EQ Magazine winter 2015

MAKING THE FUTURE TODAY

FORMIDABLE FINTECH P4

EQUINITI ON THE RADAR P20

CEO Guy Wakeley puts technology first

DODGING THE CYBER CYCLONE P30 Data security in a digitally dependent world

How Britain can become the Fintech capital of the world

CHANGING FORTUNES P32

Capitalising on a rejuvenated IPO market

Straight tech talking

Britain’s top technology journalist, Rory CellanJones, eyes the next digital revolutions

ALSO INSIDE Member engagement // Employee portals // Wealth management

FOREWORD

WORDS FROM THE FRONT

6

of the best

GAME-CHANGING TECHNOLOGIES

A time for change Lisa Labarte, Editor

Technology is transforming the way we all work, nowhere more than here at Equiniti.

Under the leadership of our CEO, Guy Wakeley, we’re shifting the focus to put technology right at the core of our offering.

You can read more about Guy and his vision for Equiniti’s future on page 20.

Technological innovations typically make what we already do easier or better.

Occasionally, though, they transform what we do, rather than how we do it.

The UK and Ireland is the fastest-growing region in the world for Fintech investment and Equiniti is at the forefront of this revolution. On page 4 you can read more about Fintech and what makes the UK so strong in the field.

The BBC’s Technology Correspondent, Rory Cellan-Jones is one of the most influential journalists covering his field in the world. He talks to EQ about some of the most exciting developments he’s covered recently and the importance of digital skills to our economy.

Please contact me at: marketing@ equiniti.com

I hope the themes of this issue resonate with you and your organisation. If you have any feedback on the magazine, please do get in touch with your thoughts.

The Equiniti Group: The following companies are registered in England and Wales. Registered Office: Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA: Equiniti Limited, no: 6226088; Equiniti Financial Services Limited, no: 6208699. Registered office: Sutherland House, Russell Way, Crawley, West Sussex, RH10 1UH: Equiniti Services Limited, no: 756582; Claybrook Computing Limited, trading as Equiniti Claybrook, no: 1287205; Paymaster (1836) Limited, trading as Equiniti Paymaster and Hazell Carr, no: 3249700; Equiniti Solutions Limited, trading as Equiniti Paymaster and Hazell Carr, no: 3335560. While every effort has been made to ensure that information is correct at the time of going to print, The Equiniti Group cannot be held responsible for the outcome of any action based on information contained in this publication. The Equiniti Group does not give any warranty for the completeness or accuracy for this publication’s content.

EQ magazine is produced and published on behalf of Equiniti by White Light Media.

Writers: White Light Media team, Lisa Labarte, Nicola Collins, Pádraig Floyd Designers: Eric Campbell and Matt McArthur www.whitelightmedia.co.uk Members of the CMA & PPA

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EQ magazine has been printed on environmentally responsible paper, manufactured using 50% recycled waste and 50% fibre from well-managed forests, controlled sources and recycled wood.

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3D Printing

2

DNA Profiling

The full potential of 3D printing is yet to be realised, but already it’s proving revolutionary.

Its application in industrial manufacturing is manifold: from food and weaponry to medicine. Consumerism will also be radically affected, with people able to manufacture goods at the click of a button. Consequently, 3D printing is providing exciting answers to many of today’s environmental issues, not least those surrounding the consumption of fossil fuel.

DNA profiling kicked off hundreds of technological applications that have changed everything from identifying murderers to gene therapy for disease management.

A near-future use of DNA tech looks poised to see the monitoring of businesses capitalising on natural resources by measuring their environmental impact on super sensitive marine life DNA, a microscopic gamechanger likely to cause macroscopic ripples in the water.

CONTENTS INSIDE THIS ISSUE

3

The App Store

When Steve Jobs said in 1983, ‘We need a software radio station,’ he voiced the vision that would become the App Store. Today we have a pool of resources allowing anyone to use, make, sell or buy software. All of this has seen technology evolve into a dynamic, digital organism. As multi-millionaire teen Nick D’Aloisio proved with news aggregator Summly, a winning app could be the 2014 equivalent to finding all five of Willy Wonka’s golden tickets.

4

Webcams

When a group of Cambridge University computer scientists rigged up a camera that would track the level of a distant coffee pot, they unwittingly created the webcam. Webcams have since shrunk the miles from one country to another through face-toface, on-screen interactions, which has irreversibly changed the way we communicate in an ever-growing world.

5

4D Scanning

If someone told you years before the advent of ultrasound that we’d be able to see unborn babies smiling or yawning on screen in 3D you wouldn’t have believed it. Add time into the mix and the result is moving images.

While the technology seems to have limited benefits to pre-birth health and is currently too expensive to be mainstream, there’s no doubt that it marks a moment of awe for those who’ve used it.

6

Solar Power

The increasing use of solar energy is signalling a change in how the modern world is powered. Although the efficiency of solar energy harvesting was initially questioned, recent developments are proving it to be a promising source of energy. More companies are investing in solar power and with solar modules becoming cheaper, global demand is increasing. Add to this the untapped potential of solar power in developing countries and a bright future may be ahead.

EQUINITI MAGAZINE NUMBER 13 Cover photograph

by Anthony Upton

FEATURES

4 Formidable Fintech

How Britain can become the Fintech capital of the world

8 Guidance guarantee

A closer look at the world of preretirement counselling

10 Straight tech talking

BBC Tech Correspondent Rory Cellan-Jones on the next digital revolutions

15 Share the wealth

Capitalising on the booming wealth management industry

16 Reassessing the risks

The latest update to the FRC’s Corporate Governance Code

18 Get smart

The best in tech, people and data services in Equiniti’s Intelligent Solutions

20 Equiniti on the radar

CEO Guy Wakeley on harnessing Equiniti’s technological potential

24 The engagement challenge

Pension schemes must find new forms of communication to engage members

26 We’ve come a long way

Tracking three inventions with proud pasts and bright futures

28 Power to the people

Taking employee portals into the 21st century with PeopleSpace

30 Cyber cyclone

Guarding against the growing threat of cyber security

32 Changing fortunes

The IPO market springs back to life

35 Community what ...?

Decoding job titles in a digital world

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FINTECH

Equiniti’s Chief Operating Officer, Lucy Dimes and UK Trade & Investment’s technology specialist, Shaul David explain how the UK can become the Fintech capital of the world

Formidable

FINTECH T he UK government’s ambition is clear: to make the UK synonymous with Fintech in the same way that Silicon Valley is synonymous with digital technology. In August, Chancellor George Osborne declared, “I believe we can make London the Fintech capital of the world.” Indeed, the government may not be too far from achieving this. The UK and Ireland is already the fastestgrowing region for Fintech investment, with its value estimated at a staggering US$265 million in 2013.

Fintech simply means any technology which is used to deliver financial services.

Over the past two years, there has been a proliferation of enthusiastic Fintech companies, armed with a wealth of funding and bright ideas. “Fintech is currently thriving in the UK and Equiniti is at the forefront of this wave,” says Lucy Dimes, Chief Operating Officer, Equiniti.

“What we have seen recently is the segregation of Fintech into two main subgroups,” explains Shaul David, Fintech Specialist, Financial Services Organisation, UK Trade & Investment.

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“Fintech is an exciting area of growth for us as cutting-edge technology is key to the services we offer now and in the future” – Lucy Dimes

“Traditional Fintech is companies which have provided services to financial services organisations for a long time; and then there is emerging Fintech, the new kids on the block, many of which are disruptive and reshaping how financial services operate. The government is aiming to open up competition within the sector, and allow new providers outside of the usual incumbents to compete within the market.”

Financial services organisations are also recognising the potential value Fintech brings. Lucy says Equiniti is providing smart and innovative Fintech solutions for its clients: “Our heritage in payments, pensions and share registration is a great basis for us to build on. Fintech is an exciting area of growth for us as cutting-edge technology is key to the services we offer now and in the future.”

The UK has a unique combination of factors, which has helped the growth of Fintech both in London and across the UK. The country has a wealth of business capital, an interconnected financial services infrastructure and

:: FINTECH IN NUMBERS

6.9

1.9

5.6

25

mobile phone subscriptions by the end of 2014

smartphone subscriptions in 2013

estimated smartphone subscriptions by 2019

estimated networked devices by 2020

BILLION

140

40

estimated UK market size of online payments and FX

UK GDP value of financial services

MORE THAN

BILLION

1.9

£

BILLION

£

BILLION

BILLION

%

of the global population will be online by the end of 2014

BILLION

1,175

£

consumer e-commerce spent per capita in 2012 in the UK

SOURCES: THE BROADBAND COMMISSION, THE STATE OF BROADBAND 2014: BROADBAND FOR ALL; UK TRADE & INVESTMENT, LANDSCAPING UK FINTECH

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FINTECH

“We see the UK not only as a destination but as an ideal base for reaching overseas markets”

supportive regulatory bodies. London also has the enviable position of being one of the world’s largest centres for financial institutions, with an abundance of foreign banks and financial services companies making the capital their home.

“The government and regulatory bodies are based in the same place, which helps dialogue and conversation between the three parties,” Shaul says. “This is very powerful for a Fintech business. Although it’s operating in a very heavily regulated environment, it has the opportunity to discuss innovation, both with its clients as well as with the regulator. We see the UK not only as a destination but as an ideal base for reaching overseas markets.”

There is a big appetite from consumers in the UK for new, innovative models which will improve their experience: the UK spends more on e-commerce in comparison to Germany, France and the USA; and the UK has been one of the fastest adopters of peer-to-peer lending.

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Lucy believes Fintech will provide more choice for the consumer as it continues to develop, with a particular emphasis on relationship management and product development.

“Efficient platforms, software and payment systems help our clients get on with what matters – growing their business,” Lucy says. “We have focused on a number of key acquisitions to offer our clients more solutions to provide the best possible experience for them and their employees or customers. With our intelligent acquisitions, such as Pancredit (intelligent loan administration, lending software and origination services) and Invigia (specialist in technology, financial and administrative services), we are strengthening our technology platforms and expertise for the benefit of our clients.

“Equiniti is in the process of establishing a new Fintech hub in Cardiff which will feature an interactive presentation suite providing hands-on experience of our new

GETTY IMAGES

– Shaul David

Chancellor George Osborne is backing Fintech

THE BIG FOUR OF FINTECH

There are four main subsectors of Fintech, in which the UK is particularly strong: payments, software, platforms and data analytics. Equiniti is a Fintech provider offering leading solutions for clients, which encompass each of these subsectors and more.

1

mobile technologies and an academy for training, mentoring and development.”

Fintech will also impact the sector in many ways we can’t even predict yet.

“We are nowhere near capitalising on the opportunities we currently have,” says Shaul, “but I think the next wave will be in streamlining processes within the sector, particularly in the capital market and investment management space, which will enable businesses to run more cost-effectively.”

Lucy agrees: “Improved technology will limit legacy systems and the technology issues that come with this.

Businesses will be able to save time with costly administration tasks. As we move forward, technology such as artificial intelligence, big data and robotics will change financial services unrecognisably.

It is a very exciting time. We will continue to develop our Fintech solutions with our clients and their changing needs in mind.”

PAYMENTS

Payments is a huge area of potential: the online sector is expected to grow substantially, alongside a change of operating models. Equiniti International Payments has access to one of the world’s largest payment networks, and payments can be made in 130 countries and 90 currencies. The online payment system is quick, easy and secure, and allows companies to manage privacy and set up secure authorisation processes. Equiniti also uses MyPeopleAX, the only payroll product in the world certified for Microsoft Dynamics AX. The system is HMRC PAYE recognised and has an intuitive interface, which gives our clients flexibility.

3

PLATFORMS

Several unique platforms, including in peer-to-peer lending, trading and personal wealth management, as well as aggregators, have shown the viability of Fintech. Equiniti manages the payrolls, HR, share schemes and preretirement pensions for around 1,600 businesses. The Xanite platform is behind Equiniti’s core wealth management and investment solutions. Xanite offers a configurable, fully integrated, browserbased, comprehensive front-to-back solution that can either be deployed as a single application or integrated as components into your existing platform.

Web-enabled front-office tools give your customers direct access to the Xanite platform.

2

SOFTWARE

Fintech companies are offering innovative software solutions for risk management, banking, asset management, insurance, accounting and more. Equiniti’s Pension division uses Compendia Self-Service, a responsive self-service website with an enhanced interactive feature set that keeps company pension members engaged, informed and empowered. The features enable members to update their personal details, track investment performance and switch investment funds. A benefits modeller also helps members make important decisions about their retirement planning, by looking at the impact of different retirement ages and adjusting contributions.

4

ANALYTICS

Data research and analytics will help improve the customer experience and the monitoring of business activities. The comprehensive software solution for regulated complaints and feedback management, Charter Continuum, works across departments and even across entire enterprises, plugging seamlessly into their existing management information systems. A host of well-known blue-chip businesses rely upon it every day to gain and act upon the insight it gives them into their customers. Renowned for its flexibility, reliability, powerful root cause analysis and Management Information reporting capabilities, Charter Continuum delivers real business benefits with a measurable return on investment.

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PRERETIREMENT COUNSELLING

Guidance GUARANTEE Pádraig Floyd takes a closer look at the world of preretirement counselling

E

ngagement with scheme members is no longer a simple job of sending out an annual statement. For those who are approaching retirement, it’s a different case altogether and one that cannot be addressed by a brief information session followed by tea and biscuits.

This is in part due to defined contribution (DC) increasing the level and frequency of engagement required. But the real game changer came in the March 2014 Budget announcement when Chancellor George Osborne introduced the concept of a guidance guarantee. Although the government had already allowed for £150 worth of guidance to be available as a tax-free benefit, the provision of high-quality guidance is likely to cost in the region of £700. This creates issues both from the perspective of who picks up the bill and who is delivering the guidance and whether that guidance is likely to be of sufficient quality.

The real question is around how schemes move from delivering generic guidance that allows members to make informed and rational decisions, to creating high-quality information that not only educates but engages the audience.* By transforming the level of access individuals have to their pension fund from the age of 55, the Chancellor completely upended the level of counselling required for members. As the range of options varies from members choosing to buy an annuity at the point of retirement, right through to taking all of their pension fund as cash, the old-

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fashioned lifestyle approach of moving members towards a gilts-and-cash fund five years from retirement is now dead.

Newer approaches using more flexible and diverse default funds are also no longer fit for purpose. Schemes will not be allowed to leave members invested without regular reminders that investment strategies should be reviewed. In fact, schemes will now be held responsible for information given to members.

It is for this reason that any counselling offered by the employer or scheme must take into account an individual’s larger financial circumstances and not simply their pension savings. Naturally, employers will need to handle discussing such a topic in a sensitive manner.

Of course, with the budget came the announcement that guidance would be available via government-supported agencies like Citizens Advice, or via telephone and online with The Pensions Advisory Service (TPAS).

Both of these organisations have a long and successful history in advising individuals on financial matters, and in the case of TPAS, pensions. However, schemes will not be off the hook by suggesting members simply approach these organisations. A framework should be put in place within the business to meet the requirements of the guidance guarantee.

The allowance of £150 worth of advice as a tax-free benefit may be useful, but is not going to go very far, particularly if spread over the working life of a member.

The guidance guarantee put in place by the government is expected to include a degree of face-to-face time with whoever offers the advice. This must be factored into the cost and makes it look increasingly likely this burden will fall upon the plan sponsor.

Any preretirement counselling must fully integrate with whatever programme of member engagement is to be applied across the organisation. A scheme should also look to ensure its preretirement messages are not only compatible with the rest of its communications, but that all communications have a logical progression towards making decisions at retirement.

Schemes may consider the cost of face-to-face advice or guidance on an individual basis as too costly. However, training up internal experts and advisers to offer guidance might be an appealing alternative. This would not only address the need for delivery, but would ensure the communications are completely integrated.

Making use of face-to-face in the form of seminars targeted at specific milestones from retirement is another option. There are companies that tailor content to

Saving for retirement is a lifetime’s work

The guidance guarantee put in place by the government is expected to include a degree of face-to-face time with whoever offers the advice

workforces and provide highly targeted guidance to influence the individual to seek more information, approach the employer to help them, or identify they have complex needs and seek independent advice.

Schemes should consider how Citizens Advice’s and TPAS’s offerings might be integrated within the process. There may be ways the scheme can make use of literature or helplines to offer support to members.

This extends far beyond the employer, with a long-recognised need for financial education before individuals even enter the working population. The government has made strides towards introducing basic financial understanding into the national curriculum this year and pilot schemes of after-school savings clubs for four-year-olds have attracted support

from certain community groups. To be the most effective, engagement must begin from the moment an individual is enrolled and continue throughout their working life.

This sounds onerous, but over time, a little and often is likely to be easier to plan, no more expensive and probably more successful than major campaigns.

Saving for retirement is, after all, a lifetime’s work. Surely, the engagement designed to reach that outcome must be equally consistent to ensure the objective is reached. * Employers and schemes will need to ensure that they are not giving financial advice within the scope of the Financial Conduct Authority when they are not authorised to provide this advice.

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RORY CELLAN-JONES

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Straight TECH TALKING

BBC Technology Correspondent, Rory Cellan-Jones switches EQ on to the next tech revolutions

T

ANTHONY UPTON

his smart watch tells me that I have 10 new interactions on Twitter, and the other day it informed me I had 617 new emails. How is that useful to me?”

It’s a line that neatly sums up what the BBC’s long-serving technology correspondent, Rory Cellan-Jones can do so expertly. Cut through the endless hype and jargon that swirls around the tech business world and boil it down to something with meaning and relevance for the layman.

Today, Cellan-Jones is probably the most influential journalist talking about technology in the country. And while he has been immersed in technology, start-ups, gadgets and all things digital since writing his first book, Dot.Bomb: The Strange Death of Dot.Com Britain, in 2001, his expertise does not spring from a traditional technical background.

“I’m from an arts background. When I was at university in Cambridge I studied languages and saw myself as an arts person. I didn’t even know people who studied sciences and it was a closed world to me. But, I regret that and I think those two worlds come together a lot more now. It was something I came late to but now I tinker where I can.”

After university he admits to being captivated by the romance of the roving life of the foreign correspondent, and he joined the BBC in 1981 in Leeds, returning to London in 1990 to work as a business correspondent, which led him eventually into the tech world.

“By the late 90s I was fascinated by what was happening with the rise of the internet and in particular the dot.com bubble and I was bagging these stories whenever I could – the rise of Google and all the IPO craziness,” he says.

“The other day, this smart watch told me that I had 617 new emails. How is that useful to me?” equiniti.com > 11

RORY CELLAN-JONES

“I also got our first home computer in the mid-90s and we were bewitched by the possibilities it opened up. It’s just brilliant that tech has become personal. When I was growing up it was remote. It was about space shots and nuclear power stations and big engines. It was a thing of wonder but you were never going to get your hands on a nuclear power station or fly to the moon. The computer at my school filled a huge lab and only boys studying physics were allowed near it.

“All the interesting businesses were the new tech firms and this came together with my personal fascination with what computing and the web would offer and led naturally to my current role.”

His working life changed radically. As a business correspondent he was on television more regularly, but with less impact than in the technology specialist’s role. Now, there are many more platforms to broadcast stories and there is an appetite for technology news, but the subject matter can be difficult to articulate.

“The trouble with technology is that the really interesting stuff is not a ‘this happened today’ type of story, but is more about what is going to happen and how it will change your

life. It is hard to get these big ideas across.

Take the Internet of Things – the fascinating idea that we are going to have a completely connected world, that every single object one way or another will be online. Firstly, the term is horrible, but also, why should that be on The BBC News at Ten tonight? It can be difficult to find the right hook to hang these stories on, but getting these big themes on is one of my obsessions,” he says.

Of course, technology has not just changed the subject matter Cellan-Jones is covering, but the way he gathers, processes and broadcasts the news.

“When I started we were working on film that we had to wait to be processed,” he says.

“And then when I came to London we were on video but it was terrible quality and it was a huge piece of kit with a great big, heavy camera and an umbilical cord to the sound recordist, who had the equivalent of a VHS. So all of that has obviously massively changed. New technology has changed my working life, not so much in terms of what I do for The BBC News at Ten, but by giving me the ability to look after myself, especially on platforms like YouTube and Facebook and Twitter.

NEXT BIG THINGS

RORY CONSIDERS FOUR MORE AREAS RIPE FOR REVOLUTION

Wearables

Robotics and AI

Fintech

The big question for business is about the relationship with their staff and whether they want to monitor them. If you are going to monitor staff performance more closely and sell it to them as something that will enhance their lives, that’s going to cause a huge debate. In terms of customers, all of this technology is going to provide a vast amount more data.

We are continually being told that data is this vast goldmine that every company will need to know how to use. I’m slightly sceptical here because I have heard so much big data rubbish in recent years, but there will be companies that use that in clever ways.

Advances in AI, machine intelligence and robotics are going to make every business think about the number of people it needs to employ and how these devices and this software and capability will change the structure of things.

Also, if we look at driverless cars, having them will have a massive impact on our cities and our social lives, it could lead to a huge rise in alcoholism, it will have all sorts of social implications. But, the computer took so long to change business in many ways, and robotics and AI still feels a long way away.

Banking is the industry that really needs to be disrupted and wouldn’t it be great if it was? I think it might happen now. We’ve seen money transfer revolutionised in Kenya, but not here. The reason is that it is meeting a need in Africa, where most people are unbanked. If you work in one part of Kenya and want to send money home, you’ve got the choice between getting on a bus and taking it or sending a text, so it’s a no-brainer. Over here, very few people are in that position.

But there has been a whole wave of attempts to innovate and so far none of them have quite worked.

Bitcoin is obviously a fascinating

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area but you are seeing a lot of resistance from regulators for very good reasons and also from the banks. If a crypto-currency like Bitcoin did take off, wiping out the cost of transferring money across borders would be huge, and the potential for cash to disappear would also be a big game changer.

Cellan-Jones is fascinated by the prospect of a completely connected world, where one way or another every single object will be online

Healthcare There is a lot of potential in the UK not in the provision of healthcare but in the relationship between patient and professional.

Just very simple things could make a big change. For instance, I would love to book an appointment online with my GP. That is starting to happen but it has been incredibly slow. I phoned my surgery recently asking for their email address and they said they weren’t allowed to give it to patients. I thought that was pretty scary. There is obviously potential in things like remote monitoring and Skyping your doctor.

“I got our first home computer in the mid-90s and we were bewitched by the possibilities it opened up”

“I started work in the age when you work incredibly hard and then you go home and you completely switch off, but I never switch off now. Social media has made a huge difference to my work and mostly very beneficially but the first thing I look at is Twitter on my phone and the last thing I do at night is probably the same, so work leaks into every area of your life.”

With daily dealings with the UK’s established tech giants and start-ups alike, Cellan-Jones is well placed to gauge the country’s digital strengths and weaknesses, and says he’s feeling upbeat and is less sceptical than before about the prospects for schemes like London’s ‘Tech City’ (the publicly funded East London tech cluster).

He says: “I have been very focused on Cambridge being the UK’s most powerful tech cluster. There you have real science spinning off very clever tech companies. Tech clusters don’t happen overnight. Silicon Valley has been going for 50 to 60 years and Tech City does have a lot of energy about it.

“I think there aren’t many very impressive companies born out of London so far, and there is still a big funding gap. What everybody tells me is that actually getting a company started is pretty easy these days. It doesn’t cost much and modern web tools are cheap or free, but there is a big gap when you want to scale up and there is still a caution that you don’t get in Silicon Valley, where there is just such a huge appetite for risk. But there are clusters and countries around the world saying the same about themselves, everybody is saying, ‘Why can’t we be like Silicon Valley?’ And the answer is: because it bloody well takes time.”

So, is there an important role for government in fostering this confidence?

“Businesses have a schizophrenic attitude to government,” says Cellan-Jones. “Half of the time they are saying, ‘Get off of our backs and leave us alone,’ and half the time they are saying, ‘Where’s the money?’ I think what governments can best do is almost cultural rather than financial, and having been critical of Tech City, I actually now think, forget the money that has been spent on it because that’s not much, what it has done is shine a light on entrepreneurship and the possibilities.”

Where governments must have an impact though is in combating digital exclusion. For years, businesses have complained of a lack of skills coming through and Cellan-Jones recognises a gap in technology education.

“It may not be as simplistic as getting kids to code, because most kids frankly are not going to end up as coders, but it is in some ways getting kids to think creatively about technology and be creators rather than just

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RORY CELLAN-JONES

consumers. I think we often beat ourselves up about this, but it’s a global problem and we have at least had this big debate and started doing something about it,” he says.

“Away from schools there are plenty of adults lacking digital skills. I think the other looming problem is robotics and artificial intelligence and the threat they could pose to a lot of jobs and whether that will have a disproportionate effect on those people without digital skills.”

For businesses, Cellan-Jones says the main technological concern is knowing when to change. “It is always impossible to say when to adopt a new technology. The supermarket world is a great example. Tesco is obviously in crisis at the moment yet it was a leader and at one point it was Britain’s biggest online business because it had gone early into online delivery. It brought out a tablet, it has done all of the right things, but then the old world caught up with it and it has found that being ahead on the technology front doesn’t save you if in the old traditional areas you are going to get lost.”

“In the future everything that I can see developing comes back to the mobile connected revolution” So, where will the next great technological leaps forward be taken? Cellan-Jones believes the biggest immediate developments are still to come from the continuation of the smartphone revolution. “In the future everything that I can see developing comes back to the mobile connected revolution. So if we are talking about the Internet of Things, how will I be controlling my smart home? Well, it will be via my phone.

If we are talking about the development of social networks, well the way that people will continue to come to that, new people around the world, is via the mobile phone. We’re seven years into it and we are only five years into the app revolution and so I think that has a long way to go.”

:: ALL EYES ON GOOGLE GLASS

Rory road-tested Google’s experimental wearable computer for the BBC and found a device in need of further experiment

“The failure is in the design. Do I want to walk around looking like this? I did it for two months but I was doing it as a journalistic exercise and so that is like a shield. But the minute I didn’t have to wear it for journalism,

14 > EQ | winter 2015

I took it off. A lot of wearable tech at the moment is essentially an accessory for your mobile phone. Google Glass does a couple of useful things, it’s a great camera and occasionally I found it did flash a useful

message up in my eye. I found it much more useful than the smart watch I’ve been using. I think Apple will go on to dominate the smart watch market, but the question is if it will be a market worth dominating.”

WEALTH MANAGEMENT

SHARE THE WEALTH With society focusing more on taking better care of its finances, the wealth management industry is booming

T

he recent financial crisis forced a re-evaluation of society’s financial wellbeing. This has led to an increased awareness of spending and new legislation that helps people to consider their financial futures. One area of financial services that has benefitted from regulatory changes is wealth management.

“Recent changes in regulation have played a huge part in the wealth management boom,” explains Mark Taylor, Managing Director of Equiniti Investment Services. “The Retail Distribution Review (RDR) has encouraged individuals to take better control of their financial futures, and to help them to do this, it has provided them with more choice.”

Although RDR is a positive move for the consumer, in some cases it has increased costs for wealth management firms, who have had to consider outsourcing some of their middle and back office functions to cut costs.

“Equiniti Investment Services is able to offer platform capabilities to wealth managers that will help them to drastically reduce their costs,” says Mark.

“We provide a wide range of products and services that extend beyond share dealing to include mutual funds and foreign exchange. This helps us to provide platforms to wealth managers so that they can manage their customers’ assets, whilst keeping their costs down.”

Technology plays a huge part in what Equiniti Investment Services offers: “Technology underpins our entire business,” Mark says. “When we acquired peterevans two years ago, we invested heavily in that business and the Xanite platform, which is primarily a custody, settlement and trading platform. This level of commitment to leading-edge technology has helped to set us apart from our competitors,” Mark says.

A recent adopter of Equiniti Investment Services’ offering is Money on Toast, a groundbreaking provider of online financial advice: “Money on Toast have worked with us very closely to

“The Retail Distribution Review (RDR) has encouraged individuals to take better control of their financial futures” ensure that we deliver a platform that fits their needs,” Mark says. “We are now undertaking their investment administration, which is largely down to our technology offering.”

Equiniti Investment Services has also made a number of acquisitions, including that of the direct-to-consumer business, Selftrade: “Our acquisition of the assets of Selftrade’s business allows us to take a much broader step into the direct consumer marketplace,” says Mark.

Equiniti Investment Services’ people also play their part in setting the business apart from the competition: “Our team is very well skilled and respected in the

marketplace,” says Mark. “In an industry that has seen a lot of change recently, they have handled this admirably. We’re also market practitioners, with our own direct-to-consumer business, which puts us in a much stronger position to adapt and provide creative solutions to any challenges that arise within this space.”

For more information about Equiniti’s wealth management solutions please contact Huw Thompson on +44 (0) 7860 533 541 or email huw.thompson@equiniti.com

equiniti.com > 15

GOVERNANCE

Reassessing the risks The Financial Reporting Council’s Director, Corporate Governance, David Styles puts the latest update to the Corporate Governance Code in context

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hile the media coverage often focuses on remuneration, the key issue in the latest update to the UK Corporate Governance Code was going concern and risk reporting. This arose from the financial crisis as it became apparent banks and others in the financial sector weren’t reporting adequately on the risks they were facing.

Lord Sharman was asked by the FRC to investigate this further. He found that there was misunderstanding by investors about companies adopting the ‘going concern’ basis of accounting. Investors were inferring longer-term viability on the basis of going concern statements than was strictly the case.

It took time to get the recent Code changes right, with three consultations taking place. Any solution had to address the discrepancy between the expectations of investors and the intentions of the companies when they made the statements.

Inevitably there were divisions amongst our stakeholders, but a number of corporates and investors supported the fact that companies needed to say more about judgements on risk and the factors they were taking into account, while on the investor side they needed to make considered judgements about the information they were being given.

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The Code now asks companies to make two statements: a going concern statement on the basis of accounting principles and a longerterm viability statement taking into account the company’s current position and risks, and its future prospects, and significant risks arising.

The directors can decide the time period for this statement, which should be at least a year but we hope it will be longer. There is also flexibility about how directors structure the statement.

We are not asking directors to hire a clairvoyant: boards should already be assessing risk effectively. But we are asking them to be more transparent to investors about their thinking. If the statement is made in the Strategic Report, it is covered by the safe harbour provisions in the Companies Act. As long as the directors make the statement in good faith and can demonstrate this, they should not be liable to action by shareholders. This should give directors more confidence in how they disclose the information.

The role of investors is crucial too. When companies make these statements it will be very important to assess them carefully and make considered judgements.

This fits with the FRC’s vision, which is looking to the long term and making the UK an attractive place for investment. In line with this, the Code now asks companies to explain remuneration

Sometimes if you start from a blank sheet of paper and decide what you need you can come up with reporting which is much more effective policy in terms of how it benefits long-term company performance; it also asks companies to describe how they will engage with shareholders following significant votes against a resolution at a General Meeting (full details are available on www.frc.org.uk).

Inevitably it will take a certain amount of time to get used to the new disclosures. Inevitably there can be a herding instinct, but companies should be thinking about their own individual situations and how best to be transparent. We want companies to be thoughtful about governance, and make good explanations where they do not comply, rather than ticking boxes.

The first of the new governance statements won’t be required until well into 2015, so there is plenty of time to prepare, but it is never a bad thing to start early.

We have also changed the preface of the Code to talk about boards ‘setting the tone from the top’. It has to be said, there’s still a good deal of mistrust of the financial sector and about business more generally. Without being too prescriptive we wanted to give companies a steer that there will be shareholders and stakeholders who don’t feel that their concerns have been taken seriously or been dealt with, so they’d like to know more from companies about how they go about their business. And we need to address an unwillingness to talk about risk, which became apparent following the crisis.

The FRC believes that better engagement by shareholders helps to create better-performing companies, which in turn helps to give better returns to investors. It should be a virtuous circle. We want the UK to be somewhere which has a good reputation for governance so that investments here will be looked after, but this should not be on the basis of a rule book, which means you can’t take reasonable and proportionate risk.

We’ve been meeting with many company secretaries recently, and we enjoy a good relationship with the ICSA. The Code changes affect a number of players, but I’m very conscious that company secretaries are at the coalface when it comes to delivery and reporting.

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INTELLIGENT SOLUTIONS

Equiniti BTS

Pancredit

Hazell Carr

Get SMART Equiniti Data Services

Equiniti’s Intelligent Solutions is bringing together the best technology, people and data services from across the business

18 > EQ | winter 2015

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hat we are really good at is understanding the challenges our clients face, what the pinch points are and what issues need to be resolved within their businesses,” says Matt Porter, Managing Director of Intelligent Solutions. “We use a combination of people, processes, technology and data to do this and we can deploy one or more of those quadrants for our clients. I think the sum of our parts is much greater than the individual units.”

The Intelligent Solutions division recently brought together six businesses from across Equiniti, and the businesses, comprising Hazell Carr, Pancredit, Equiniti Business Technology Services, Invigia, Equiniti 360° Clinical and Equiniti Data Services, are now stronger than before. “It became clear that there was a strong synergy between each business unit and we were able to roll them together and create one intelligent

Invigia

Equiniti 360° Clinical

solutions proposition,” explains Matt, who joined the division as Managing Director last year. “The division offers a unique blend of scalable products, bespoke platforms, experienced people and innovative intellectual property.”

Matt’s vision will see Intelligent Solutions transform into the specialist, technology-enabled, data-driven arm of Equiniti. By 2016, the focus will move from individual brands to integrated, capability-based divisions, which will encompass remediation, HR outsourcing, data services, specialist public sector and complaints.

“We will nurture and grow each business as best as we can and not forget what made those businesses great in the first place as we move forward,” says Matt. “There is currently a great sense of momentum and positivity within Equiniti and we are aiming to become disruptive in the technology-driven services space across the UK and Ireland.”

PEOPLE BUY FROM SKILLED PEOPLE George Xenoudakis george.xenoudakis@hazellcarr.com

TECHNOLOGY FOR INTELLIGENT DECISION-MAKING Graham Donald graham.donald@pancredit.com

Innovative technology is only one part of what Intelligent Solutions offers; highly skilled people are also at the heart of our business.

Established in 1997, Hazell Carr provides resourcing and outsourcing expertise for financial services and regulated industries.

It also complements other businesses within the division, including Invigia, which provides clients with complaint, case and feedback management software.

“We are the UK’s leading provider of resources across regulated complaint handling, customer service, case handling, pensions administration and project

management within the regulatory environment.

We have access to a network of more than 3,000 skilled specialist contractors,” explains George Xenoudakis, Account Director. “When our clients – a bank, insurance company or lender, for example ­– cannot find the necessary resource, they come to us. At the same time, when there are pockets of pressure such as regulated complaint handling, our clients only have a finite number of employees and we can provide external assistance rapidly.”

Over the past two years, Hazell Carr has developed three tiers of capability: Advanced, Associate and Academy contractors.

Advanced provides highly sought-after senior people including actuaries, operations and compliance directors; the Associate level encompasses our qualified and non-qualified case handlers who have worked in the industry for many years; and finally we select bright graduates for our Academy to fulfil process-driven roles.

“Our graduates are assessed and trained by us, and this type of resource has proven extremely successful, particularly for PPI complaints over the last couple of years, as sometimes the resourcing requirement is less technical,” says George. “It is important to invest in the contractors of the future.”

One company sitting underneath the Equiniti umbrella is Pancredit, a software house for the lending community with a strong heritage across a variety of sectors.

“We provide a full end-toend solution from origination to collection. Software companies usually only provide one of those products but not the whole range,” explains Graham Donald, Managing Director. “Whether customers are applying for loans on a website, through a call centre or in a branch, our software captures the full application details and then applies the lender’s credit rules to the application through a decision engine. The set of criteria can be very basic such as minimum and maximum age through to more sophisticated streams, where we can interface with credit, anti-fraud and antimoney laundering checks to find out more about the customer’s profile.”

Stricter requirements surrounding consumer credit

recently came into force when the FCA took over the regulation of consumer credit from the Office of Fair Trading, and Pancredit’s solutions help lenders observe the new rules.

Despite the recession, the consumer credit market is currently very buoyant, especially within motor finance and personal loan finance where there have been substantial increases in volume.

“The FCA is keen that lenders be more open, transparent and cooperative. Every single person who has a consumer credit licence has to apply for FCA permission,” explains Graham. “With the FCA enforcing stricter rules, the change will be very good for the industry and give reassurance to the general public that there is an organisation ensuring that lenders are being compliant.

It is also operating on a principles basis so lenders are very focused on treating customers fairly.”

As well as freeing up internal resources, cutting costs and

being incredibly efficient, Pancredit’s systems also encourage responsible lending and help foster trust between customers and lenders.

“By using a more intelligent approach, it allows lending to be quicker. Imagine you want to buy a car. While you are out on your test drive, Pancredit can identify whether to accept you for credit, create the credit agreement for electronic signature, pay the dealer the funds and let you drive away within the hour,” says Graham.

“Part of what we do through our solution is help people make intelligent and informed decisions.

“Lenders are now very strict in making sure that customers can pay back what they borrow so our software checks affordability and only matches customers to loan products that are suited to their financial circumstances,” continues Graham. “The customer also has more trust in the lender as they know they are being treated in a fair manner.”

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PUTTING

EQUINITI

ON THE RADAR CEO Guy Wakeley is harnessing Equiniti’s technological potential to plot a course to a bright future ADAM BRONKHORST

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GUY WAKELEY

“We have a client base to die for with 2,000 UK B2B clients including more than half the FTSE 100”

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s a former mathematician and engineer it should not come as a surprise that Equiniti CEO Guy Wakeley has a firm grip on the numbers and an eye for detail. And, as a pilot and artificial intelligence expert, it’s clear that his vision for the company stems from a genuine passion for technology.

In just under a year in charge, Guy’s fresh perspective has switched the company’s focus sharply onto its technological prowess, setting a new course to fully capitalise on its huge customer base and abundant talent.

“What we’re here to do is to provide technology solutions in high-risk and complex areas. I’m turning the focus of the business round and putting the technology right at the core of the offering rather than being an enabler of the offering,” he says.

Guy, who has a PhD in applications of artificial intelligence, moved from property and services firm Morrison plc to Equiniti in 2014 sensing a unique opportunity.

“We have a client base to die for with 2,000 UK B2B clients including more than half of the FTSE 100,” he says. “The other attraction was the massive breadth of technological capability. The business has been positioned as a service provider – as a doer of things. But, actually our core business is as the creator of technology with which to do things, and what has not yet happened is properly selling that technology through that fantastic customer base.”

Equiniti has more than £60 million invested in its own technology and provides services that touch about 24 million people – more than half of the financially active UK population. They are loyal customers too, with the average

length of tenure among FTSE 100 customers at 21 years and large public sector clients on the books since 1836.

Guy says: “This year we will pay more than £75 billion out to those members of the public through their share dividends and through their pension payments.

We’ve got a very broad and deep relationship with the UK financial sector, so it’s absolutely crammed with previously untapped opportunities.”

Guy’s task begins with changing perceptions of Equiniti from being seen as a rock-solid service provider working under the radar, to a technology provider with a fully fleshed-out brand identity, engaged in proper dialogue with the investing public and corporates. It’s a task he feels well equipped to tackle.

“It’s a new sector for me, but, being new to it, the opportunities were obvious.

If you’re a proper B2B organisation you establish deep dialogue with your customers to work out what they want and then you shape your offering to match those customers. I’ve got a lot of experience of doing that in construction, in engineering and in project finance – crafting things to suit opportunities.

“I’ve focused on getting the business looking out, getting people’s chins up rather than down, talking to customers, finding out what customers want and then managing those customer relationships over a broad range of services.

“When I can help corporates interact differently with their customers and their employees, then I can start to turn some of those customers and employees into my customers. Our business model is much more like what Experian or Twitter might do rather than perhaps what Capita or Serco might do. It’s building a consumer presence by providing technology into corporates.”

It’s the technology, stupid

Guy was raised in Durham in the 1980s and it was a desire to work at the cutting edge of engineering that brought him to Cambridge University with the help of sponsorship from Rolls-Royce. Today, he lives what he describes as a “simple” life in Leamington Spa with his wife and two children, but the weekends are slightly more hi-tech as he indulges his passion for planes and works as a flying instructor.

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GUY WAKELEY

:: EYE ROBOT

With a PhD in applications of artificial intelligence, Guy has an eye on the full potential of AI “There have recently been huge increases in computing power – the emergence of the cloud, and the ability to go omni-channel.

There are a few subtle things that have made huge progress in the last five years. One of them is voice recognition. Suddenly in the last couple of years it’s come on leaps and bounds.

If you can teach a computer to listen and to speak back, then you’re not far off teaching the computer to read. This isn’t light years away, it’s within a couple of years. Therefore, you’re not far from being able to get a book, and give it to the computer to read the book.

If we wanted to learn to trade stocks and

“I’m really interested in process and procedure, but also how you communicate things, so I really enjoy it,” he says.

With technology now at the heart of financial services, the way we interact with our banks is changing. Banking is becoming digital by default, and this presents those banks with old-fashioned legacy systems with a problem as they struggle to present a common view of their customer.

Guy says: “They might have an insurance view of the customer, and a current account view of the customer, and a mortgage view of the customer. But they can’t currently understand how they interact with them and what their customers think of them, and therefore, how they can shape their product to suit them. So, being in a place where we can provide technology to help large institutions interact differently with their customers is a really powerful position. That really is at the emerging, cutting edge of what the financial services sector is doing this year and next year.”

At the end of 2014, Equiniti launched our own software platform running our

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shares, we’re not far away being able to buy Share Dealing for Dummies, and give it to the computer and then the computer learns how to do that for us. Some of this new AI technology, particularly around language and what language means – syntactic processing – means that the way in which we interact with consumers is going to change very rapidly.

We have an innovation team looking at developments in the market and harnessing them, and certainly anything that we do direct to consumer will be digital by default. It has to be. It has to be on iPhone, on Android, and it has to be able to learn and speak.”

retail share dealing website, making it one of the UK’s largest stockbrokers, dealing directly over the web with hundreds of thousands of retail investors.

“People of my children’s generation have a completely different relationship with banks,” says Guy. “There is now the emergence of peer-to-peer lending and crowd funding. These are different ways of raising and saving capital, so the bank’s conventional role in society is definitely changing dramatically.

“There’s a whole new market of investors who don’t want to go to a sleepy, oakpanelled drawing room to buy shares.

Instead, they want to get out their iPad or their smartphone on the Tube or train and see where their portfolio is in real time and make small investment decisions by themselves. There is a whole explosion of new market here, but you need agile digital technology to satisfy it, and the banks don’t have that technology. For new entrants who are technology-enabled, there’s a lot to go for.”

Guy admits to initially underestimating Equiniti’s own technological capability.

More than 400 developers and IT professionals have developed all the company’s applications and infrastructure – unlike any competing firm.

He says: “It’s completely blown me away.

We bring the technology, and you can buy it as a service, you can buy a licence, but it can also come with the people. We can run your end-to-end process. We can give you the technology, we can report on it for you, and we can actually fix it for your customers. We simply don’t have a direct competitor in that space.

“We built the technology for the retail sale of Royal Mail in a number of weeks, and we ran it completely on our own kit.

We went from zero to concluding the biggest transaction of 2013 in a way that was completely within our control. This is Amazon-scale IT capability.”

Hitting fifth gear

It’s clear that everything is in place to make the next few years exciting times for Equiniti. Smart acquisitions have broadened the service offering and made sure the company keeps pace

with developments – and there are more to follow. Guy says: “When we see owner-managed businesses that have great technology in them and are growing but need investment and need to be turbocharged – those are businesses that we want to buy. We’re not going to do

other and giving lots of independent views of the customers and providing little ability to stitch propositions together and to do end-to-end services,” Guy says.

“There was no account management, very weak sales capability, and therefore despite brilliant financials and great technology, it was difficult for the business to grow. My job has been about connecting all of that capability together.”

But he’s confident that much of the organisational work has been done and Equiniti is now working on products for corporates that allow a complete view of reward to an employee within a company.

Guy says: “We can integrate and federate the systems of loads of other sub-providers. We could show your core salary, the value of your share plans, the value of your investments, the value of your pension, the value of your flex benefits all together.

“There’s a whole new market of investors who don’t want to go to a sleepy, oak-panelled drawing room to buy shares” hundreds of deals a year, but maybe four or five very high-quality technology deals.”

Growing this way presents its own challenges. Communication and a common ownership of the customer across all of the business is vital to success. “To begin with, there were lots of little sub-businesses not talking to each

“With this kind of thinking, we could actually do so much more. We could pull together a total view of an individual’s wealth with investments, liabilities, cash, employment – a complete view of their financial universe. There’s huge power in productising that, because if you know the full extent of an individual’s financial universe, you can start to match products to them.

“The world is just on the tipping point where we can do 100 times more with the amount of data that exists. It’s incredibly powerful. So what I’m trying to do is get our company positioned to be able to take advantage of these things.

“We’re at just the right part of the macroeconomic cycle, just when interest rates are starting to turn, just when corporate activity is starting to increase, just when the markets are open for IPOs, just when equity is starting to come back. We’re game-ready, at the time the game is starting. We’re going at 100mph, but we’re doing it in third gear.

Now I want to get into fifth gear and really get going.”

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MEMBER ENGAGEMENT

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uto-enrolment has transformed the workplace savings environment.

Millions of employees have now been enrolled into pensions and as part of this, it was anticipated that many employers would seek to minimise unnecessary communication with members. Instead, they would build robust, default fund arrangements that would seek to achieve the best possible outcome for as many people as possible.

The regulator doesn’t see things in the same way and the problems of pensions liberation, pot follows member and the adoption of auto-enrolment make engagement absolutely essential.

However, the real game changer was the radical reform introduced by the Chancellor in the March 2014 budget.

As a result of the Chancellor’s surprise announcement, pension schemes will no longer be able to rely on simplistic forms of communication at specific times of a member’s life. But engagement is a priority and finding a way to communicate that promotes engagement is a challenge.

ENGAGEME CHALLENG Pádraig Floyd on why engaging with customers is a concern for pensions companies, who are now turning to the 21st century for help

21st-century tech

The last 20 years has seen technology transform the way we communicate.

Personal computers gave way to the internet, which has been revolutionised by faster broadband speeds. We now watch TV, consume goods and interact with friends, family and organisations differently, thanks to the development of smart devices such as smartphones and tablets.

Smartphones have changed our world.

A 2013 survey by Deloitte showed that 75% of UK citizens have a smartphone, while tablet ownership sits at roughly 60%. And if you own one hand-held device, you’re likely to have more of them, with 49% of households reported to have six or more smartphones, tablets or PCs. Video is growing and a number of consumers are choosing online video content over TV, which means organisations must have engaging content in this area. If they have the right content, consumers will engage with it regardless

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of whether it is a pension scheme or a desirable consumer good.

This is an important lesson for those in the pensions industry to heed. Member engagement is expensive and often reaps little by way of reward. The industry must find a way to attract the increasingly discerning, connected individual.

Out with the old, in with the new

The trouble with pensions is processes are siloed. That includes communication, preventing true interaction and interconnectivity.

Each individual absorbs information in a different way. Having information available in different forms – textual, graphical, audio or video – offers a member the opportunity to choose their preferred medium. But the industry needs to do more.

The pensions industry offers multiple formats, but then also offers – and

encourages – employees and scheme members to access the information via multiple devices. If you consider the number of smartphone users in the UK, and the fact that 25% of these consumers are only accessing the internet via mobile devices, it makes sense to invest more in this area, as it is likely to yield the highest level of engagement.

An audience of one

User-generated content is very powerful across social media and can greatly assist schemes in engaging with members.

On a more fundamental basis, using big data – a technique favoured by large retailers and being adopted in banking – will help in increasing engagement.

Big data delivers an aggregated impression of the behaviour of a specific group, in this case, scheme members.

Each client or member is an individual,

ENT GE GETTY IMAGES

so the macro shifts in behaviour influenced by key life events, benefit statements or even government policy can be observed and that analysis used to predict future behaviour.

This also allows the scheme to create content the member can interact with and make it available to them before they even realise they want it.

Adopting this approach is likely to generate much better results. Instead of delivering an advertising campaign during a major TV event aimed at the maximum number of consumers, you deliver a personalised message to the member’s smart device. They are far more likely to engage with something that is targeted at them directly rather than the mass market.

This is a very powerful means of delivery and why senior execs at NatWest have said their largest branch is no longer bricks and mortar, but the one accessed

Having information available in different forms – textual, graphical, audio or video – offers a member the opportunity to choose their preferred medium.

But the industry needs to do more.

by smartphones via their banking app.

Cloud-based software solutions allow businesses to develop and deliver native apps in the timely and cost-efficient manner the client–server paradigm could only dream of. The pensions industry is going to have to embrace this branch of technology if it is going to boost engagement.

As with business, schemes that exploit the opportunities of new technology will be better placed to satisfy members’ demands, and also the ever-increasing requirements of the regulator.

Equiniti has written a paper on member engagement, which will be published in January.

For more information or to request a copy on publication, please contact marketing@equiniti.com

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TECHNOLOGY TIMELINE

WE’VE COME A LONG WAY Today’s outstanding technologies are often the culmination of remarkable technological visions that stretch back decades.

EQ here charts three inventions with proud pasts and bright futures

Automatic speech recognition

Wearable technology

Data storage

1880s – Alexander Graham Bell establishes the Volta Laboratory Association, an electro-acoustic research facility.

They create the Volta Gramophone and envision it primarily as a business tool able to assist dictation.

1960s – Michael Thorp’s Roulette-Computer, a discreet device worn on the body, capable of beating roulette, is launched. It consists of twelve transistors, toe switches and an earpiece, and alerts its operator as to which octant the ball will fall in during a game of roulette, thus directing bets.

1890s – Statistician Herman Hollerith develops the first computational data storage – the punch-card. Perforated cards are fed into a tabulation machine, and brass rods create electrical currents where they meet, thus providing automatic data analysis.

Work on the 1880 census is ten times faster than manual data handling.

IMAGES: WIKIMEDIA COMMONS, IBM, GETTY, MIT MUSEUM

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1950s – Bell Labs realise the potential of computers in recognising human speech.

They develop ‘Audrey’, the first ever speech recognition system capable of recognising the numbers 1–10 in English.

1960s – IBM releases the Shoebox speech recognition device. With a vocabulary of 16 words it can carry out basic mathematical functions. It paves the way for commercially applicable speech recognition systems.

1970s – Portable calculators and digital watches combine to make a calculator watch. It’s a brief heyday, but it foreshadows the future trend of wearable data-handling devices.

1950s – IBM releases the 305 RAMAC, the world’s first hard drive. It has 5MB of storage space, weighs less than 1 tonne and costs $35,000 to rent.

1980s – Steve Mann begins his pioneering research into wearable computational photography. His earliest devices are cumbersome but users’ senses are enhanced by the presentation of relevant digital information.

1970s – Floppy disks enter the market, signalling the advent of compact data storage. The first disks measure 8 inches and have the equivalent capacity of some 3,000 punch-cards.

The Future

1990s – The development of faster computer processing and larger memory results in more efficient and accurate speech recognition systems.

Continuous speech to text recognition software enters the consumer market courtesy of Dragon Systems which is still releasing updated software today.

2010s – Smartphones are now commonplace and often come with integral speech recognition software, providing cloud storage systems with ever more data. This enables the development of increasingly sophisticated statistical models which lead to more powerful speech recognition systems.

Systems have progressed to having vocabularies in excess of several billion words and are not just capable of recognising human speech but actually able to respond to it. The challenge facing developers today is the achievement of 100% accurate universal systems able to both recognise and understand multiple languages.

The Future 2000s – Bluetooth headsets are introduced. Users can communicate with others effortlessly and wirelessly whilst carrying out other tasks.

Later incorporated into laptops, printers, keyboards and cars.

1990s – The development of flash memory drives allows for quick, lightweight, affordable and efficient data storage/transferral. They far exceed the capabilities of both floppy disks and compact disks.

2012 – Google Glass makes its debut, signalling the advent of next-generation wearable technology.

More discreet and powerful, its potential application is massive. Users can command their devices to make conference calls, assist in presentations, take photos, provide visual mapping, give translations and stream live information feeds.

2000s – As modern data banks increase, more and more people and corporations turn to cloud storage. Cloud systems provide largescale, off-site stores that enable instant access to data held within them from any internetready device.

Today, wearable technology exists in the corporate landscape as a merger between technology and everyday life, providing companies with more information about employees and customers, and generating more intimate corporate environments. Wearable technology will effectively allow customers to wear their banks and pay for goods by simply looking at QR codes. For companies, it could personalise customer interaction, regulate corporate wellness and streamline processes.

The Future

The future will see the creation of increasingly powerful storage devices capable of processing and containing unprecedentedly large quantities of data. Mastering quantum computing looks to be the next significant step towards supporting such a scenario, a vastly complex computing system that aims to harness the power of atoms and molecules in order to create quantum memory.

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PEOPLESPACE

POWER TO THE PEOPLE

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Equiniti is moving employee portals into the 21st century with PeopleSpace

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n a world where everything is going digital and online, the flexible benefits space is no different.

Customers want more control over how and when they can access their information, and Equiniti is staying one step ahead of its competitors by providing this level of service to customers.

“We made a number of changes to our offering around 18 months ago; we upgraded our system, we recruited experts in the field and as a result we have seen huge growth in the number of employees using our systems for Flexible Benefits,” explains Stuart Bennett, Head of Flex and Online Benefits.

To continue to improve its offering to customers, Equiniti recently launched PeopleSpace, a one-of-a-kind employee portal that uses industry-leading technology that allows Equiniti’s customers to give their employees greater access and control over their benefits. “PeopleSpace links all of our portals together,” Stuart explains. “It puts our pensions administration, flexible benefits portal and employee share schemes in the one place, which doesn’t just save employees time, but is also much more user-friendly.”

PeopleSpace is a revolutionary product in the Employee Benefits market, and has a number of benefits for employees, as Stuart explains: “An employee can log onto the PeopleSpace homepage and see what their pension is worth, how much they get from a flexible benefits perspective and they can see the value of their shares. All of this information is real time, so anyone using the service gets an entirely accurate picture of their package.

Additionally, employees can navigate

straight through to, for example, their pension administration system, without having to log in to a third-party site.”

The introduction of PeopleSpace was down to requests from Equiniti’s customers: “A number of our clients started asking us to provide them with data, so that they could then feed that into another system, where the information would eventually be displayed on a benefits portal. It made sense for us to create something that would provide our clients with this information, without them having to go to another provider.”

There are huge benefits in this approach for both Equiniti’s clients

are pulled into one report, rather than multiple. And there’s also the in-depth analysis side, so clients are able to see what their employees are spending across pensions, share schemes and flexible benefits. This allows clients to understand which benefits areas their employees are engaging in, and which they are not,” Stuart says.

Equiniti is the only provider of this service in the field, which has been developed with today’s technological society in mind. “PeopleSpace takes into account that you might not always use it at your desk. It is mobile-optimised, so it can be accessed – and used to its full potential – from desktop, smartphone or tablet,” Stuart explains.

In order for clients to embed PeopleSpace within their organisations, it can be fully branded to any client’s requirements. “We have the technological capability to transform the look and feel of PeopleSpace to correspond with a client’s branding requirements,” says Stuart.

“That goes as far as the name. PeopleSpace is what we refer to, but clients can change that to a name that better fits their needs. It is very adaptable.”

Equiniti has developed PeopleSpace in a way that allows clients to add on additional features as and when required.

“We have modulised PeopleSpace so that clients can start with a basic model and add on additional features if or when they feel they need them. It has been built with the client’s needs in mind, and that has resulted in an innovative and unique product, that we are confident our clients will reap great benefits from.”

“We have modulised PeopleSpace so that clients can start with a basic model and add on additional features if or when they feel they need them”

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and their employees: “Employees get a joined-up approach by using PeopleSpace as they can both view and transact on their benefits. From a client’s perspective, it ensures that in having everything managed by Equiniti, they will be assured a consistent approach and they are providing a greater service for their employees.”

A further benefit for clients lies in the data that the technology is able to provide them with: “Through PeopleSpace, there is no need for excessive reporting – valuable data, such as statistics and KPIs

For more information or to book a demo please contact Stuart Bennett on 01903 833084 or email stuart.bennett@equiniti.com

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DATA SECURITY

CYBER CYCLONE Businesses must take more action to protect themselves against computer viruses as our growing dependence on technology puts us all at greater risk

T

echnology is now integrated into every area of our lives.

For some, it’s hard to imagine a life without it, as we depend on technology to pay our bills, do our shopping and talk to our friends and family: “Modern society cannot function without technology,” says David Chadwick, Professor of Information Systems Security at the University of Kent. “We are totally dependent on information systems. They are in our transport systems, they control our gas and electricity supplies, and the supermarket shelves would be empty without them. We cannot do business without electronic data transfer and the banks would not be able to transfer money without it.”

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This increasing dependency on technology has made it easier for viruses to infiltrate our systems: “Because computer software is so complex, with millions of different pathways through the code, it is impossible to test all of them before the software is released in live computer systems. This means that all of our computers contain thousands of bugs, but they don’t usually cause us problems as they are lying dormant,” explains Professor Chadwick. “But these bugs can be exploited in order to plant viruses in your computer. So it is important to keep your software up to date, as the suppliers are continually fixing these bugs. One of the ways attackers try to plant viruses is by playing on our human weaknesses. They exploit

our desire to share information by planting viruses in emails and on memory sticks so that we will pass them around.

“They also play on our humanity by sending carefully crafted messages that appear to be genuine; they try to appeal to our sympathetic side by telling us hard-up stories and they also use money as a motivator to infiltrate people’s computers,” he says. “Once you read these emails and their attachments, you risk being infected.”

To those in the know, these methods are fairly transparent and a mixture of good online practice and common sense should be enough to protect individuals from this sort of approach. But as you might expect, viruses and those administering them are becoming more

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sophisticated, as Professor Chadwick explains: “In 2013 when Yahoo users went to read their email, Yahoo displayed an advert that had a one-pixel picture – invisible to the human eye – that browsers would automatically download.

This download was actually malware that searched for weaknesses in your computer system, found them and then uploaded a virus. In this case, the only mistake a Yahoo user would have had to make in order to become infected was to not have up-to-date software on their PC.” The motivations behind cyber security crime largely depend on who is behind the crime in the first place and whether their motives are financial or an attempt to gather sensitive

information. Regardless, there are serious ramifications for businesses: “The ramifications really depend on what your business is and what virus you have fallen victim to, but I would expect at the very least, it will be costly in terms of time and effort to clean up the mess afterwards.

“In the absolute worst-case scenario, it could be the death of your business.

There are companies that have gone out of business because they have been hacked or hit by malware, which caused them a loss of critical information, customer confidence or excessive downtime, which they could not recover from,” Professor Chadwick says.

There are ways that businesses can minimise potential cyber security threats: “The simplest rule is to always keep

your software up to date,” Professor Chadwick advises. “Install all the latest patches immediately and update your virus software daily. Make your company harder to hack than the one next door and then they will be the victim and not you.

“Of course there are other essential steps to take, like educating and training your staff and either employing a cyber security expert – or paying for some external consultancy and advice – to ensure that your systems are securely configured.

“Good online practice is generally enough for the vast majority of businesses to remain virus free. It’s the most cost-effective way to stay ahead of your competitors.”

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:: THE JOURNEY OF AN IPO

IPOs can be a very challenging time for a business, but Equiniti can help every step of the way.

32 > EQ | winter 2015

Pre IPO Corporate Re-organisation Businesses should receive advice on corporate governance, housekeeping and company secretarial support.

Investor Relations Businesses should use peer group analysis and prepare a prospectus to target investors.

Employee Incentivisation Businesses should consider which employee and executive schemes to put in place, for example SAYE and SIP.

INITIAL PUBLIC OFFERINGS

CHANGING FORTUNES

I

The IPO market has sprung back into life with a wealth of businesses listing on the London Stock Exchange

n the first three quarters of 2014, there were more than 100 Initial Public Offerings (IPOs), raising around £16 billion in funds. It is safe to say that the IPO market has finally jolted back to life, with activity up significantly on 2013, not to mention previous years.

IPOs are susceptible to market conditions, and it is almost inevitable that if international stock markets are doing poorly, the IPO market will suffer as a result. After years of a faltering economy, there has been a clear recovery in the UK and thus, the IPO market. The London exchanges have outperformed fellow European markets as doubts over the recovery of the Eurozone continue to persist. Indeed, London is only second to New York in terms of capital raised in the first nine months of 2014.

“The equity market is one of the main drivers of IPO activity and the global recession had a huge impact on all IPO markets. Equity markets have started recovering from the crisis and that is reflected in the IPO market,” explains Dr Ufuk Güçbilmez, Lecturer in Accounting and Finance at the University of Edinburgh and co-author of ‘IPO waves and hot markets in the UK’ published in Handbook of Research on IPOs (Edward Elgar). “The improvement of economic conditions means that we have seen an appetite for smaller firms on behalf of investors. Typically IPO firms are relatively small, so if investors have an appetite for such firms, then it helps the IPO market. The UK market has definitely been re-energised this year.”

Investor confidence is at a high as is the quality of assets coming to market in the UK. Equiniti, which provides expert advice

IPO Launch The Launch Businesses can get assistance with regulatory and legal documentation and IPO processes.

and support to companies as they take their first steps to becoming public, has recently assisted on a number of particularly successful IPOs, including the Royal Mail and JUST EAT, which entered the High Growth Segment of the LSE. Equiniti has dealt with a third of IPOs that have come to market in 2014 as well as supporting 66% of IPOs in the areas of Registration Services, Employee Services, Investor Analytics and Company Secretarial Services.

In addition to retailers and technology firms, Dr Güçbilmez also notes that there has been a trend towards media companies coming to market. “I think it maybe follows the US because there were quite a few social media IPOs there including Facebook, Twitter, LinkedIn – they’ve all gone public,” he says. “This is a new industry because you wouldn’t get this sort of firm in the past so it’s opened up the market. We’ve also had the usual suspects, such as financial firms

Post IPO Shareholder Analysis Businesses should set up an investor database and use market surveillance and real-time online data to track shareholder activity.

Registration Businesses should put a registrar in place to run AGM management, dividend payments and shareholder communications.

Employee Benefit Solutions Employee and executive share plans should then be launched and Equiniti can help with the management and trading of these.

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INITIAL PUBLIC OFFERINGS and tech companies. London is one of the strongest financial centres in the world, so it attracts IPOs of banks and trusts.”

The UK saw a solid pipeline in 2014, but the first quarter of 2015 may be weaker. “In 2014, the FTSE All-Share didn’t do so well and this may have a knock-on effect on the IPO market in 2015,” says Dr Güçbilmez. “It might be a slow start to 2015 for two reasons: first quarters are seasonally a bit weaker, and secondly, this year’s stock market performance hasn’t been great. But if there is strong performance in FTSE All-Share or a similar index, it can quickly change. It relates to the resilience of IPO markets to market conditions. If they are strong, you are looking at a strong IPO market as well.”

As such, market conditions, including the seasonality of the IPO market, can determine the right time for a company to float, although for larger companies it is less of an issue. “For smaller companies, it depends on the appetite of investors,” says Dr Güçbilmez. “It’s still typical for technology firms to go public when they are not profitable because they are essentially selling a prospect. But if a small business is considering going public, they must ensure there is enough appetite in the market, and they are either profitable or close to being profitable.”

Activity on the IPO market today is still not on a par with the exceptionally lucrative years of 2000 and 2004 when around 300 companies floated; yet 2014 was a welcome change of pace in comparison to preceding years and perhaps it intimates what is to come in the years ahead.

“If you look at the past 20 years, there were two very good periods,” says Dr Güçbilmez. “One was in 2000 before the bubble burst. It was mainly tech firms that went public. Another good period was from 2004–06 when there were about 200–300 IPOs per year. This time it was more natural resources companies, so for example oil and mining companies, coming to market. At the moment, the IPO market is not as hot as those years, but if you compare it with 2009 and 2010, it is looking promising.”

WHAT NEXT? Chris Stamp, Director of Prism Cosec, tells EQ what a business should expect after an IPO When we speak with management from companies which are contemplating an IPO about life after admission, there are two key words that we mention – compliance and communication.

Whilst the central figures in the IPO process will be the Chief Executive and Chief Financial Officer, the managers responsible for compliance (usually the General Counsel or Company Secretary) and communications (Head of Investor Relations) will not be far behind in terms of workload and

For more information please contact Chris Stamp on +44 (0) 20 3008 6446 or Chris.

Stamp@prismcosec.com

responsibility. The board of directors, which itself is usually going through significant change in the run-up to an IPO, will of course be ultimately responsible for compliance and communications but for the management teams, these two areas cover the biggest area of change between the pre- and post-IPO environments.

Before the IPO goes ahead, the advisers, particularly the Sponsor and the company’s lawyers, will ensure that the Prospectus complies with all of the relevant regulations and that the Board and management are clear on their legal and regulatory responsibilities.

The key, however, is to ensure that procedures and processes are established to ensure that the issuer continues to comply with those requirements. This

has been demonstrated clearly in recent FCA notices and judgments which have focused on the lack of process when implementing such things as policies on inside information and share dealing by directors.

When a business goes public, it needs to be more transparent than ever before. Reporting, which particularly at year-end is governed by significant accounting, legal and disclosure requirements, has to be well executed, and the key here is to plan early and clearly. For AGMs, it is best to be prepared for all eventualities and in particular, a large shareholder base needs good event management.

The Board must always have a good understanding of who their stakeholders are and what their expectations are. It’s vital to have an open dialogue with investors and you should find as many opportunities as possible to interact with them and keep them informed, for example use conference calls, webcasts and site visits. It is also important to establish a specialised Investor Relations website with financial information, press releases, management and board information, and disclosure policy.

:: THE JOURNEY OF AN IPO

Post IPO Company Secretarial Company secretarial support needs to be put in place to assist with board governance and policies, annual reports and disclosures, and compliance procedures.

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Corporate Actions Equiniti can provide support for capital structure re-organisations, including Secondary Fund Raisings.

HR/Process Outsourcing Businesses may consider outsourcing their payroll management, contact centre, pensions admin, customer services and flexible benefits.

DECODING JOB TITLES

Technology has drastically changed the way we work and it’s created a raft of new career opportunities to cater to our digitally focused world. EQ finds out more about three thoroughly modern job titles, from the professionals who are doing them

COMMUNITY WHAT …?

ey cer (CTO) rd Gr ffi Richaechnology O on Security T t f a e i m r i Ch ief Info h C d n a n (CISO) Officer ompensatio C o r Cu

s CTO, I’m responsible for the underlying technical platforms that our business operates on.

This includes management of the office infrastructure for all employees, and the data centre infrastructure on which our commercial softwareas-a-service (SaaS) solution runs. This covers physical and virtual hardware and all related software. And as CISO, I am responsible for the confidentiality, integrity and availability of our systems and associated data.

Security is of utmost importance and as CISO I am responsible for ensuring we have an overall program in place to safeguard the data we manage on behalf of our clients, while fulfilling our legal obligations under the terms of the UK Data Processing Act. When people ask me what I do, I often need to elaborate further on the CISO role.

However, this position is becoming more prevalent and may soon become a legal and regulatory required role given impending EU legislation changes around data security and privacy.

Being a Certified Information Systems Security Professional (CISSP) – there are only about 90,000 people certified worldwide – helps greatly, providing clients with the assurance that, through my experience, knowledge and training, our organisation is constantly striving to ensure best practice is applied.

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nnor John Co ter s a Scrum M erts Equal Exp

y role as a Scrum Master differs from a traditional project manager in that I facilitate the aims of the project by ensuring that all progress barriers are mitigated, external interference is minimised and that the core agile principles of collaboration, prioritisation, team accountability and visibility are followed and built on by the team.

On a daily basis, I coordinate the team stand up, collate, prioritise and action the removal of reported impediments, and plan for the other major Scrum artefacts of Sprint Review, Demo, Retrospective and Next-Sprint Planning. This all adds great value to any organisation that has embarked on the journey from more traditional development methods to an agile approach.

If I talk to someone who isn’t from an IT background, the initial assumption is that my role is related to rugby, as most people are familiar with this concept of a scrum.

In fact, this helps as a starting point in explaining the role. A rugby team is multifunctional in nature but works as a whole to achieve success. In the same way, a Scrum team is multifunctional and goal driven and stops frequently (end of Sprint/ Iteration) to appraise, re-set and then re-engage to achieve the stated end result.

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Carla Bradman Community Manager Paramount Properties

s a Community Manager, I create and curate content in order to engage with our online communities and build lasting relationships. Community Managers are the digital face of the brand and are responsible for protecting a company’s reputation online as well as delivering marketing messages.

There’s now a better understanding of my role, but there was a time when people presumed that all I did was post on Facebook and Twitter all day.

Community Managers create content, write targeted copy for different mediums, determine metrics, collect and analyse large amounts of data, research, provide first instance customer service response, ‘listen’ to conversations and identify PR opportunities.

Naturally you need to have a good understanding of social networks, but community management is as much about meeting long-term goals as it is about achieving short-term success.

Additionally while most relationships with brand advocates are identified online, strong relationships are built through a combination of online and offline experiences.

Although most of my time is spent on my laptop, tablet or smartphone, I do spend time meeting our community offline, often at events (which you’ll probably find me live tweeting from).

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Equiniti is making the future today

Our passion is making complex things simple, for some of the best-known brands and public sector organisations in the UK. Find out about Equiniti’s smart solutions at equiniti.com