How Supply Chain Disruption Affects the Financial World

A common concern of global insurance firms is, unsurprisingly, the financial impact of supply chain disruptions. An industry risk assessment published earlier this year stated that 43 percent of corporate insurance experts consider the business interruption of supply chain disruption to be their most significant concern.

Always a concern for supply chain participants themselves, supply chain disruption has downline impacts that have financial consequences on other business entities.

The financial losses that can result in a local economy due to supply chain disruption are so concerning to global insurance analysts that they actually top natural disasters and fires in importance. Business interruption, the report stated, accounts for 50-70 percent of insured property losses.

“As supply chains are becoming increasingly complex in a global sourcing world, any disruption – for example due to natural catastrophes, IT/telecom outages, transportation issues, a supplier’s bankruptcy or civil unrest – can lead to a snowball effect,” said Paul Carter, global head of risk consulting at Allianz Global Corporate & Specialty (AGCS), said recently.

“Business continuity planning is key and should be part of any company’s procurement and supplier selection process. Yet, to ensure appropriate mitigation measures can be implemented, it is no longer sufficient to know your ‘critical’ suppliers; you also need to have a grasp of how they manage their own supply chain exposures,” Carter concluded.

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The Most Concerning Security Threats to B2B Partners

What are the threats to B2B security that should concern integrated partners today? The B2B international consultancy conducted a global IT risks survey to determine the answers.

Security should always be on the B2B partnership radar, in this era of high-profile, Big Data breaches. Knowing where to concentrate attention and effort in shoring up security is a critical undertaking.

The IT risks survey, which incorporated almost 2,900 interviews of IT professionals in 24 countries, indicated that preventing breaches and protecting data are their top two concerns, and that both of these concerns have increased in importance since 2012.

One of the leading security challenges is the introduction of mobile, a business necessity for many supply chain participants, and BYOD in particular.

An alarming 35% of participants in the study indicated loss of business data as a result of external attack, and characterized the attacks overall as harder to detect. Another trend is threat to smaller businesses, which are less equipped to respond to security breaches in real time.

The study concluded that major issues have included underestimation of the increasing sophistication of malware, failure to implement adequate mobile device management, and management failure to properly assess the real risks and costs of breaches.

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B2B Integration is Still Proceeding Too Slowly

B2B integration is progressing all over the world and in many industries, and rapidly so. But as rapid as the adoption has been, it needs to be more rapid still, some studies indicate.

One area where this lag is most evident is e-commerce, where B2B barriers are hindering the entry of developing nations into the global marketplace, by slowing their preparedness to do business with more advanced partner companies. A study by the London School of Economics cites poor technological infrastructure, weak security standards and poor training among the reasons for the lag.

Slow B2B uptake in e-commerce isn’t restricted to developing nations, however. Industry pundit David Levy has cited incorrect predictions by both Goldman Sachs and the Gartner Group that e-commerce sales would be in the trillions by now, but Forrester reported that it is still under $600 billion as of last year.

Per Levy, the lag isn’t due to technology, but inconsistency in business rules. Pricing standards vary wildly in many industries, he pointed out, and shipping and logistics rules are difficult to accommodate, even when the technology is there.

And the slow uptake isn’t only evident in e-commerce. Supply chain partnerships in Latin America are also falling behind in B2B modernization, due to limited Internet availability in many companies, according to Business News Americas.

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Retail Data Breaches continue, Consumers remain Shellshocked

Data breaches have set a new record in 2014.  After the massive Target breach where 40 million records were compromised, the latest breach at Home Depot compromised 56 million records. As the consumers had barely recovered from this shock, the news of Shellshock vulnerability came out. This vulnerability potentially affects around half of all websites on the internet (around 500 million), and millions or billions more internet-connected devices such as routers, smartphones. can be easily exploited with 2 lines of code. Companies are still trying to figure out if they are vulnerable or not. It will take weeks or even months to

We all live busy lives, have somewhat of a short term memory and tend to forget about these data breaches. Check out this infographic which captures the data breaches in recent history and shows all the major and minor breaches that you may have forgotten.

There is not a single remedy which can keep hackers at bay. But a combination of security practices can help build a multi-layer protection around the consumer data.

Techniques like encryption using PGP provide s secure and relatively inexpensive mechanism to protect data at rest. That helps protect the data even when the servers and file folders are compromised. Multi-factor authentication, secure B2B transactions and encryption of data at rest can thwart the hackers and keep critical information secure.

Days of using plain old ftp for file transfers are gone. If you are a technology laggard and still use ftp, you should switch to more secure protocols such as SFTP and seriously consider adopting a Managed File Transfer (MFT) solution for securing your enterprise file transfers.

 

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