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FIREWALLS REQUIREMENTS DESCRIPTION

Source: Finance Derivative

Firewalls form an essential part of any organization’s data security program.  Even the PCI Council recognizes its significance and has made it a part of the PCI DSS Compliance standard.  So, firewall implementation is a mandate by the PCI Council to ensure strong network and data security for organizations dealing with cardholder data. The PCI DSS 12 requirements clearly outline the requirement of implementing firewalls to prevent any online or cyber threats. Explaining the firewall requirements of PCI DSS in detail, we have shared an interesting infographic blog that outlines the requirements that organizations must comply with for achieving PCI DSS Compliance.

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Business

The Role of Technology in Unifying Africa’s Capital Markets

Source: Finance Derivative

Author – Eugene Tawiah CEO and co-founder of SecondSTAX

  • Can you elaborate on the current state of African capital markets and the challenges they face in terms of fragmentation and accessibility for investors outside their respective jurisdictions?

Despite having some of the best-performing stocks and bonds globally, Africa’s exchanges are largely inaccessible to investors outside the jurisdictions where they are domiciled.

The siloed nature of these exchanges as well as insufficient data on the risk profiles of assets has led to limited access to capital for markets and limited access to high-growth assets for investors.

  • SecondSTAX aims to unify African capital markets through technology. Could you explain how your platform facilitates seamless investment and trading across borders, and what specific technological innovations enable this integration?

We facilitate seamless investment and trading across African borders by leveraging innovative technologies such as our cloud-based smart order management and execution routing system which allows investors to trade across multiple African exchanges with ease. 

Our integration of liquidity partners on our platform has mitigated the risks involved with currency disparities and exchange and has aided us in facilitating a seamless trade environment and also in reducing the impact of currency volatility on our users.

Lastly, our platform provides investors with access to real-time and the latest trading news, emerging research on trends and economic data from reliable local sources. This feature allows investors to make informed decisions by having necessary data accessible on a single platform.

  • Collaboration and integration within African capital markets are crucial for fostering economic growth and development. How does SecondSTAX work with exchanges like the Nigeria Exchange Group, Ghana Stock Exchange, and Nairobi Securities Exchange to promote this collaboration, and what benefits does it bring to investors and issuers? 

Through our collaboration with the Nigeria Exchange Group, Ghana Stock Exchange, and the Nairobi Securities Exchange and the utilization of our portal, we significantly expand our users’ access to high-growth assets, effectively opening up African capital markets to a broader audience of both local and international investors. 

These partnerships not only enhance market liquidity but also foster intra-region trading, ultimately integrating African capital markets. Furthermore, our alliances with the African Securities Exchanges Association and African Development Bank facilitate the seamless movement of investments between exchanges and licensed investment firms, empowering firms to engage in trades beyond their domicile jurisdictions within the African region. 

By offering a centralized database of information, we empower investors to make well-informed decisions about their assets, further strengthening the efficiency and transparency of African capital markets.

  • In what ways do you see SecondSTAX contributing to the promotion of innovative financial solutions for African businesses? Can you provide examples of how your platform supports businesses in accessing capital and expanding their operations?

Our intuitive, cutting-edge cloud-based platform facilitates seamless investment and allows investors to securely buy and sell stocks and bonds across multiple African exchanges with ease. 

We aim to streamline the investment process and enable investors to manage their investments from a single portal, providing functionality for every aspect of the investment lifecycle—from know-your-customer (KYC) verification to account onboarding through to trading and settlement in multiple local currencies.

Our partnerships with renowned brokerage firms such as Kestrel Capital (Kenya), Databank Group (Ghana), and Afrinvest (Nigeria) allow for investments to be made in native currencies thus allowing for an easier pathway to wealth accumulation in Africa. 

Also, our partnerships with multiple exchanges enhance economic growth and investment opportunities in those regions, allowing businesses greater access to more affordable long-term funding from capital markets supporting their growth and increasing market liquidity.

  • With the rapid advancement of technology, what opportunities do you foresee for further enhancing the efficiency and effectiveness of African capital markets? How do you envision SecondSTAX evolving to capitalize on these opportunities?

New technologies serve as an enabler and force multiplier to improve the lives of investors across the globe. This is true for developed countries and is certainly the case for the African continent as well. Artificial (General) Intelligence (AI/AGI) is very relevant to the evolution of the African capital markets, and we are already incorporating it into our platform as a way to synthesize timely trade ideas from the rapidly changing news, detailed research and market trading data available across the various stock and bond exchanges in Africa. 

This will democratize investing, making the African capital markets dramatically more accessible to everyone, from the savvy professional trader through to the novice investor, looking for the opportunity to grow their wealth. 

With 100+ years of combined technology and finance experience deploying complex large-scale systems and having built similar products and services at globally renowned firms, our team of experts at SecondSTAX believes we can create the frameworks that shall be used to turn these unique insights into opportunities for investors to trade more effectively and generate improved investment returns across Africa.

  • One of the goals of SecondSTAX is to attract investments from both African and international investors. How does your platform address concerns about regulatory compliance and investor protection in cross-border transactions?

We partner with well-established licensed brokerage firms with a multi-decade track record of trading and execution excellence within their local capital market jurisdiction, ensuring we efficiently operate and mitigate emerging risks within the regulatory frameworks of the markets we operate in. This also helps us to securely leverage the robust existing market infrastructure for trade facilitation and settlement thereby encouraging trust and credibility with both the regulatory bodies and investors.

  • Looking ahead, what is your vision for the future of African capital markets, and how do you believe SecondSTAX will contribute to realizing this vision? Additionally, what role do you think technology will play in shaping the future landscape of capital markets in Africa?

We hope for a unified African capital market, and in five years, we will be successfully integrated into major African capital markets, and be a trading and execution vendor partner commanding at least 25% of all African capital market transactions into and between these markets. We would also have launched services to support the investment goals of retail investors, facilitating simple transactions for them. We expect that by enabling the shift to a more efficient capital markets ecosystem in Africa, we will reduce the overall cost of funding for projects in both the private sector and the public sector.

The use of technological inputs on our platform will result in a vibrant capital markets ecosystem which should drive growth for all African emerging economies.

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Business

AI in Investment: A Guide for Asset Managers

Source: Finance derivative

Giacomo Barigazzi ,Co-founder, Axyon AI

In today’s dynamic investment landscape, the race to harness new technologies for a competitive advantage is more fierce than ever. For those in the asset management sector, embracing innovation isn’t just a choice—it’s a necessity to stay ahead in the relentless pursuit of investment opportunities.

The bedrock of investment management has always been grounded in exhaustive research and due diligence. However, the rapid evolution of technology mandates a shift in strategy. Now, it’s critical for leaders in this space to not just familiarise themselves with, but to fully integrate advanced technologies such as artificial intelligence (AI) and machine learning (ML) into their processes.

Exploring the Varieties of AI in Asset Management

It’s essential for asset managers to recognise the specific AI technologies available to them, as this understanding can greatly influence their approach to investment strategy. Broadly speaking, AI in asset management can be categorised into generative and predictive models, each with distinct capabilities and applications.

Generative AI, powered by advanced machine learning techniques, is designed to produce new data that mimic real-world information, such as text, images, and more. This technology is especially useful for creating realistic and diverse datasets, enhancing personalisation, and improving the accessibility of financial services. For asset managers, generative AI can play a crucial role in developing innovative solutions and strategies by generating novel insights and scenarios.

On the other hand, Predictive AI focuses on analysing historical data to forecast future trends and patterns. This aspect of AI is invaluable for asset managers aiming to anticipate market movements and adjust their strategies accordingly. The predictive capabilities of AI provide a strategic edge by enabling more informed decision-making and risk assessment.

For asset managers intent on leveraging AI to enhance their operations, distinguishing between these AI types is a fundamental step. By adopting the appropriate AI technologies, they can significantly improve client outcomes, operational efficiencies, and, ultimately, investment performance.

Creating a personalised client experience

Improved performance is not the only advantage AI brings to asset management; it significantly enhances the client experience by enabling the development of personalised services. For clients, generative AI tools like chatbots and virtual assistants establish a continuous support system that provides instant responses to queries, as well as up-to-date insights on market developments and portfolio adjustments.

A heightened level of personalisation throughout the investment journey ensures clients are not just satisfied but also better informed – a dynamic which undoubtedly fosters greater human relationships in the industry.

Strategic considerations for asset managers

As the widespread adoption of AI in the financial services sector continues to materialise, asset managers face a crucial task in nailing down the right WealthTech solution. It’s not just about adoption; it’s about making strategic choices.

Ultimately, companies expect to see a strong ROI after adopting an AI solution. Only by making a well-informed choice will they see the expected tangible impact of AI in asset management. A lack of due diligence in the procurement process risks introducing a solution that is both ineffective and disruptive.

Integration is key. AI solutions should align seamlessly with existing systems to avoid unwanted disruption to day-to-day operations. Therefore, choosing a provider that is ready to provide extensive training to support a smooth assimilation into operations should also be a priority for management.

There is an element of self-assessment required in the decision-making process. By recognising areas in a firm that require enhancement and understanding the specific value offered by each AI solution, leaders will be best positioned to identify a product that will bring significant improvements in targeted areas.

With a sea of options available in 2024, selecting an AI solution demands thoughtful consideration. Managers need to assess how each aligns with their investment strategy and delivers results. Consulting with experts and analysing case studies from similar businesses equips managers with valuable insights for informed decision-making.

AI as an empowerment tool

While AI will be a revolutionary tool in the asset management industry that will drive efficiency and innovation, it is not intended to replace the human touch. The technology should be viewed as a tool that empowers asset managers to focus on high-value work of greater importance to clients.

AI’s transition from a nascent curiosity to an integral business tool underscores a pivotal shift in industry dynamics. Asset managers who are slow to adopt these technologies risk falling behind in a market that’s increasingly influenced by AI’s capabilities. By contrast, those dedicated to swiftly and responsibly adopting this technology will likely be rewarded with an extra edge in performance.

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Business

BALANCING ACT: HOW A MULTICHANNEL APPROACH TO COMMUNICATIONS CAN DRIVE ENGAGEMENT 

Source: Finance Derivative

Tom Rahder, from Esendex, discusses how digitisation, and use of mobile messaging has transformed the banking industry, and where it can go from here. 

Barely a week goes by that we don’t see reports of banks closing more of their branches. 

And while they might come under fire for it at times, these closures reflect the fundamental shift in how we do banking today. 

Covid accelerated the change, of course – but digitisation of financial services had been happening for a long time. The rise of online-only challenger banks, and a growing number of ways to manage our finances online, has meant that the local high street branch has become redundant for many people. Young people in particular may never step foot in one because they have no need to: they can do everything from an app on their phone instead.

Most of us don’t think twice about using self-serve and/or automated digital tools for straightforward transactions, like transferring money between accounts. 

But our research also suggests that nearly 70% of those experiencing financial difficulties would rather manage their own repayment plan rather than have an ‘unpleasant’ conversation, and almost two-fifths would opt for an automated service over speaking to a human. So, far from being ‘second best’, an automated environment can provide the privacy people need to address complex challenges they’d once shied away from.

It goes without saying that any branch closures must be sensitively handled and communicated to ensure that the customers who still rely on them, many of whom may be elderly, disabled or vulnerable, aren’t left behind. 

To their credit, most banks recognise this, and will point people to nearby branches, set up pop-up counters in public places, and remind them that the Post Office is available for everyday banking. They also offer free digital skills training courses to empower customers to manage their finances in a fast, secure and convenient way. 

Unlocking the value of multichannel communications 

The reason why so many customers prefer to self-serve is largely down to the range and quality of communications available today. 

Forward-thinking firms recognise that choosing the right channels is critical if they want to deliver outstanding experiences in a competitive sector. 

A multichannel strategy doesn’t mean introducing as many channels as possible but meeting customers where they are, and continually monitoring the effectiveness of all your communications. It means balancing ease and convenience with security, and understanding how different channels drive actions – whether it be a clear and direct SMS for two-factor authentication, or WhatsApp messaging for dialogue.

The financial services sector, like any other, is impacted by wider consumer trends, so we’ve seen a big uptake of WhatsApp for Business messaging recently. It’s a channel that most people are already active on and feel comfortable with – so they are usually more likely to engage with banks, building societies and other lenders that offer it.

The good thing about WhatsApp is that it allows contact centre teams to manage multiple conversations at once, so people don’t have to endure long waiting times to speak to someone on the phone. It can also bring down the cost-to-serve, and free up staff to support customers who need it, including those who can’t easily access a branch. 

Two-way messaging, available via SMS and chat too, helps customers to feel listened to and deepens their connection with a business. They can discuss their issue and come to a resolution in a way that is most convenient for them, and have a written record for reference.

Looking ahead

As mentioned before, consumer demands are changing all the time – the challenge is keeping up. Fortunately, there is a growing number of APIs that plug your business messaging platform, allowing you to build on your capabilities with services such as RCS Messaging (Rich Communication Services Messaging). This interactive content, which can include videos and audio, is a powerful way to reach people via their SMS inbox.

Sometimes, we’re thrown a curveball – for example, reports that Gen-Z is shunning smartphones in favour of ‘dumbphones’. 

Whether this trend takes off remains to be seen; what’s important is that organisations in all sectors are able to accurately track metrics like open rates and ROI. It also reminds us that the ubiquitous SMS, with its open rate of 98%, remains as relevant today as ever. 

Last but not least, don’t be afraid to ask them exactly what they want too, rather than waiting for them to switch off and go elsewhere. A quick-fire SMS survey is a good way to gauge opinion and track trends over time, so you can invest in the channels that will deliver the most value to both your customers and the business. 

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