Business
The importance of improving data security in the modern landscape
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Dominik Samoicuk, Head of Security at Future Processing
In an increasingly digital world, business operations are sometimes exclusively online, therefore keeping data secure and reducing potential breaches are more important than ever. From making more informed decisions to finding new customers, organisations are using data to improve efficiency and output across every level of their business. However, with increased reliance, companies become more vulnerable to the threat of data breaches from malware, ransomware, information threats and phishing attacks.
Worldwide there is great variation in data privacy laws, with Iceland expected to have some of the strictest in the world, and the US having no single piece of legislation that covers all bases in data protection and security. When the EU introduced GDPR legislation in 2016, businesses across Europe had to adhere to stricter data protection laws and guidelines with real-world consequences when breaches and carelessness were taken within company databases. Sanctions many companies face include temporary or permanent bans on data processing and even erasure of said sensitive data.
The challenges businesses face in an evolving digital world
Over 41 million users were exposed worldwide to data breaches in 2023, resulting in substantial financial losses, and damaged brand perception. In response, organisations must implement security measures to protect information from malicious intent. This data governance protects information and business reputation, customer trust, ensures legal compliance and avoids financial losses.
In 2023, 82% of all data breaches involved the Cloud. Significantly, this impacts a wide variety of organisations. With few using a singular in-house data storage method, most companies rely on the Cloud to process and store data, whether that be through hybrid or full adoption. As this is of high vulnerability, it can impact a business’s decision making and as a result can leave thousands of users’ data vulnerable to attacks if not carefully monitored and regulated.
As most critical services have a strong online presence, extreme care must be taken when developing an online data storage architecture. As such, businesses should only move transition services online when they are sure that data can be migrated with no potential breaches or vulnerabilities which can prove a very costly process.
It is estimated that hackers attempt an attack every 39 seconds using a variety of methods ranging from malware to ransomware. Hackers and bad actors are often interested in taking or leaking data for any number of reasons, including politics, finance, or even under the guise of ethicality – their reasons may have no impact, but once an organisation’s data is breached, there is no going back.
Encryption and visibility
Implementing data security measures is perhaps one of the most important elements an organisation handling any form of data should consider. Data is most commonly breached through ransomware, phishing or malware attacks, introduced externally or internally.
An employer has a responsibility to ensure that employee accounts are secure. Rather than relying on the individual to increase security measures on their accounts, an employer should consider requiring specific levels of security. This can include multi-factor authentication methods, biometric authentication or through the use of passkeys. What must be key within all of these services is that employees need to have an adequate level of understanding of how they work, or would require basic cyber security training, given an estimated 95% of data breaches come from human error.
An organisation should also be aware of how important the backup and encryption processes are, especially when migrating to the Cloud. As best practice, an organisation should consider how the use of managed service providers can impact their data security. As a result, an organisation should provide extremely clear instructions on how and when they undertake data migration, encryption or duplication to lessen the chance of human error, and the IT team should always have visibility across all data stored, regardless of whether external parties are used.
Preventing insider threats
Fostering a positive working environment for employees can have hidden impacts on the attitude employees take toward data privacy. A positive culture can significantly reduce the occurrences where disgruntled employees leverage their, current or past, proximity to the organisation to create deliberate security vulnerabilities or provide access to unauthorised users. In fact, this issue is on the rise, with 67% of companies experiencing 21-40 insider incidents in 2022, up by 7% from 2020 – this number is expected to continue to rise in the future.
In addition to insider threats, human error is a major player in data loss and breaches. The lack of security requirements for employees’ passwords, while becoming less common, is still a raging issue. Multi-factor authentication, passkeys and biometric data are all used to develop stronger and less ‘hackable’ employee profiles – but these require further training and implementation – the responsibility is on the employer. In the legal sector alone, 60% of data breaches were caused by insiders, whether intentionally or unintentionally signalling a lack of training or lack of sensitivity toward employee impact.
Securing the future
While securing data is incredibly important, first understanding the data you are storing before you employ security measures is of critical importance. Data governance plays a fundamental role in managing consequential data and many Cloud users lack meaningful organisation and understanding of their data – hindering effective utilisation and security. By undertaking this an organisation’s SEO efforts can be boosted.
Securing data in the modern landscape is incredibly important for all users and employees, and for a company’s legality. As data regulations increase, legal responsibilities with the threat of fines and other legal consequences to keep data safe now lie on an organisation’s shoulders and this shouldn’t just fall onto one individual, rather a company that prioritises employee training across departments has the highest chance of success of staying compliant in the modern landscape.
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Business
Building Compliance into Business Culture is Essential in Fintech
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Source: Finance Derivative
Tetyana Golovata, Head of Regulatory Compliance at IFX Payments
Regulation plays a critical role in shaping the fintech landscape. From Consumer Duty and FCA annual risk reporting to APP fraud, the tectonic plates of the sector are shifting and whether you consider these regulations as benefiting or hindering the industry, businesses are struggling to keep up.
According to research by fraud prevention fintech Alloy, 93% of respondents said they found it challenging to meet compliance requirements, while in a new study by Davies a third of financial leaders (36%) said their firms had been penalised for compliance breaches in the year to June. With the FCA bringing in its operational resilience rules next March, it is more important than ever to ensure your company makes the grade on compliance.
Lessons from history
Traditionally, FX has struggled with the challenge of reporting in an ever-developing sector. As regulatory bodies catch up and raise the bar on compliance, responsible providers must help the industry navigate the changes and upcoming deadlines.
Fintechs and payments companies are entering uncharted waters – facing pressure to beat rivals by offering more innovative products. When regulators have struggled to keep up in the past, gaps in legislation haveallowed some opportunists to slip between the net, as seen in the collapse of FTX. Because of this, implementation and standardisation of the rules is necessary to ensure that innovation remains seen as a force for good, and to help identify and stamp out illegal activity.
Culture vs business
Culture has become a prominent factor in regulatory news, with cases of large fines and public censure relating to cultural issues. As the FCA’s COO Emily Shepperd, shrewdly observed in a speech to the finance industry, “Culture is what you do when no one is looking”.
Top-level commitment is crucial when it comes to organisational culture. Conduct and culture are closely intertwined, and culture is not merely a tick-box exercise. It is not defined by perks like snack bars or Friday pizzas; rather, it should be demonstrated in every aspect of the organisation, including processes, people, counterparties, and third parties.
In recent years, regulatory focus has shifted from ethics to culture, recognising its crucial role in building market reputation, ensuring compliance with rules and regulations, boosting client confidence, and retaining employees. The evolving regulatory landscape has significantly impacted e-money and payments firms, with regulations strengthening each year. Each regulation carries elements of culture, as seen in:
- Consumer duty: How do we treat our customers?
- Operational resilience: How can we recover and prevent disruptions to our customers?
- APP fraud: How do we protect our customers?
Key drivers of culture include implementing policies on remuneration, conflicts of interest, and whistleblowing, but for it to become embedded it must touch employees at every level.
This is showcased by senior stakeholders and heads of departments facilitating close relationships with colleagues across a company’s Sales, Operations, Tech and Product teams to build a collaborative environment.
Finance firms must recognise the trust bestowed on them by their customers and ensure the protection of their investments and data is paramount. Consumer Duty may have been a wake-up call for some companies, but progressive regulation must always be embraced and their requirements seen as a baseline rather than a hurdle.
Similarly, the strengthening of operational resilience rules and the upcoming APP fraud regulation in October are to be welcomed, increasing transparency for customers.
Compliance vs business
Following regulatory laws is often viewed as a financial and resource drain, but without proper compliance, companies are vulnerable to situations where vast amounts of money can be lost quickly.
A case in point is the proposed reimbursal requirement for APP fraud, which will mean payment firms could face having to pay compensation of up to £415,000 per case.
Complying not only safeguards the client and their money, but also the business itself. About nine in ten (88%) financial services firms have reported an increased compliance cost over the past five years, according to research from SteelEye. Embedding compliance earlier in business cultures can be beneficial in the long run, cutting the time and money needed to adapt to new regulations and preventing the stress of having to make wholesale changes rapidly.
Building a cross-business compliance culture
Compliance is a key principle at IFX, and we strive to be a champion in this area. In response to these challenges, the business restructured, establishing dedicated risk and regulatory departments, along with an internal audit function.
Regulatory compliance aims to support innovation by developing and using new tools, standards, and approaches to foster innovation and ensure product safety, efficacy, and quality. It has helped the firm to navigate the regulatory landscape while driving growth and maintaining high standards.
This organisational shift allowed each business line to own its own risk, with department partaking in tailored workshops designed to identify existing, new, and potential risk exposure. Shared responsibility for compliance is the only way to create a culture which values it. We see this as a great way for organisations to drive innovation while sticking to the rules.
Business
How AI virtual assistants are transforming education and training
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By Gregor Hofer, CEO and Co-founder at Rapport
What separates good doctors from excellent doctors, the type that might get five-star reviews if, like an Uber driver, their services were supported by a smartphone app?
Medical knowledge, expertise, and better outcomes are, of course, the most important factors. But – particularly when dealing with patients’ relatives, discussing risk assessment and imparting bad news – we shouldn’t underestimate the importance of bedside manner.
This might come naturally to some doctors but there are none for whom training isn’t useful, whether at medical school or on the job.
There will always be a place for real human interaction in this training, the type that involves role-play, with actors or colleagues playing out different scenarios that explore the most effective ways to handle difficult situations.
But what if this could be supplemented by more readily available and less resource-intensive experiences that simulate these training environments? And what if it could be applied across numerous sectors, industries and professions, of which there are a great many that could benefit from such an opportunity?
What might that mean for those instigating tricky conversations and, perhaps more importantly, those at the receiving end of them?
Advances in generative artificial intelligence – or GenAI – mean that these are no longer hypothetical questions.
There’s no limit to the type of person this technology could help, but we’ll review three – doctors, those working in corporate HR, and online students – to give a flavour of the benefits it brings.
Before we do, a quick word on how such applications work.
An overview of the technology
It all starts with data. With access to enough content, the type that you store and curate on your internal systems, large language models (LLMs) can be trained to find the most appropriate response to whatever user input they’re exposed to, whether in writing or spoken, and then you as a user can respond to that response, and so the cycle continues.
You’ll have experienced something similar using the likes of CharGPT, but because this is based on your own content, you’re more in control. (For simpler and more prescriptive scenarios, though, I’d add that with the best solutions, you can alternatively import predefined branching dialogue to keep your conversations on track.)
It doesn’t stop there, though; by tapping into a solution that’s supported by experts in linguistics and computer-aided animation, your colleagues can interact in real-time with avatars equipped with believable facial expressions, accurate lip-synching capabilities, natural gestures and the ability to detect emotions.
All of this adds to the user’s willing suspension of disbelief that they’re interacting with a real person, or AI avatar, thereby enhancing the effectiveness of their learning.
These innovations are reshaping how we approach learning and skill development in so many critical fields. We said we’d look at three. We’ll start by returning to medicine.
Medical training
AI assistants can supplement the way doctors are taught to break bad news to patients, one of the hardest things they’ll face in practice and, given its subjectivity, something that can’t easily be looked up in a textbook on anatomy or physiology.
As we said from the outset, this is easier for some doctors than others, but given the literal life-and-death nature of such conversations and the shattering impact that the death of a loved one can have on a relative, there’s always room to improve medics’ empathy and communication skills – which is exactly what this technology delivers.
By utilizing experiential AI tools, clinicians can better use their time, alleviate pressure, fatigue and burnout symptoms, and ultimately allow them to better serve their patients.
Corporate HR
In corporate HR, virtual assistants can significantly streamline and enhance the hiring and firing process, as well as any difficult conversation; whether it’s a tough review, a disciplinary hearing, letting down an employee about a promotion they’d applied for or any other scenario that might bring a bead of sweat to your forehead, it’s all about providing safe and cost-effective practice before doing it for real.
Tech research consulting firm Gartner recently found that more than three-quarters (76%) of HR leaders believe that if their organisation doesn’t adopt and implement AI solutions, such as generative AI, in the next 12 to 24 months, they’ll lag in organizational success compared to those that do, while 34% of HR leaders participating in their January benchmarking session said they were exploring potential use cases and opportunities when it came to generative AI.
If they do manage to adopt the right technology, the impact will be massive among those who deploy it wisely. After all, which company wouldn’t want to upskill its HR professionals in tangible soft skills such as empathy, communication, problem-solving, and conflict resolution in a controlled setting?
Online education
AI-powered tools can hugely boost student engagement in remote learning environments, and the research suggests that it comes close to rivalling in-person experiences. When you consider the staff-to-student ratios common in most educational settings, this should be no surprise – think how many students can fit into a lecture hall (even if they don’t always turn up!).
But we’re not necessarily talking about formal education; this applies equally to any informal setting in which someone needs to improve their education in some way.
With this technology, you can invent new ways to educate your students – or staff – by transforming lessons into experiences, using interactive characters reflective of the subject. This means you can increase user satisfaction and performance without compromising on content.
Whatever the scenario and whatever the use case, the chances are that if you have the right content in sufficient quantities, you can tap it for interactions that would otherwise be lacking in uniqueness or prohibitively expensive.
With AI virtual assistants, everyone’s a winner.
Business
How GenAI is Shaping the Future of Compliance
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Gabe Hopkins, Chief Product Officer, Ripjar
Generative AI or GenAI uses complex algorithms to create content, including imagery, music, text, and video with amazing results. Less well known are some of the ways in which it can transform data processing and task performance. This groundbreaking technology not only saves time, effort, and money, but has become a game-changer in enhancing operational efficiency and fostering innovation across various sectors.
However, some industries like anti-financial crime compliance – have been slow to adopt new innovations like GenAI, predominantly due to concerns over potential risks. In fact, they can even see it as a risk in itself. Legal, Compliance and Privacy leaders rank rapid GenAI adoption as their top issue in the next two years, all while other, less risk-averse organisations enjoy the upside of implementing GenAI in their systems.
This delay means many compliance teams are not taking advantage of AI tools that could revolutionise their processes and help them save up to 200 hours annually per user.
Entering the New Era of GenAI in Compliance
Teams in largely regulated sectors like banking and fintech face enormous pressures. Their responsibilities include identifying risks, such as sanctioned individuals and entities, updating policies to keep up with ever-evolving regulations, and handling expansive datasets. The high volume of this data makes manual reviews exhausting and susceptible to errors, which can lead to financial and reputational damage.
One way to overcome these challenges is by leveraging GenAI. For example, false positives – where a risk is raised incorrectly or false negatives, where a real risk is not flagged, are common issues caused by trying to deal with very high volumes of alerts and risk matches. Implementing GenAI can reduce these inaccuracies, significantly enhancing the efficiency and effectiveness of customer and counter-party screenings.
In practical terms, GenAI can reinvent how compliance tasks are performed. For instance, in drafting Suspicious Activity Report (SAR) narratives, where analysts need to justify suspicions in transactions, GenAI can help automate this writing process, combining human oversight with artificial efficiency. Platforms using GenAI excel in summarising vast amounts of data— crucial for tasks like screening adverse media, where they assist in identifying potential risks linked to negative information about clients.
Understanding the Opportunities of GenAI and Overcoming Fears
For the compliance sector, it’s a crucial time to explore how to incorporate GenAI effectively and securely without undue risks. Dispelling fears about data misuse, the high costs of initial model setups, and the ‘black box’ nature of AI models are central to this transition. Teams are particularly cautious about sharing sensitive data and the hidden biases that AI might carry.
Yet, some strategies can counter these challenges. By choosing suitable models that ensure robust security and privacy and adjusting these models within a solid statistical framework, biases can be mitigated. However, organisations will need to turn to external expertise – whether data scientists or qualified vendors – to support them in training and correctly deploying AI tools.
The latest advancements in GenAI suggest that virtual analysts powered by this technology are achieving, and sometimes surpassing, human-level accuracy. Despite ongoing concerns, which may slow adoption rates, the evident potential benefits suggest a bright future for compliance teams using GenAI. These technological innovations promise not only to improve speed and efficiency but also to enhance the capability of teams to respond and adapt swiftly.
Embracing GenAI will not only significantly elevate the effectiveness of compliance operations but also safeguard organisations against potential pitfalls while maintaining trust and integrity in their industry practices.
![](http://www.futuresparity.com/wp-content/uploads/2023/10/b-80x80.jpg)
Building Compliance into Business Culture is Essential in Fintech
![](http://www.futuresparity.com/wp-content/uploads/2023/03/b-5-80x80.jpg)
How AI virtual assistants are transforming education and training
![](http://www.futuresparity.com/wp-content/uploads/2023/04/b-5-80x80.jpg)
How GenAI is Shaping the Future of Compliance
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