 41 | 19 TECHNOLOGY
The optimum strategy for merchants in the SCA era is to understand —through data — the history of transactions when it comes to individual banks and payment service providers. That way they know whether the authentication route will result in a friction-free approval — meaning 3D Secure along the payment processing path is fully optimised for requesting and accommodating exemptions. Or would the better route be to request exemptions through the authorization route?
Shagun Varshney Senior Product Manager Signifyd
After all, optimising transaction flow is more important than ever in the SCA era. And you can only make an intelligent choice if you have the proper data to guide you.
A Better Look: Family Offices,
• Therefore, Janie has a flow-through ownership share in Entity A’s managed account with a value of $4 million.
20 | Issue 41 BUSINESS
As you can see, in order for the office to report to Janie her net worth, beneficial ownership is vital. Having a system that can own it – automatically calculating the inflows/outflows by the family members – is a game changer. Technology and Beneficial Ownership
Owning It The 2020 Capgemini World Wealth Report noted the volume of HNWI had grown to more than 19.6 million. In its 2022 edition, North America, which has the highest HNWI levels, saw that population increase by 13.2% and wealth by 13.8%. One would think software providers would be lining up to service this market. However, compared to the overall investment community, and high level of complexity and automation required, the family office market is relatively small. And vendors find it easier to shoot for simpler sales to larger staffed institutions. Still, there is hope for family offices, whereas several vendors have recently started to pursue this overlooked opportunity. These latest offerings not only keep track of a family office’s multi-asset portfolio but also include beneficial ownership reporting capabilities. In a nutshell, beneficial ownership functionality allows the family office to maintain hierarchical percentages and can report the flowthrough ownership. This is crucial in the operations of the office and previously has been handled through spreadsheets alone.
Take the following example:
What type of firm routinely manages sophisticated centimillion dollar portfolios across multiple asset classes with only a skeleton staff? Family offices, of course, and when you layer on their multi-layered ownership structure, running one becomes particularly daunting. You’d think their complex holdings and low employee base would make them ideal for a software solution. Unfortunately, family offices have largely been overlooked when it comes to fintech innovation, as most vendors focus on the financial behemoths involved in more traditional investing.
• Entity A has a managed account worth $40 million
• Trust B owns 50% of entity A
Sure, there are many third-party portfolio software systems that could handle the diverse investments of family offices. There are also many general ledger packages that can report hierarchical ownership structures common to family offices. Lamentably, unified software solutions that can handle both crucial needs have been almost non-existent. Most offerings that support both are designed to be operated by large institutions with ample staff. As a result, most family offices create an infrastructure by stitching together multiple portfolio software and simplistic general systems (such as QuickBooks), backed up by adhoc, often siloed spreadsheets. Not an ideal answer for family offices. It’s also not a healthy approach for competing in a future where the volume of high-net-worth individuals (HNWI) could increase nearly 30% by 2025 and the ability to leverage data is table stakes.
• Janie is a 20% beneficiary of Trust B
Today, there are systems that can combine finalized valuations alongside indicative pricing. These software offerings solve the unreliability problem of estimates by including a measurement of dependability - also known as “confidence.” By including a confidence level, the user can be sure they’re using the timeliest data (mixture of indicative and final valuations) without concern of misrepresentation.
Reporting Time Another neglected demand of family offices has been the ability to generate timely ad-hoc reporting. For most financial institutions, operations work on a regular schedule. Trade activity is settled daily. Indicative valuations are done weekly and distributed internally. Reconciliations are done monthly with subsequent investor reporting also generated monthly. Family offices generally don’t have such a set routine. While activity is also settled daily, the similarities end there. Family members often request ad-hoc reporting to support their own activities (for example, requesting a statement of net worth for purchasing a condominium). Family offices can utilize software with ad-hoc reporting capabilities to serve the ultimate beneficiaries. Some packages do have the ability to generate reports by combining monthend finalized portfolio valuations with current ownership percentages. Further, advanced solutions offer the flexibility to report on indicative prices (aka: estimates). While on the face of it, such solutions appear to report more timely information, indicative prices from some sources can be notoriously unreliable and thus unusable for third-party reporting.
A Better Look Vendors that focus on family offices are sensitive to minimal staffing. To that end, some offerings are now hosted, avoiding the need to purchase additional computer servers, while freeing up IT resources. Hosted solutions also provide geographic flexibility in that individuals can access the information anywhere and anytime. Simple operation, ideally automation, should be a paramount concern when evaluating software solutions.
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Nicolefuture.Eberhardt is chief strategy officer for Ledgex. The company’s multi-asset class portfolio accounting solution enables alternative investment firms to confidently and successfully manage complex portfolios with game-changing data accuracy, transparency and timeliness.
That’s because it greatly reduces the error-prone, time-consuming practice of applying ad-hoc spreadsheet results to generated reports from stand-alone portfolio software.
Traditionally, software installed inhouse offered a more robust user interface with flexible importing/ exporting capabilities. However, with recent improvements to both browsers and software libraries (such as a JavaScript library, REACT), many hosted solutions have ease of use/ import/export functionality to match their in-house rivals. Meeting the IT needs of a family office isn’t easy. With all the investment complexity of large institutions and just a fraction of the staff to oversee Nicole Eberhardt Chief Strategy Officer Ledgex it, there are very few systems up to the task. For firms still hanging on to their Frankenstein mix of spreadsheets and QuickBooks, there are more attractive options available. And not only is it a better look now, you’ll gain greater insight into your data and the ability to take on more volume in
As the cost of living crisis continues, the headlines are rightly focusing on the people in society who are taking the hit most severely: the lower earners, the elderly and those already in debt.
Businessesplanning.areswitching up their marketing to attract shoppers with information on discounts and offers and, with one in six households now reportedly in ‘serious financial difficulties’, some banks are going the extra mile to help their customers. But one demographic that is being forgotten about is young people. They may not be the biggest breadwinners or bill payers today, but they are growing fast. We define young people as anyone under 24, with those aged 16 and above labelled Emerging Adults. These are not only the mass consumers of tomorrow but the next generation of employees; the people who will define the future success of every business in this country.
And they are listening, watching and noticing. They see which supermarkets are doing what they can to help their family by not putting up prices of basic provisions, and conversely those retailers who diligently mark-up everything to ensure their profit margin is not affected. And they see how their parents' bank is behaving in these difficult times - perhaps offering support when it comes to mortgage repayments and credit card debt, or ignoring pleas for help and only exacerbating the stress.
Banks must communicate with care For young people banking is a dry, complex subject that is not easy to understand at face value. It’s not taught as part of the curriculum, on the whole, and is not something with which school leavers have had much interaction. If banks can change that by defining how they speak to young people in their language, on topics that matter to them, and in a tone that they will respond positively to, they will see a powerful change in how they are perceived.
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But it is, bit by bit, affecting everyone. Even those who felt protected from it by a hefty salary and a healthy savings account will be starting to question unnecessary expenditure and extravagant financial forward
Banks must find their voice for young people amidst the current crisis
The experiences of today’s young people are defined by a unique set of circumstances, from global and domestic divisions and economic uncertainty, the social and political implications of Brexit and, of course, the pandemic which caused upheaval for so many young people. The cost of living crisis is now exacerbating all this negativity.
Finding an authentic voice is key Whatever help and advice they offer, however they tap into the issues that matter to young people, the most important thing to consider is authenticity. This means finding and adopting an authentic voice as well as ensuring the sentiment expressed in any external messaging flows through the business is paramount.
Young people can spot anything disingenuous a mile away and social media means they will shout about it, resulting in the opposite of the desired effect. A bank who shows they are on their side and fighting alongside them will earn their loyalty - possibly for a lifetime.
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First and foremost financial institutions need to establish how they can help during this time and what they can do that will have a real, tangible impact on people’s lives. They need to be clear they understand the unique experiences of this demographic, from their poor university or end-of-school experience, their concern about job prospects and the ongoing financial uncertainty. For example, educating young people around financial issues, helping them feel informed and equipped to deal with their financial future will create a connection. Young people have a natural optimism and banks must speak to that, emphasising a brilliant future of limitless possibilities that await them, taking them on a journey of shared values. Given the strength of their position as an essential service, and one that can hold the key to a certain amount of life’s experiences, they are well placed to do this with authority and credibility.
Finally, focus on face-to-face With so much of life now taking place online - particularly over the past couple of years - memorable real-life encounters deliver more value and impact than ever. A bank that gets out into the community, partnering with educational establishments and connecting with young people through programmes and learning-based projects will resonate far deeper with that audience. Alternatively, finding a couple of causes or issues to support as a business and then investing in taking those out to people in a more memorable way will make its mark and avoid the risk of blending into the background of British banking.
Our research shows Gen Z feel unfulfilled: they are too often unhappy, lonely, lack confidence and are unsatisfied with life. They are uncertain about their purpose and place in the world, have anxiety about the future and find life less rewarding. Young people are looking for a reassuring voice and a reliable steer. But they are also guided by their principles so relate to institutions and businesses who reflect their passions for fairness, equality and diversity, and respect their fluid approach to interests, views and identities.
Another way to indirectly tap into the natural optimism and positivity young people have is for banks to use their platform to celebrate life-affirming stories taking place in the world, while championing the causes young people believe in, promoting and encouraging positive change.
We should also not forget that as well as being the customers of tomorrow, they are also future employees. Perhaps as a result of their disillusionment of the past few years, Gen Z place great importance on finding happiness in their careers. Their recent experiences have been far from satisfying, so they see their career as a way to make positive change over which they have some control. Build a deeper connection with practical help and advice
In fact, the language banks use now could play a huge part in their future success. People are notoriously loyal to their bank - relative to other sectors - so those that strike the right note now could win over a huge number of young people very early in their banking journey, but they must engage them in an informed and considered manner.
Equality and fairness is something this generation feels passionately about but have lost faith in government and politicians to make a difference. As a result they are looking to businesses to fill that gap, using any power they Alex Young MD We Are Futures may have to effect change. Financial institutions have the power and influence to join important debates, but it is imperative they only do so if they are doing their bit to bring about the change for which they are calling.
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Banking and the Transformation of the Digital Space, With Absa Bank’s Award-Winning Head of Digital Banking digital transformation agenda,” he said. “It has also created an opportunity for the bank to respond better to our customers, and this fits into our overall strategy of feature functionality, customer centricity, quality and security.
In this vein, he revealed, the bank boasts some propositions that are uniquely Absa’s, such as identification and verification on the web. “Absa is the first bank to perform new account opening directly from our website.
He disclosed that the four major drivers of product development at Absa are feature functionality, customer centricity, quality and security. “Albeit critical, development is one of several variables driving product success. Our approach considers product ownership to be an essential component to developing successful products and ensuring these products continue to deliver value.”
When he spoke with Wanda Rich, editor of Global Banking & Finance Review, Subash offered his thanks for being awarded this accolade. His journey to becoming Head of Digital Banking of Absa Everyday Banking was, in his words, “a long and exciting road, filled with significant joys and challenges.” His background is in core engineering, where he developed a keen interest in the field of strategy and innovation. “Working for a major financial institution, I can express myself and implement ideas I have always dreamed about,” he said. “As the world continues to undergo rapid transformation in the digital space, pioneering digital innovation and customer satisfaction is what keeps me going every day. I have a great team that supports my vision. Working together, we make things happen.”
One product in particular, the awardwinning Absa Abby, is among the first-to-market in-app conversational AI virtual assistants, or chatbots, in the South African banking sector.
Regarding new products in the pipeline, Absa’s current focus is on end-to-end origination and sales enablement on its digital channels.
“Several personal loan journeys have been launched on our digital channels, and enhancements are being made to end-to-end mortgage journeys for the bank’s home loan customers. In line with market trends in driving customer engagement, we are also embarking on various gamification themes on our banking app.”
Finally, ChatBanking is a world first that allows our customers to use WhatsApp, Facebook and Twitter to bank securely.”
“Absa’s digital strategy is centred on driving digital adoption and making digital channels a significant contributor to product sales. The realisation of both ambitions is intrinsically linked to an improved customer experience, which remains at the forefront of the digital experience we want to offer our customers.”
When Wanda broached the subject of Absa’s digital strategy and unique value proposition, Subash explained how the effects of the current pandemic have included some positives for the bank and its customers. “It goes without saying that the COVID-19 pandemic has tested the limits of our digital capability and accelerated Absa’s
“Influenced by global trends, the introduction of Absa Abby was an important step in Absa’s journey to become a digitally-led business,” Subash said. “Absa recognises that conversational artificial intelligence is increasingly being used to drive greater customer experience and digital adoption, continuous innovation, and process optimisation. To this end, the bank invested in the technology to create a new omnichannel chatbot which seamlessly integrates banking into customers’ lives, making banking simpler and more convenient for them.”
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As technology continues to progress, Absa chooses to focus on improving the customer experience while employing a concerted effort not to overcomplicate solutions. “We have invested heavily in technology and solutions that have staying power,” Subash said. “Informed by a sound understanding of user experience and behavioural economics, our focus has been on developing a featurerich website and mobile technologies that deliver an intuitive, positive customer experience. Service and cost migration are core components of our digital strategy. By creating system efficiencies through quick wins and long-term efforts, manual hours can be migrated, improving our bottom line.”
Founded in 1991, the Absa Group is one of Africa’s largest financial services groups with a presence in 15 countries. It offers personal and business banking, credit cards, corporate and investment banking, wealth and investment management, and bank assurance. The bank’s capabilities and expertise have earned numerous awards, including the Global Banking & Finance Review 2022 awards for Best Digital Bank South Africa, Excellence in Innovation - Banking Product South Africa for its virtual assistant Absa Abby, and Head of Digital Banking of the Year South Africa for Subash Sharma.
Absa Biometric ID allows customers to transact securely with the highest level of biometric certification.
“Another achievement would be the repositioning of digital within the bank, effectively reengineering the way in which digital delivers value.
“Absa’s digital banking operations are anchored on an ecosystem that was strategically built on a ‘digital first’ premise,” he explained. “Therefore, we endeavour to continue offering our customers a seamless, customer-centric digital experience across all channels. We will continue to solve customer pain points through digital innovation and solutions, keeping the customer at the centre of everything we do. We are also continuously enhancing the ways in which we keep our frontline empowered to service and add value to our customers’ banking needs on our digital banking platforms through strategic partnerships.
“In just two months the team designed, developed and launched a completely new banking app. In two and a half years, Absa went from being the lowest to the highest rated mobile banking app in South Africa.
“Security remains a major focus for us, and we will continue our investment in market-leading security and fraud mitigation so that our customers can be assured that banking with Absa is secure,” he added. “Besides the various innovations that we have already launched, we have an exciting pipeline of digital innovations and enhancements underpinning our digital vision.”
Subash Sharma Head of Digital Banking Absa Everyday Banking
Strategy-wise, Absa remains centred on driving digital adoption through enhanced customer experiences on digital channels. Subash reports that the bank will continue to establish prioritisation mechanisms for customer journeys, which includes ensuring that they are digitally enabled where they cannot be completed digitally in full.
Looking further ahead, he believes that the increase in environmental awareness and demand for sustainability among the global population will impact the banking industry in the coming years.
Absa’s mobile app has undergone a complete overhaul in recent years as part of the broader Absa rebranding exercise. Subash regards leading this project to be among his most important personal achievements thus far.
Nonetheless, he recognises the value of having professionals on board who combine the conventional with the modern when building a team. “It is important to create a balance between radical-thinking innovators and more traditional banking colleagues. This combination promotes striving to reach the art of the possible within the confines of what’s permissible from a regulatory perspective. The recent reconfiguration of the digital space centred around strengthening our ability to innovate while solving important customer pain points simultaneously.”
“The 5th Industrial Revolution will fundamentally change the banking of today. Globally, people are beginning to recognise the impact of their actions, habits and consumption on the environment. In banking, our most pressing responsibility is to manage expectations around convenience, affordability and sustainability.
To realise the vision for digital at Absa, there was a need to change the mindset of many within the business to view digital as a product, not just a frontline channel. Although there is still a way to go to achieve this, significant progress has been made towards becoming a world-class digital bank.” In his role as Head of Digital Channels, Subash has found a key challenge to be shifting mindsets and progressing the general understanding of how digital delivers value for the business. “There was a time when digitisation and the use of data were perceived as back-office functions,” he recalled. “However, in the past few years, there is recognition that data has become one of the most important ingredients of any business strategy. Related to this is demonstrating the importance of both digitisationdigitising what is currently manual - and driving digital transformation, fundamentally changing how we do things through digital.”
“A second trend is the emergence of digital assets and related activities and technologies, and the impact of these on physical money and traditional banking. Also significant are trends in customer behaviour in the metaverse, and understanding the role that augmented and virtual reality will play in digital banking.”
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In this shift to a new digital landscape, some incumbents are still to adapt. While they might lack digital agility, they are until now considered more legitimate by many, something that the challenger banks are yet to achieve. Australian neobank Volt’s recent collapse shows that success in the sector requires more than just an easy-to-use app. That said, the tone has been set, and customers are increasingly expecting these hyper-personalized experiences from traditional banks as well. This is pushing the incumbents to create agile and tailored experiences to remain competitive.
What’s needed is a service that is customizable, omnichannel-based and tailored at its core. Consumer insights will be the key to unlock this level of adaptability and can be delivered through a cloud-and-platform-based contact center. Through these, banks can work to break down silos, remove legacy systems and become truly frictionless enterprises.
Switching on cloud-based solutions
The success that neobanks – banks that exist purely online – have achieved since their inception can be distilled down to one core principle: establishing an emotional connection with their customers. The competition for wallet share is getting tougher, and Chief Marketing Officers are playing a more integral role in the development of the bank’s consumer strategy.
In 2016, owing to the introduction of open banking initiatives like PSD2 , traditional incumbents were forced to stride further into the world of digitalized finances. The EU directive forced a shakeup in the industry, fostering collaborative partnerships and connecting banks to a wider base of Despitecustomers.thisinitiative, many banks find themselves hampered by legacy systems. An enormous 95% of banking executives have stated that legacy systems and outdated core modules are hindering efforts to optimize data and stunting personalization at scale.
The value of hyper-personalization in banking
The value of data, analytics, and AI To challenge FinTechs and bridge the customer experience gap, incumbents need to truly harness data. They will need to allocate resources effectively and leverage artificial intelligence (AI) and cloud elasticity as part of a wider data and analytics strategy. Fortunately, incumbents have all the necessary ingredients to implement this change. Owing to years of customer service, they possess swathes of consumer financial, social, media, lifestyle and behavioral data.
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Much like consumer brands, neobanks have placed significant emphasis on gamification of their customer service offerings. Through sociology, psychology and cognitive sciences, FinTechs are able to drive behavioral changes and can evoke feelings of accomplishment.
Deliver personalization at scale
So, how can traditional banks tailor their services to better match the needs of their customers? In fact, of those surveyed for the recent World Retail Banking report, 44% of customers stated that their banking experiences were not sufficiently personalized.
Today’s customers are seeking services that are always available and easy to navigate, and that is drawing them to the neobanks. Three in four customers have indicated that they are drawn to FinTech competitors that provide these services.
Banks, and the banking experience that they offer, are changing. The emergence of new challengers has ushered in a paradigm shift. While bricks-and-mortar branches once formed the foundation of all customer service offerings, a new digital frontier has begun to take shape, characterized by gamified, hyperpersonalized and readily available customer experiences.
However, having all the necessary components is only half of the battle. For many incumbents, there are institutional bottlenecks that stand in the way of their data informing a wider customer experience strategy.
We know that nearly three quarters of all executives stated that they struggle to turn their data into useful insights. Of those surveyed, 80% cited data reliability as a concern, with 70% stating that they lack the necessary resources to analyze the data. Recent partnerships in the industry have shown the value of a collaborative approach. By partnering strategically, incumbents can leverage crossindustry data ecosystems to produce the hyper-personalized experiences that customers have become familiar with through their FinTech interactions. Thankfully, regulatory requirements, and technologies such as the cloud, AI, as well as data and analytics are helping to foster increased crossindustry collaboration.
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Philip Bush Amazon Connect Lead, North Capgemini’sAmericaBusiness Services
CCaaS provides everything required to run a contact center in the cloud without requiring expensive IT and telephony infrastructure. It drives a “work from anywhere” approach for contact center agents, enabling the rapid delivery of omnichannel contact center solutions with minimum set up time, and a reduction in operational expenditure through only charging organizations for what they use. Take for example Amazon Connect. A solution that is on demand, serverless, open platform and can be scaled automatically, enabling benefits and collaboration across a large ecosystem of partner services.
Collaboration through Open Finance Open Finance, in essence, works as an enabler of collaboration, facilitating and supporting a network of third-party applications. Open platforms like Amazon Connect are crucial in facilitating integration with third party platforms, allowing for banks to share customer information. For example, NatWest has partnered with European open banking platform Tink, an open provider which synchronizes data to create actionable insights. Through this, NatWest was able to curate a newsfeed on its mobile banking app which generated 1.3 million responses in the first few months, enabling NatWest to know what their customers needed the most.
However, by implementing cloud-based data, analytics, and AI, banks can move past these historical barriers. The role of the customer service contact center is critical and innovation is already in progress within banking institutions. Various banks are placing increased emphasis on Contact Center-as-a-Service (CCaas) as a new model of operation. By leveraging Open Finance partnerships, they are transforming into experience hubs through which tech-enabled customer service agents work to produce personalized interactions, reducing the cost per call at scale.
Today's consumers expect their banking experiences to be hyper-personalized and available at the touch of a button, while constantly staying on top of trends and providing up to date information. In recent times, financial institutions have had their infrastructures stress tested. However, consumers still require stability. Banks need to leverage the cloud-enabled contact center, open finance and third-party strategic collaborations, making regulatory compliance a core operative pillar to achieve innovation at scale and retain the modern-day consumer.
The global pandemic has certainly had a negative impact on economies around the world, but it has also prompted the acceleration towards a cashless future. Joseph has witnessed a number of trends that support this. “At AsiaPay, we are seeing that the embedded payment experience is likely to become more popular, and even the norm,” he observed. “The utilization of tokenised payments and digital wallets are more encouraging than ever, while cash usage is declining rapidly, and there are continuously new use cases on blockchain and cryptocurrencies. Consumers and businesses are likely to be drawn to payment experiences that offer more control than friction; payment providers are launching initiatives to preserve economic liquidity.”
AsiaPay was founded in 2000 and is known as one of the leading digital payment processing service and solution houses in the Asia Pacific region. Their integrated payment services support the acceptance of credit and debit cards, netbanking, digital wallets, BNPL (buy-now-paylater), crypto payment and many other local payment methods in Asia Pacific.
Joseph emphasized the importance of offering different payment options for merchants “The advanced multichannel payment gateway system would be an important tool for merchants who expect to boost the chance of payment success from regional and global customers. Payment gateways empower merchants to offer customers with their desired payment options to ensure sales success.
“In the area of risk control and monitoring, we offer our advanced anti-fraud processing and reporting tools to merchants as part of our payment services at no extra cost. These services have been and are being used every day by thousands of all our MNCs, Corporate, SME and merchant clients from 11 countries in Asia Pacific since 2005.”
Choosing the right multi-channel payment platform that seamlessly manages payments under a single platform is an intelligent approach that focuses resources to remain where they can be most effective – on your core business.”
Alternate payments Joseph described the aggressive business competition in markets across the Asia Pacific region as “fierce.” In response, AsiaPay’s most powerful tool for helping businesses to remain competitive is innovation. “At AsiaPay, we continue to innovate by offering new payment solutions for business, while adopting industry-leading technologies in digital payment products and services for each local market to keep us stay ahead of our competitors. “We are also more advanced due to our feature expandability, with over 40 readily available plug-ins for integration with our eCommerce partners, over 30 value-added service features, and our easy one-stop digital integration makes us more comprehensive.”
AsiaPay: Adopting latest technologies in Market-Led Innovation to Become an Payment
Service Provider 30 | Issue 41 INTERVIEW
APAC's Leading digital
Wanda Rich, editor of Global Banking & Finance Review, interviewed Joseph Chan, CEO, to learn more about the company’s products and services and its approach to technology among other topics, starting with AsiaPay’s strategy and the achievements it has attained during its years of operation so far. “Our strategic vision is to be the leading digital payment service and technology player in Asia Pacific and beyond,” Joseph began. “Firstly, on the technical front, we have been PCI DSS Level 1 compliant since 2006, as one of the earliest PSPs in Asia Pacific to achieve such a high data security standard for payment processing over 16 years. Secondly, on payment authentication, we are one of the very few 3D Secure certified vendors in Asia Pacific that has been compliant with the security requirements of six card brandsVisa, MasterCard, Amex, Discover/ Diners, JCB, and CUP – for issuing and acquiring processing some dated back in 2003, not only the existing version 1.0 but also 2.0. We are also one of the very few certified vendors that support the latest card tokenization standards of Visa (VTS) and MasterCard (MDES, or Mastercard Digital Enablement Service).
“The white-labeled solution can be offered and deployed in various models for banks and merchants. The easy-to-deploy hosted solution service model can allow deployment in a short timeframe without any hardware or infrastructure setup, hassle-free. The licensed solution model can be easily customized and deployed to the issuer’s system environment.”
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Security and Authentication AsiaPay offers advanced Digital Payment Gateway and 3-D secure 2.0 to Banking industry. The solution includes the most advanced, certified, and proven digital payment system, supporting multi-channel, multicurrency, multiple payment methods, value-added services, embedded with the latest 3-D Secure 2.0 cardholder authentication technology. Besides we strive to offer better quality payment service by providing 24/7 local technical support.”
In March this year, AsiaPay Technology announced a whitelabeled 2.0 version of its 3D secure solution, Xecure3D. Wanda asked Joseph to provide more details.
“The Xecure3D solution, including 3DS SDK, 3DS Server (3DSS), Issue Access Control Server (ACS), and Cardholder Management System (CMS), is fully compliant with the standard requirements of EMVCo, the worldwide card network, and the Payment Card Industry (PCI) 3DS Core Security Standard,” he said. “ACS readily supports Visa, MasterCard, and UnionPay International, while 3DSS has already supported Visa, MasterCard, UnionPay International, and American Express, and will soon cover Discover and JCB. “Blended with the EMV 3D Secure 2.0 technology, the Xecure3D solution largely increases protection for cardholders on transacting credit card payments,” he continued. “The built-in frictionless flow with riskbased authentication - which uses different means including tokenJoseph Chan AsiaPayCEO based, OTP, and biometric - allows issuers to approve transactions with minimum interaction with cardholders in return for a smooth and effortless digital checkout journey. The 3DS SDK comes with both the Android and iPhone versions to seamlessly support the 3DS requestor feature on mobile payment applications.
The payments space was incredibly robust across the Asia Pacific region in the first half of 2021, and the BNPL space was found to be one of the fastest-growing subsectors. “The pandemic has not only adversely affected businesses but also consumers’ disposable income. As a result, with the rising demand for consumer financing and the growth in eCommerce sales, BNPL services have emerged as a major new payment method and short-term credit facility for consumers,” Joseph explained. “At AsiaPay, we are partnering with BNPL providers in Asia Pacific such as Atome, Zip, Pace, PayPal, Kredivo, Hoola, Indodana, and PayLater by Grab, to increase the potential of BNPL service adoption and gain access to a wide range of merchants currently using our digital payment solutions.”
Enhanced sales conversion with frictionless payment – with more data collected during payment process, it allows us to offer the latest 3D Secure 2.0 standard to help card issuers to authenticate the cardholders more effectively without the need to mandate OTP, hence shorten payment time and minimize payment dropout.
It is critically important that we understand the effects of our own impact, and where possible, influence positive environmental practices amongst our stakeholders and within our markets. AsiaPay focuses on responsibly managing and reducing its environmental impact.”
“We plan to expand and focus more on new payment use cases and distribution channels, including chatbot checkout, smart retail, web 3.0…etc,” Joseph said. “We will implement more sales and promotional activities on social media and webinars and launch the smart retail payment solution “PayDollar AppPay”. Alternate Payment Methods will be supported, such as buy-now-pay-later, and we will continue to expand the wallet acceptance like GrabPay, LinePay, ShopeePay, SamsungPay…etc in the region for digital purchases. Mobile payment will be accepted via in-app SDK and comprehensive data analytical tools will be available for digital merchants via the real-time payment dashboard.”
Joseph discussed how part of the organization’s vision involves providing entities with the latest digital payment values that readily maximize business efficiency, productivity, and global opportunities.
Corporate Social Responsibility Corporate social responsibility is treated as a priority at AsiaPay.
Another announcement from the AsiaPay camp earlier this year brought word of a new partnership in the field of token-based economics.
“Moonland Metaverse, a world for NFT collectors and meta businesses, enables merchants to enhance their user experience by plugging their business into the metaverse and tapping into digital-first users to increase their brand image and sales channels,” Joseph said. “AsiaPay is helping its various merchants to embrace the new experience of selling, socializing, and making money while playing in the post-Instagram era.”
Web 3.0 Strategy
“One of our focus is the green operations, as the environment has a direct impact on the health and well-being of our customers, our employees, and our communities.
Productivity savings – we can make available to banks and merchants of various real-time reporting and MIS tools in single platform across payments in 11 market to ease settlement reconciliation, refund handling, fraud monitoring especially payment management across countries, banks, payment methods, channels…etc.
Another priority is the social innovation, and Joseph highlighted some ways in which AsiaPay has been giving back to local communities.
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“We are committed to helping society in the conversion of the traditional payment to online, cashless, and paperless payment to reduce the carbon footprint,” he told Wanda. “Along with delivering services to our clients and shaping a sustainable future for the communities we serve; we also ensure that all our stakeholders are given the proper attention on the long-term value of the environmental matters.
Data analysis Data is a very important core part of our business and industry, especially in relation to: For part of business value, Sales and service enhancement - With more variety of payment data today, it allows us and our clients to gain far more business insights and better understand consumer behaviour and how to more effective reach and serve them, e.g., what the customer prefers to use to pay for, such as online/ mobile, browsers, languages, time, and optimize sales reach and sales conversion, and better implement their sales and marketing strategies.
Buy Now Pay Later
Omni-channel AsiaPay’s approach to staying competitive in a highly volatile and fastgrowing market is to constantly catch up with the market trends to develop, expand and improve its product offerings.
As a leading digital payment solution, and technology provider in the Asia Pacific, AsiaPay works closely with our partners in the metaverse, crypto and NFT related businesses. With capabilities of the web3 payment, we aim to strengthen the sales scene, use virtual social space as attraction, product display and sales as a reality, enhance the interest and purchase intention of potential buyers, coupled with cryptocurrency-led payment.
“Through the Library Project, we donate books and stationery to poor students and have been helping
“Furthermore, through our partnership with Youth of Differences (YoD), organized by Rotary District 3450, we have strengthened hope and created opportunities for people with developmental disabilities to engage with the fullness of community life, providing workplace experience aligning with the focus of WTIA (Wireless Technology Industry Association).”
Another key component of AsiaPay’s commitment to social responsibility is environmental sustainability, and Joseph shared how the organization focuses on responsibly managing and reducing its environmental impact. “We adopted the environmental ‘Green Office’ with the slogan ‘Go Green at Work: Reduce, Reuse, Replace and Recycle’ to generate less pollution and waste.”
A Glimpse of Future Looking to the near future, he predicted 2022 to continue to be an exciting year for AsiaPay, as new technology and competition from fintech have rapidly disrupted the financial services industry, particularly regarding cards and payments. “Payments are increasingly ubiquitous, embedded, standardized, and secure, reducing friction in processing and ultimately transforming the customer experience,” he reported. “Besides, the payment world is rapidly advancing technologically and globally, giving rise to many future payment possibilities for users and, similarly, allowing merchants to attract and connect with others around the world.
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“We will continue to expand our footprint in the market to develop our product’s new payment solution and service coverage. We look forward to adding value and empowering businesses and financial institutions to keep pace with the technology and market disruption by offering a comprehensive suite of payment solutions across channels, markets, devices, and technologies.
“Brigada Eskwela” (‘School Brigade’) is a project of the Philippine government’s Department of Education, in partnership with Vicente P. Villanueva Memorial School and Alumni Batch 1991 for the RepairPaint-Clean Programme. It was such an honor to help the next generation by improving the education and welfare of the youth.
to improve child literacy in rural areas of China since 2017. In addition, the AsiaPay team in Malaysia, the Philippines, and Indonesia continuously donate to elementary schools and nonprofits organisation from time to time.
He also praised AsiaPay’s strong employee-centric culture, which he described as being “reinforced by the core values of collaboration, inclusion, innovation, and wellness.”
“Currently, we’ve experienced good growth in markets like Hong Kong, the Philippines, Singapore, and Thailand. Among our new markets, Indonesia, Malaysia and Taiwan have been picking up fast in the past year. Beyond those, Australia, China, and India are just some of the countries where we are expecting to see continuous growth in the coming years.”
The trade finance sector knows it must play a major role in reducing the maritime industry’s almost three per cent annual contribution to global carbon emissions.
The solution lies in obtaining greater insight into each transaction and the vessel or vessels involved. This is the only way to ensure the banking industry is financing transactions that use compliant vessels and fuels and that all the parties involved are following best practice.
Targets imposed by the International Maritime Organisation and the 2021 COP26 climate change conference last October have increased the pressure for trade finance banks to incentivise reduced emissions through preferential terms. Regulation is looming and EU banks, for example, are to undergo climate stress tests this year, meaning they must show they are reducing their overall carbon risk. But assessing each trade transaction for its greenhouse emissions is complex, covering vessels, fuels, cargoes, routes and operational practices. Banks’ compliance departments are already burdened with anti-money laundering and sanctions requirements. And, with major companies engaged in trade having access to finance from dozens of banks, it could be difficult to stand out from the competition without risking compliance failures.
The new reality is that governments and regulators increasingly expect banks and lenders to incorporate ESG (environmental, social, and governance) standards into their operational and financial decision-making processes. The global drive for increased sustainability increases pressure for banks to offer preferential financing rates for transactions that demonstrate compliance with emissions reductions targets and are as environmentally-friendly as they can reasonably be. Banks cannot offer such green incentives, however, unless they can see what and who is involved in a trade transaction, including charterers and operators.
Although banks are advancing the green agenda in many new ways, such as sustainability-linked bond transactions and loans, when it comes to trade finance they need to adapt quickly.
Banks have to help drive down global trade’s carbon emissions
The push for maritime trade to reduce emissions constantly grows in intensity. The International Maritime Organization, which is part of the United Nations, is aiming for a 40 per cent reduction by 2030 against a 2008 benchmark, for instance.
Failure to act could see them lose out when new regulations come into force and newer, more agile financing platforms are quicker to adapt. As the sustainability debate focuses on all types of transport, the banking sector could be exposed as the funder of carbon-emitting vessels running on dirty fuel.
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End-to-end monitoring and due diligence
The challenge for banks’ and lenders’ risk, compliance, and legal departments is how to obtain accurate, real-time intelligence and information about the compliance and sustainability status of vessels in transactions and the routes they will follow. It is often even more complicated to quantify the environmental impact of the commodity that a vessel is transporting, but this should also be assessed.
Benchmarks and automation of ESG screening While the emissions targets and regulations often feel like yet another administrative burden, there is no escaping the demands of sustainability. Many vessels are now built to higher standards and banks need to identify those with superior environmental ratings in order to offer preferential financing terms to the charterers and owners.
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Simon Ring Global Head of Maritime Trade Technologies & ESG Pole Star
The Poseidon Principles, launched in June 2019, were an attempt to connect ship financing with environmentally-friendly behaviour and decarbonisation. Applicable to lenders, lessors, and financial guarantors including export credit agencies, they have established a global baseline in relation to climate Benchmarksgoals.of this type that use annual evaluations are fine, but in the era of 24/7 finance and blockchain platforms, the banking industry needs more up-to-date information. It should have access to real-time, detailed data about the current status of a vessel and full visibility of the proven and monitored ESG credentials of all the main organisations involved in a Achievingtransaction.this manually would never be cost-effective. What has changed is that banks can now use automated solutions that monitor emissions sustainability right along the supply chain. Automated solutions include the carbon emissions measurements conducted by expert companies using recognised techniques. In practical terms, it enables a compliance department to rate a vessel, its peer group, and its carbon tonne per mile within a matter of seconds, while also producing an essential audit trail. Banks can access and analyse this information on the same set of screens they use for sanctions and money laundering compliance checks. Such integration enables them to use the high quality data produced to demonstrate compliance and best practice to governments and regulators.
The only effective way of achieving this without a huge administrative burden is through automation and integration of ESG monitoring into systems and workflows. This is an integration that trade banks should embrace so they can demonstrate to the world they are doing all they can to promote sustainability.
The arrival of this technology means banks can screen the environmental impact of each commodity transaction they are considering, using a range of real-time indicators that includes climate effect, human exploitation, soil erosion, deforestation, and water productivity.
All trade finance institutions now need to screen vessels, carriers, and charterers for ESG compliance as a standard part of due diligence. As governments and regulators move to reduce emissions from global trade, banks, trade finance platforms and insurers will need more effective technology to promote the growth of green, sustainable trade finance.
IHT is on the rise - estate planning is more important than ever
With inheritance tax rising and house price rises refusing to slow, the need for effective estate planning solutions has never been more pressing. In fact, households are expected to pay £37 billion in inheritance tax over the next five years . As a result, more and more clients will be seeking IHT relief. Business relief (BR) can provide a solution, however, with the UK facing an economically turbulent and uncertain near-term future, diversification will be an especially important strategy to help protect the long-term health of clients’ financial assets. IHT is on the rise Inheritance tax receipts have been steadily growing, with HMRC’s latest data revealing a rise from £5.3 billion in 2020/21 to £6.1 billion in 2021/22. House prices are now rising at their fastest rate in 40 years and inflation hit an eye watering 9.1% this June, both of which are contributing to such a growth in IHT bills, with the nil-rate band set to remain frozen until 2026. In fact, recent research from PwC suggests that the £325,000 nil-rate band allowance should really have risen to £478,078 to match inflation. Equally, the Office for Budget Responsibility predicts that as much as £2.5 billion of inheritance tax receipts over the next five years will be solely due to inflation.
Seeking solutions Considering the rise in inheritance tax, it is more important than ever to adopt effective estate planning solutions. BR-qualifying investments can offer clients quick IHT relief but, crucially, without loss of control over their capital. Providing qualifying assets have been held for a minimum of two years at the time of passing, they can be passed on 100% free from inheritance tax.
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Diversification is key Households are facing growing economic challenges not seen in decades, with reports suggesting that savings accounts are lagging so far behind inflation that their value could halve in real terms over the next 14 years. As a result, more clients will be seeking to mitigate IHT with BRqualifying investments. Diversification can ensure the long-term health of client’s savings is protected as they develop a BR portfolio, an especially important strategy in light of current economic turbulence. Diversification is a well-established tool for building a balanced investment portfolio, with a range of investments spread across asset types and sectors which can reduce overall risk and limit exposure to any single asset.
As BR involves making an investment, clients also have the opportunity to target capital growth. BR is available through shares in an unquoted qualifying company; shares in a qualifying company listed on the Alternative Investment Market; and an unincorporated qualifying trading business, or an interest in one. However, as with all investments, there are risks and with households currently facing significant financial pressures, and so adopting a strategy to mitigate as risk as possible should be a priority.
As an increasing number of clients seek to mitigate rising IHT, this offers a key opportunity for advisers. With nearly half of advisers concerned about Baby Boomer wealth transfer damaging their businesses, it is vital advisers are engaging with the next generation of clients. Supporting clients with estate planning can offer advisers the chance to engage with clients’ beneficiaries. In this sense, rising IHT offers advisers the opportunity to begin engaging with the future generation of clients and ensure they are prepared for wealth transfer.
At the same time, as rising house prices have been adding to the growth of IHT receipts, with the residence nilrate band remaining fixed for another four years, June saw house prices rise for the fifth month in a row and some commentators are suggesting prices will be 8% higher than in 2021 by the end of the year. More and more households have now crossed the threshold for IHT.
Jack Rose
Issue 41 | 37 INVESTING
As inflation and price rises continue, households will increasingly be seeking inheritance tax relief. Equally, with house price growth refusing to slow, despite claims the market is cooling, and the residence nil-band rate remaining fixed, more clients will find themselves crossing the IHT threshold. As a result, estate planning solutions have never been more curial. However, with current economic instability seemingly set to continue, an estate planning solution which also prioritises the protection of clients’ savings is vital. A BR portfolio which utilises diversification can be a key tool in supporting clients through rising IHT bills.
Providers that offer BR through leasing and lending companies, are also able to provide investors with reliable returns which are uncorrelated to equity markets. Managing a diverse debt financing book with c£750 million of AUM, Triple Point targets predictable returns by investing in a portfolio of lease and loan contracts which support a diverse range of businesses. Providers offering BR through leasing and lending companies are also able to help address the increasing demands to support SMEs and the public sector.
For example, having provided £285 million of financing to UK-based businesses by March 2021, Triple Point has been able to support smaller businesses which were impacted by the pandemic.
For example, where BR unlisted providers have traditionally focused on the renewables and infrastructure sectors, Triple Point is the only provider to offer leasing as a BR qualifying investment. Selecting providers which focus on different sectors is essential to building a diverse portfolio.
Head of Retail Sales Triple Point
Approaching a BR portfolio as you would a traditional investment strategy, prioritising diversification, is essential. In light of this, Triple Point has developed a sector tool to enable investors and advisors to establish the levels of sector diversification offered by unlisted BR providers. This can be instrumental in helping clients build a BR portfolio which is spread across different sector and asset types.
INVITING C a l l F o r E n t r i e s Submit your nomination today to awards@gbafmag.com OR Submit Online at GlobalBankingAndFinance.com
40 | Issue 41 FINANCE
With globalisation increasing across all sectors, digital transformation has become a priority for many businesses.
While market participants are aware of and understand these costs, they are often regarded as tolerable when the system functions properly, so no one feels strongly enough to act to resolve them. With growing economic uncertainty, this is no longer feasible and financial institutions must offer solutions that are agile and meet the needs of banks and businesses today, tomorrow and in the future.
Although post-trade technologies and processes are critical components of the financial ecosystem, innovation in this area has generally lagged.
When we consider the types of innovation that the industry has seen since the initial systems were developed, there is now a wide range of opportunities provided by new technologies and functionality. In fact, if there continues to be a lack of innovation and collaboration, the cost of financial services will grow, creating more risk in operational resilience.
What are the issues currently at play?
Inefficiencies and a lack of automation in the use of Non-Economic Trade Data (NETD) also contributes to the overall fragility, risk, and lack of innovation in the financial market.
Recently, the Bank of England's Post-Trade Task Force advised that the financial services sector should look towards emerging technologies to strengthen the posttrade ecosystem, but stressed that technology alone is insufficient. To overcome these difficulties, the financial services sector as a whole will need to work cooperatively.
Eliminating settlement risk in financial markets
According to a recent Depository Trust & Clearing Corporation (DTCC) survey, it found that missing or incomplete SSIs are the primary cause of trade failures for 78% of respondents. The DTCC explained that if the global failure rate grows to 2%, industry losses and damages could total up to $3 billion per year.
When it comes to technology in Financial Services however, wholesale financial institutions have been slower to adapt than consumer-facing financial institutions. In the financial market, this is a cause for concern as macroeconomic events such as the pandemic, economic instability, and current geopolitical developments have exacerbated the impact of technology on continuity of operations.
Although wholesale financial markets are investing in innovation in the front-office, there is much to be done for post-trade processes, which are still manual, complex or duplicative.
The need to abandon legacy technology has been made even more pressing by regulatory pressures, which include the need to reduce settlement failures, expedite settlements, and prepare for the growing adoption of digital assets and changes to market structures.
In terms of innovation, post-trade and client onboarding are still behind in comparison to other financial industry segments. Because many procedures are still manual and duplicated, errors upstream can have a significant impact on processes downstream. As such, inadequate data and delays in onboarding new clients can be a significant burden to operational resilience. Overall, it raises market participants' expenses, driving up the cost of financial services.
It’s time for a change
We need a concerted effort from the industry to come together and focus on innovation in post-trade processes. Only then, with a single, consistent approach, can these processes be streamlined and improved.
Finding a solution
To have a payments system that is fit for today and the future, the market requires a highly secure cloud-based solution that is adaptable, has a standardised structure, and a network that can meet the needs of all market participants. Transactions should also be carried out in real-time to improve efficiency and accuracy, and ultimately reduce risk and error in post-trade procedures.
Post-trade challenges:
Financial institutions can also reduce duplication in situations where each asset class has its own siloed approach of engaging and communicating with counterparties. This can be done by digitising middle and back-office procedures, which can result in significant efficiency improvements. Additionally, posttrade digitisation can provide new insights by feeding back data gathered in back-office workflows to help front-office traders understand the capital and collateral implications of their positions, as well as the true cost of a Regulatorsdeal.and post-trade participants have recognised the potential of disruptive new technology. If market participants are willing to work together to find a solution, the future potential is limitless.
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Dave Sissens RTGS.globalCEO
Recent studies found around one in seven people, or more than 15% of the UK adult population, are neurodivergent, meaning that their brains operate, learn and process information differently from the socially accepted norm. This encompasses individuals who have one of a range of conditions such as autism, dyslexia, dyspraxia and ADHD (attention deficit disorder). One size does not fit all Some organisations are taking direct action to redress this diversity and embrace it. They are altering their workspaces to enable greater collaborative engagement, better suiting the needs of neurodivergent employees as they migrate from the pandemic's fully remote life to a new hybrid work
People do not have to change who they are to fit into a space thanks to more inclusive design. Instead, an environment can be tweaked to better serve everyone, neurotypical and neurodivergent equally.
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Why neurodiversity matters
Increasingly,schedule.employers are recognising that neurodivergentfriendly offices, which accommodate and embrace staff's diverse sensory responses to a shared environment, considerably boost the health and well-being of all.
Countless studies show that while neurodiverse employees can contribute unique skills such as creative storytelling, coding, and empathy to the workplace, they don't necessarily thrive within the norms and practices of the traditional workplace. Many people find working in the modern office difficult. For those who perform their best work in a calm environment, the hustle and bustle of an open-plan office might be distracting. However, this barrier can be significantly larger for those with neurodivergent conditions. the workplace with neurodiversity in mind
The importance of focusing on employees as individuals has been emphasised by the recent pandemic, however, a cultural change in workforce attitudes was already underway before we even heard about Coronavirus. However, the last 24 months have had a catalytic effect and, fortunately, businesses are starting to prioritise staff mental and physical health and wellbeing, as reflected by new, more flexible working policies. But inclusion means much more than that, so how are we including the neurodivergent workforce in the conversation about diversity and inclusivity?
Offices that aren't designed with neurodiversity in mind can be frustrating and, in the end, disabling. For someone with sensory sensitivity, a work setting without proper acoustic protection to buffer noise pollution can be debilitating, while intense overhead fluorescent lighting can be overwhelming for people with autism. Even certain details which are often overseen, such as texture, colour, sequencing, compartmentalisation, temperature and smells tend to over- or under-stimulate neurodiverse people.
Because everyone’s needs are different, it is paramount to offer a variety of settings so workers can choose the environment best suited for specific tasks or according to their mood. This means planning out shared open spaces for socializing and collaborating, enclosed quiet spaces for more high-focus work, dedicated phone and meeting zones, places to pause, and relaxing areas to unwind.
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In this regard, there are a few key design elements to consider when seeking to enhance office users’ sensory experiences and conditions, making the workplace more inclusive and welcoming for all.
Biological stress levels can build over time depending on how acute the sensitivities are, which can decrease productivity and lead to sick days. This has an impact on performance and confidence, which can result in voluntary or forced unemployment in extreme circumstances. For example, only 21% of people with autism and half those with a disability are in the workforce. I strongly believe that the way we design our workspaces is an obvious component of the Littleproblem.changes for a big impact When tackling neurodiversity, it’s fundamental to understand not everyone undertakes certain tasks in the same way. In fact, designing with neurodiversity in mind requires a much more nuanced approach.
As mentioned, neurodivergent employees may struggle in a traditional workplace, but with slight adjustments that benefit everyone in the office, you’ll manage to leverage their unique skillset and create a more inclusive and diverse environment.
For neurodiverse employees who are overstimulated, having access to sunshine and introducing natural features such as plants around a workplace may have a soothing effect and enhance air quality.
Gerard Milliken Divisional Director - Design Optima Products Biophilia benefits everyone, not just neurodiverse people. According to a recent survey, feeling linked to nature in the workplace has a major positive influence on all staff. Boredom and stress are decreased, and well-being can rise by up to 15%. Meanwhile, more interior green spaces, natural daylight, and even brighter colours enhance productivity and creativity, and employees report feeling more valued and supported by their company.
Of course, it’s not realistic to expect organisations to design for individual needs. However, by combining a spectrum of tastes with a variety of places, we may still achieve the intended result, a space fit for everyone to feel capable of working efficiently. Above all, this reduces the appearance of difference.
Even if divided by cubicles, a busy open-plan office with a loud, motionheavy atmosphere can lead to a lot of distractions among staff. Furthermore, it’s almost impossible to prevent a natural office culture from unfolding, which typically involves background conversations, sudden laughter and now more than ever, virtual calls. To combat noise, more and more designers are turning towards solutions that better control sound in the workplace. Certain materials can absorb sound effectively and walls and partition systems can be installed to provide acoustic baffling as well as create a private space to conduct work.
Managing sound and acoustics
One thing we need to realise is that while designing for neurodiversity, all five senses must be taken into account in order to create an immersive experience rather than just an office where people work. This motivates people to return to work in the office because they know there will be a sensory experience or a workplace that will suit their personality and work style, and accommodate anybody who is neurodivergent or has a disability.
Biophilic design Biophilia is a concept that suggests that humans possess an innate tendency to seek connections with nature and other forms of life. It is a cost-effective (and visually appealing) strategy to mitigate or eliminate some of the triggers and forms of distractions typically found in an office.
Glass walls and partitions are one of the most effective ways to allow natural light to flow into the space. This simple design decision will instantly make occupants feel more connected to the outdoor world while maintaining noise and privacy levels.
The lack of protocol and cyber security infrastructure is causing considerable anxiety among employees in the sector. Almost half of those surveyed (45%) state that working from home or remotely has caused them to worry more about how secure their devices really are. Even though many portions of the sector are starting to become office-based again, remote working culture has made a profound impact and is highly likely to stay. Consequently, and with the threat of cyber breaches only on the rise, 26% of financial services employees are concerned that they may be involved in a security breach in the near future.
The risk of cyber-attacks in the financial sector is currently extremely high. Impero’s recent device security survey of over 400 financial services firms reported that one in three financial sector employees have been involved in at least one cybersecurity incident. Threats of cyber-attacks are only set to rise. Therefore, firms must work with their employees to develop clear security protocol, as well as taking a proactive approach to adopting cyber safeguarding measures. The latter is especially important – firms cannot rely on technology alone and must also pay close attention to how employees access company systems and data.
Adequate training is a must in the age of remote work so that employees out of the office can run through a mental checklist of do’s and don’ts before they access any sensitive company systems and data. Our study found one in ten respondents lack confidence in identifying common cybersecurity threats. Although it may seem like a low figure, this is a concern given the significant risk involved when working in financial services. Just one mistake by one employee can lead to an incident with profound, far-reaching consequences.
Accessing sensitive systems and data
VPNs are a great example of an inexpensive safeguarding method that can boost online security companywide. While 80% of the
One of the largest risk factors over the last couple of years has been the rise in remote and hybrid working arrangements. Those employees less versed in cybersecurity may have assumed that the local coffee shop’s network was fine to use – but public Wi-Fi networks are often unsecured. Unfortunately, accessing company data over such networks has become common. The same is true for unsecured personal devices, with a quarter of those surveyed admitting to using them to access sensitive company data.
How the financial sector can remain ahead in the fight against cyber-attacks
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Although cyber threats are common across all sectors, one of the most lucrative targets for security breaches is finance. The financial sector is known for having a particularly rigorous security protocol, but inbound threats have responded by becoming ever more elaborate. Firms will need to remain vigilant to stay ahead of the curve, especially regarding the actions of employees and the security of their devices.
Improving the situation Financial services staff are on the front lines of the battle for cybersecurity. If their concerns are to be properly addressed, they need adequate training and resources.
The survey also revealed that over a quarter (26%) of employees believe their company’s training regime could be improved. This could take a variety of forms: in-person workshops, online sessions and asynchronous learning materials for example. The training would improve the remaining deficit on confidence among employees, enabling them to work anywhere safely and in the knowledge that they are not exposing the company to attacks. Additionally, companies must provide employees with the necessary tools and infrastructure to work securely.
The question of standardisation is very much relevant here. Firstly, there is not always a company policy around the use of personal devices for work. Secondly, and perhaps more pressing in the long term – is the lack of general “cyber security at work” protocols in many organisations. For example, the survey found that 36% of financial services employees have not been given any kind of password manager and a further 31% do not have access to a virtual private network (VPN), a commonly recommended measure for users of unsecured networks and especially for financial industries.
Companies should also consider that many employees will be using multiple devices to work. Over three in ten respondents claim to use between three and five devices at work, with some of these likely to be personal devices. Indeed, ‘Bring Your Own Device’ (BYOD) has grown popular amongst employees in recent years. It is not enough for a company to simply have a security protocol for using personal devices at work – it must be enforced. This means clear instruction on what is or is not allowed or, and if the company permits the use of personal devices, ensuring that all relevant security software is pre-installed.
financial sector has access to VPN software, that still leaves two in ten firms that could benefit from the greater security offered. Adopting the technology would leave decisionmakers with greater confidence in employees working remotely. But a VPN has little effect if few choose to use it. Therefore, decision makers must ensure that tools such as VPNs are not just available, but mandatory.
Managing personal devices
Regarding which devices are permissible and which are not, respondents were somewhat split. Just over of quarter (26%) stated that companies should not allow personal devices to be used for work-related activities. Companies must weigh up the potential security risks of a BYOD policy versus the benefits to employee experience it can bring. Greater security, better employee experience Given the anxieties surrounding cyber security threats, bolstering defences is not just about safeguarding systems and data, but also employees.
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Justin Reilly ImperoCEO Software
Providing a clear set of policies and improving awareness will go a long way towards improving employees’ confidence in recognising and reporting common cyberthreats. This is not a trivial matter as far as retention is concerned – nearly half (45%) of employees in the financial sector would consider leaving their position if they or their company had been involved in a serious security breach.
All these measures are important because, although the financial services sector is undoubtedly well guarded against attacks, 90% of respondents still believe more can be done. If companies develop the right mix of cybersecurity knowledge, processes and technology, it will inevitably lead to a safe and more prosperous industry.
Employees and consumer expectations Employees are consumers that today can instantly access almost anything through an app – from sorting lunch via Deliveroo and same day deliveries through Amazon, to instant money transfers via banking apps. In an era where this mindset of instantaneous results is the norm, individuals are asking why they should wait to access wages they’ve already earnt. Why should they wait for payday to get paid for the work they’ve done? We also have to consider how the world of work itself has changed. The pandemic has led to a general consensus that it’s ok to question norms in society, which includes how and where we work. Mass remote working wasn’t commonplace before the pandemic, but now the benefits that businesses and employees have experienced have resulted in new ways of working. The same can be said for how people get paid. The growth of pay on-demand So as employees begin to question how and when they get paid, and businesses seek to update legacy systems and processes, digital payment capabilities for employee pay are emerging. It’s now possible to allow employees to effectively choose their own payday (or paydays) with on-demand access to earned wages via a mobile app. Progressive employers are offering this pay ondemand facility as a low-cost, highvalue benefit to employees, giving them control and flexibility over how and when they receive their salary. Banking rails or card rails for paying salaries We’re also seeing an appetite for instant payment methods to avoid the typical three days allocated for payments via traditional banking rails such as SEPA, ACH, BACS, Swift, Wire. In fact, we’ve been working with Visa to develop and deliver fast digital pay options that are, quite simply, more efficient and more suitable for the modern world. The new digital payment method that has been developed makes possible salary payments direct to employees’ debit or credit cards using Visa Direct, Visa’s real-time push payment platform. Visa Direct leverages the payment provider's powerful, global network to facilitate fast digital payments worldwide, with stateof-the-art security and compliance Aftercontrols.completing a customer’s payroll calculations, CloudPay can now make salary payments in seconds rather than days. Pay-to-card transactions are made via Visa Direct to any supported 16-digit debit or credit card number (PAN). Employees can still receive salary payments as usual in their bank accounts, but payments can be made 24/7 (with no banking hours limitations) and arrive faster via Visa Direct’s single network rather than traversing multiple systems across the banking networks.
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The banking and financial services arenas have already faced a wealth of digitalisation. Online banking has drastically changed consumer habits, with the ability to quickly and easily make transactions through apps and online platforms changing how we all manage our finances and cash flow.
And of course, the pandemic only increased the use of digitally enabled financial processes as in-person exchanges became limited during Thelockdowns.ever-growing demand for new and improved financial technology is evidenced by the expansion of the fintech field. According to an analysis by global market research firm, Allied Market Research, the global financial technology market was valued at $110.57 billion in 2020, and is projected to reach $698.48 billion by 2030, growing at a CAGR of 20.3% from 2021 to 2030. Today’s lack of digitization in payroll and payments Technology in payroll processing has not kept pace with the digital transformation in other industry sectors. Migration to the cloud has been slow despite the revolution in software and tech capabilities. The same applies to how payroll payments are made. Treasury functions are still reliant on legacy infrastructure and the complex banking system, with very little digitization in the way transactions are made and employees receive their wages. On the other hand, the digitization of consumer financial services has advanced rapidly, with online electronic payments and mobile payment apps now common place as new and improved smart phones and online security software come to market. There has been a growing use of digital or mobile wallets where financial accounts and information are stored, accessed, or used via software rather than a physical wallet, which has altered payment processes and mindsets. But these innovations are few and far between in the payroll payments world.
Modernising payroll tech: why traditional technology is outdated
The likes of pay on-demand may appear on the surface to be complex to manage, but can in fact streamline processes. When we think back to when online payments were first introduced, there were understandable concerns around the change – but very few of us today could imagine life without mobile banking, and the ease and speed it brings to making and receiving payments. Why should how we manage payroll, and pay salaries be any different?
Paul Bartlett
How to modernise payroll processes
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CloudPayCEO
Sophisticated technology is playing a role in making tedious or labourintensive processes quicker and easier in our everyday lives, and it can have the same impact for payroll.
The challenge with the modernisation of payroll processes, though, is the need to stay ahead of the latest tech and software developments. For payroll teams, there is a common belief that new digital integrations will take time to manage and a change in processes will create more of an administrative burden or expose firms to new risks. But that’s not the case.
TECHNOLOGY
48 | Issue 41 BUSINESS
Research by Radiant Logic found that 44% of the companies that went through M&A took at least 7-12 months to synchronise application access across all involved entities, and 35% of the companies took even longer.
When multiple companies plan on coming together, they bring their own policies and infrastructure. It’s like having several different jigsaw puzzles and attempting to combine them into a single meaningful piece. From an IT perspective, it is an even more difficult task. Modern businesses are built around digital identities and interconnected networks. So, when it comes to merging departments or businesses, most of the responsibility gets dumped on IT and security leaders. Imagine you’re the CISO for a large enterprise that just acquired two other companies. Each company is in a different location, they have thousands of employees, and their own unique platforms for managing identity data and system access. So how do you manage this complexity? How do you ensure that all of these separate systems and platforms are constantly monitored and administered from a single hub? More importantly, how do you make sure that threat actors do not slip in through the haystack of access points?
Why identity data management is a critical challenge during M&As
Successful M&A is critical for businesses as it results in greater opportunities to enter new markets and access wider resources. However, effective M&A is hard to achieve, as it requires a complex integration of technical and network infrastructures between enterprises. For example, the failure rate of mergers and acquisitions is between 70% and 90%.
The complexity of managing identity data and privileged access during M&A
When it comes to fast business growth, few strategies are as critical as mergers and acquisitions (M&A). 2021 was a record-breaking year for M&A, with 62,000 deals announced globally - a 24% growth from 2020. In fact, the overall value of M&A reached $5.8 trillion last year, and it’s expected to remain robust in 2022.
One of the biggest aspects of M&A is syncing and collaboration, which needs to be actioned almost immediately after a deal goes through. Employees across both organisations and different departments need to be able to communicate and access resources efficiently without any disruption to the business. However, it can be a complex and painfully slow process, and the larger the M&A the bigger this problem becomes. CISOs often wonder where to start due to the large volume of data scattered across several applications that need to be synced.
There is also the fact that financial companies tend to have a bigger workforce compared to other industries. A bigger workforce means more digital identities and privileged access, leading to more management complexity during M&As.
Radiant Logic found that 67% of organisations have a modern access control and governance solution, but a lot of apps and users are left out. This is because the majority of the current IAM solutions work at the application layer – meaning they focus on unifying applications and systems instead of unifying identity data. This is a particularly negative approach for integrating cross-organisational systems, as most applications have very different protocols and are often tailored to the specific needs of a department. Thus, the most effective solution is to create an unified single source for all identities using an Identity Data Fabric.
Once all duplicate and stale accounts have been removed from the network, it’s time to implement an effective IAM framework. The current IAM solutions in the industry often fail to manage the sheer complexity and volume of M&As.
The lack of control over the provisioning and deprovisioning of user access also increases the potential risk of suffering a cyberattack. According to reports, 47% of ex-employees still have access to business data months after their exit. Threat actors can use these identity credentials to access restricted areas of the network and cause significant damage to an organisation. Disconnected systems help increase the attack surface and create gaps, allowing threat actors to move laterally across the network and remain virtually undetected.
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Unifying all sources of identity data with Identity Data Fabric The first step to achieving successful integration after a M&A is to clarify the identities across all the organisations involved. This means separating real accounts from ghosts or duplicates. There needs to be an accurate projection of identities, meaning that HR departments and managers need to come together to produce a correct headcount. Once this accurate projection has been achieved, automated tools can be used to detect and delete the duplicate accounts.
But where is this complexity coming from? Firstly, when two companies merge, similar departments also need to be merged. It means syncing two finance departments, two production departments, and so on. Then there is the challenge of managing duplicate roles and responsibilities. For instance, there will be two finance managers and multiple payroll officers, who have almost identical responsibilities. While dividing the workforce into regional teams might solve the problem of financial decision making and operations management, there’s still the massive issue of managing duplicate identities across different systems. For example, if an employee leaves the company or switches departments, their records and privileged access will be deleted from the central database, but it will still remain in their accessed systems and several different communication channels. In fact, our research found that 52% of all tech executives find the manual provisioning and deprovisioning of user access to be the most stressful challenge.
From an IT perspective, it becomes an excruciatingly painful process to find, modify or change this data, and change access privileges. To manage this complexity, CISO’s and security admins need to develop a clear understanding of which accounts belong to who, and which systems each account should have specific access to. Then again, it’s also not a fast and easy process. That’s why we see that big 7-12 month gap (or more!) in achieving synergies and integration between all systems after an M&A.
Financial companies face the biggest challenge The complexity of M&A is often greater for financial organisations and institutes such as banks. This is because financial companies are very distinct from each other, especially when they are operating in different regions. For example, a US Bank would have very different policies and a network infrastructure compared to a bank in Asia or Europe. When such organisations merge, it’s often difficult to find common digital resources. For instance, one company might be using Salesforce and another might be using Oracle solutions. The digital identities of these companies will be scattered across multiple different platforms that offer almost identical services.
Establishing a single source for all identity data can help IT and security teams to have a clear picture of access and administration privileges across thousands of employees, thus eliminating the stress of identity and access management (IAM). It allows security teams to easily monitor access points and address vulnerabilities quickly before cybercriminals can act.
Implementing this framework allows security teams to have complete visibility over the entire network. They can easily identify the true level of access associated with each unique user across multiple systems and applications, whether it is on the cloud or on-premise, leaving no gaps for cyberattacks to exploit.
For example, with an Identity Data Fabric, ‘John Doe’ from Active Directory can be linked to his various digital identities and access points. In one single view, admins can identify which systems and platforms John Doe has access to and which he doesn’t. Once the employee exits the company, only deleting his data from the Identity Data Fabric can remove all his digital identities and access privileges across the system.
Using anIdentity Data Fabric can radically simplify the complex process of identity management and governance, as well as boost the speed and agility of mergers and acquisitions. Logic
An Identity Data Fabric is an approach that unifies every identity data across the entire organisational network from all sources, regardless of where the data is stored, whether onpremise or in the cloud. It collects all identities scattered throughout the network, maps similar identities to an abstraction layer, and merges them into a single user profile. So, now all identities within the network are unique, and one profile links to multiple systems and applications. It also works at the data layer instead of the application layer, meaning that unifying allsource identity data will not impact how existing applications work, rather it will provide a better way to access, present, and manage identity data across all organisations.
50 | Issue 41 BUSINESS Chad McDonald RadiantCISO
Authorised Financial Services Provider Registered Credit Provider Reg No NCRCP7. When it comes to Digital Banking, we are the best in class. We won big at the Global Banking and Finance Awards 2022 • Best Digital Bank South Africa 2022 • Excellence in Innovation Banking Product 2022 • Banking Chief Digital Officer of the Year 2022 That’s Africanacity.
