B2B Payments

Weak Security, Facetiming With Banks And mPayments In Agriculture

In a recent interview with World Finance, treasury software firm BELLIN’s Martin Bellin said treasury managers spend too much time collecting data. But it’s not what you think — data, he said, is crucial to more adequate risk and money management. But, citing previous research from Gardner, treasurers spend up to 75 percent of their time aggregating that data. And with the technology and treasury management systems available on the market, there’s no reasons corporate treasurers should be spending their time collecting data instead of acting on it.

He has a point, and that’s why PYMNTS collects the data so you don’t have to. This week, we have the stats on the cost of a corporate security breach, the impact of a lack of face time between SMEs and banks and what mobile payments can do in the supply chain.

The Cost Of Weak Security

Kaspersky Lab turned its attention to the financial impact of enterprise security (or lack thereof) last week. Through global analysis and a survey of thousands of companies across the globe, researchers concluded that large businesses are spending about half a million dollars ($551,000) to recover from a security breach. Small and medium-sized enterprises suffer their own financial hits, too, requiring an average of $38,000 to recover.

The report broke down these losses further to highlight the vastness of the damage a security breach can cause a company: Lost business opportunities can cost a firm up to $203,000, while companies can also see more than $200,000 in additional financial damage when accounting for the damage to its reputation following a hack.

Ninety percent of companies surveyed reported at least one security incident to researchers (though Kaspersky noted that the majority of these breaches were not serious or did not lead to the loss of sensitive data). But professional services in the IT, risk management and legal sectors were found to be most susceptible to the highest financial losses.

Brian Burke, the head of Kaspersky Lab’s market intelligence team, said in a statement that the figures put the effects of security breaches into perspective for companies. “We have not seen too many reports on the consequences of IT security breaches, estimating a loss in real money,” he said.

Face-To-Face

Over in the U.K., as policymakers continue to introduce legislation and policies that aim to help small businesses find the working capital they need when their banks fall short, new statistics suggest the distance between SMEs and their banks is growing.

According to cloud services provider BCSG, nearly three-quarters (73 percent) of SMEs in the U.K. have no contact with their banks. The findings, BCSG said, suggest that the rise in banking technology makes it easier for businesses and banks to carry out their needs without engaging in dialogue — and that this trend increases the risk among banks that their corporate clients will switch financial service providers.

Researchers found that two-thirds (67 percent) of SMEs are willing to shop around when it comes to finding a new bank that fits their needs, while more than half said they are already tempted to switch banks. This is despite the findings that fewer than half (49 percent) of SMEs had been with their banks for more than five years.

Two-thirds reported that they would feel more engaged with their banks if they offered businesses day-to-day financial advice.

Mobile Tools

Banking technology may be making it easier for SMEs to go about their business without having to get face-to-face with their banks, but separate findings reveal how that can be a very good thing for some.

Hidden in the midst of a new report on the global agriculture market released last week, analysts from Research and Markets uncovered this tidbit about the potential for B2B mobile payments: Workers in the world’s agriculture industry would see an estimated 30–40 percent improvement in their income through the use of mobile payment services in the supply chain.

Mobile payments, the report concluded, is “strictly required to reduce the cost associated with supply chain management and provide hassle-free financial transactions in rural areas,” especially for workers with agriculture as their only source of income.

Analysts added that mobile payment technology enables real-time produce and products information updates, significantly improving visibility and communication between buyers and suppliers.

To recap: Security breaches are expensive, so it’s best to prevent them before it becomes a problem; banking technology means SMEs and their banks can carry on without any communication, and that’s not necessarily a good thing; but, on the other hand, banking technology can bring a new level of supply chain efficiency to workers in the agriculture industry and their corporate buyers.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the February 2019 PYMNTS Financial Invisibles Report

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