How Aware Are Your Board Members about Cyber Risks?

 How protected from cybersecurity threats is your business? 

How prepared is your company to combat an unexpected data breach? 

In case of an inevitable the attack, would you be able to spring back from the loss of customer and hampered reputation? 

With critical data and sensitive information out there today, there's a lot at stake for organizations of all sizes. Cyber risk has gained the infamy of a pressing business security issue in the past few years. Cyber-attacks are increasingly feared by businesses for their pervasiveness and a lack of a complete understanding of the exact nature of cyber risks. This has prompted companies to seek advanced cyber risk assessment tools.  

Today, time requires companies to develop an in-house holistic assessment tool that considers technical analysis, governance, culture, and the financial impact of adverse cyber events. This should be in conjunction with the present layers of security provided by third party companies such as credit information companies providing credit information report. Such assessments should become a necessary tool for corporate directors who could use them to understand their organization’s exposure to technological vulnerabilities. 

 

What exactly is a cyber risk assessment?

At a surface level understanding, cyber risk assessments show how well a company is prepared to tackle cyber attacks. It identifies the information assets that could be affected by a cyberattack (such as hardware, systems, laptops, customer data, and intellectual property) and the risks that could affect those assets. These assessments also measure how well a company has prepared itself to recover from such attacks called cyber resilience. Cyber attacks can come in the form of fraudulent bank wires, and breaches of customer privacy, all of which create lasting reputational damage for the victim company.  

 

In making cyber risk assessments, mainly the chief information security officers and the team have tended to focus on the number of previous attacks, their impact, and how quickly they were addressed. Their objective has mostly been to take cognizance of the known defenses. But this approach often isolates cybersecurity decisions from the business, they are meant to serve and so may reflect a narrower view of risk. Moreover, technical reports don’t adequately capture attributes such as governance, culture, decision-making practices, or wider treatment of a company’s cyber risk profile and appetite, all of which board directors and business executives need to understand if they expect to make informed decisions about whether to allocate capital to improve cyber defenses instead of investing in other areas of the business

 

How Do You Perform Cyber Risk Assessment? 

For an assessment to be useful to directors in a strategic capacity, the board needs to be clear about its requirements - which means it needs to know what to ask for. They should ask for a comprehensive assessment that moves beyond the technical details and that includes both an outside and inside perspective. Here are 3 steps to go about it

 

1. Identify System Weaknesses & Define Risk Appetite

The first thing businesses should do is determine their risk appetite with regard to cyber-loss events just as it does with any other risk. Introspection should be done on parameters such as customers’ expectations and the approach of peer companies to these risks. By forming a deep understanding of your weaknesses and potential cybersecurity threats, we're better able to set expectations from a cyber risk assessment system.

 

2.  Improve Your Network Strengths

Doing a full evaluation of your current IT or tech department is also incredibly important. Having a complete, holistic view of your business' security strengths allows us to come up with the best solutions for strengthening them. 

 

3.  Develop a culture of cybersecurity and resilience

While there are currently varying approaches to measuring cyber risk, the right outcome always starts with the right culture. No security assessment can be finalized without a robust security roadmap in place. 

 

‘Skyminder’ by CRIF is a solution that provides a cyber risk assessment report, called KYND, and empowers business managers, owners, and professionals to easily assess cyber risk related to business. It highlights the vulnerability and acts as a security buffer between business deals. The KYND cyber risk report is applicable to any and all businesses belonging to any industry. The report is an easy, clear, and concise read and does not require an IT expert to understand. For more details on how you can secure your business from cyber risk, Contact CRIF, today. CRIF is one of the four RBI authorized credit information companies in India.

Credit Risk and Its Significance in Business

If you have ever lent money to someone, you know the apprehension that comes with lending, considering the uncertainty of receiving your money back. Even though the borrower is someone you know well, you will at least be a little skeptical before you hand them over your sweat & blood. Nevertheless, when you go ahead and lend the money for trust’s sake, you have now exposed yourself to what is called a ‘credit risk’.

On a broader scale, many organizations are constantly exposing themselves to credit risk. If you are a supplier of goods, you may have to give your customer a 30-day or 60-day credit period for payment. Conversely, you may have to make the advance payment to your suppliers while still waiting for your supplies. Then there are banks & financial institutions whose entire business is to lend money for a profit - in which case - every transaction is a credit risk. Late payments or defaults in payment can lead to loss of business, increased collection cost and interruption of cash flow. 

Financial institutions, therefore, rely on credit risk models to determine the credit risk of their borrowers. Credit risk modelling refers to the process of using data models to find out probability of the borrower defaulting on the loan and its impact in case of default. It guides their decisions on whether or not to sanction a loan as well as their interest rates.

CRIF’s expertise in credit risk assessment

CRIF provides a full portfolio of credit risk modelling tools and expertise, empowering business analysts, from beginners to advanced modelers, to develop, build, test, deploy and manage predictive models. Credit risk assessment enables an organization to collect relevant data about the business partner before entering into a deal with them. Credit risk can be assessed using parameters such as financial ratios, credit scores, credit ratings, credit information report or business information reports. Risk assessment has to be a continuous process to be relevant and effective. It is best done by external auditors, such as CRIF, who are experts in this field and come without any bias.

The significance of credit score in credit risk assessment

The credit score is a numerical measure of Credit Risk. It is calculated based on various parameters such as past payment history, loans taken, spending ratio, etc. Credit scores are allotted by special organizations called the credit information companies. Whenever lenders are requested for a loan, they perform a credit check on the borrower to find out their credit score before lending the loan. There are 4 such companies in India empowered by the RBI to assign a score. Every bureau has their own unique credit scoring model which is the statistical analysis used to evaluate your creditworthiness. These agencies select statistical characteristics found in a person’s credit payment patterns, analyze them and come up with a credit score. All these factors help identify the financial character of a person or a business. Accordingly, there are two types of credit scores, a personal credit score - which ranges from 300 to 900 in India, with a score above 650 considered good and financially trustworthy. If a person's credit score is under 650, many loan lenders abstain from lending them or charge a higher interest rate. A lender’s credit analysis may take into account other factors such as available investments, collateral property, income or cash on hand. A credit score for business loan is called the Business Credit Score which is similar to personal except that the entity whose score is being calculated here is an organization. The scores are calculated considering the financial history of the organization.

How do corporates asses risk using business Information reports?

For a business, there are two main doors from which risks can enter, the supplier and the customer. CRIF provides business information report for businesses, to help companies analyze the creditworthiness and legitimacy of the business partner. BIR provides an in-depth profile of a company, including financial statements, business trends, history of business, ownership details, operational information, and details on related firms and any special events that occurred in the past involving company management. CRIF also provides a risk indicator and an indicative credit limit to support business managers with their decision. These reports are not just limited to India but include many countries worldwide. You can start your risk assessment by checking your own or your business credit score at CRIF HighMark.

How Can Collections Management System Help Banks?

Credit Collections Management Software (CCM) is a suite of integrated business applications that extend a bank’s accounts receivable and accounting system to facilitate credit management, billing and invoicing, remittance processing, dispute management, and collections processes. A credit collections management software typically supports credit facilitation, billing and invoicing, remittance processing, collections management, dispute resolution, and credit risk assessment.

Banks spend a huge share of their income every year on CRM & ERP software, looked upon with the primary motive of getting more leads and closing more deals. But one critical part of the entire process, which is debt/credit collection, is conveniently sidelined. This cumbersome job of collecting your own money requires a lot of client chasings along with reminders and callbacks, let alone the host of clerical tasks that come with data management. Non-specialised software is not very efficient in handling such tasks. The collections module in your existing system may still require you to print ageing reports and manage data in spreadsheets. Precisely, a dedicated ‘collections management’ software is what banks need to take care of their debt collection.

With the increasing volume of accounts and growing complexity in client services, banks and financial institutes are demanding more sophisticated and advanced processes which can run credit risk analytics before lending and manage loans and collections for them. In short, banks need an accounts receivable collection software to save time spent on administrative tasks and automate redundant tasks so they can focus on what matters most, collection! Here are a few ways in which collection software can greatly help.

Faster Repayments

It is estimated that collection management software can speed up the process of recovery by around 23% as compared to the manual process. Thus, theoretically, what took 60 days to collect would require less than 45 days. This gives you 15 days worth more of interest.

Predicting Cash Inflow

Using predictive analytics in banking, the outcome of lending can become more predictable. It can forecast what might happen in the future with an acceptable level of reliability and incorporates what-if scenarios and risk assessment. CRIF provides a full portfolio of credit risk modelling tools and expertise, empowering business analysts to develop, build, test, deploy and manage predictive models.

Reduce bad debt and Focus on most profitable customers

Companies using accounts receivable collection management software systems typically reduce bad debt by 15-25% because they identify and resolve disputes sooner, preventing them from ripening to the point where they become uncollectable. This software can let you identify unused credit lines and work with lower risk customers to help them buy more products and services. CRIF’s scoring models such as application scorecard, collections scorecard and behavioural scorecard , can predict the probability of a client behaving in a certain way, predict their profitability and side out risky customers. This can help banks focus their forces on specific clients and develop a customised collections strategy for each type.

A Collections Management solution comprehensively addresses the needs of Financial Institutions that require a centralized & automated system for managing their collection operations and in the process, allow Financial Institutions to enhance their customer relationships, facilitating future sales opportunities.

6 Ways Identity Thieves Get Hold of Your Data & How to Dodge Them

Identity thieves are the ones who steal personal or financial information of another person and use it to make transactions or purchases. Acts committed under identity theft are categorised as identity fraud. A variant of identity theft is application fraud where an applicant uses somebody else’s stolen identity to make an application for an account, policy, service or insurance claim. While identity thefts can be conducted in many ways, the proliferation of the internet and smartphones today has made way for more high-tech fraud methods. Here are some ‘cyber’ ways in which your identity may be stolen by the thieves.

1. Data Infringements

A data breach is a security conflict wherein personal or classified information is accessed without authorization of the owner. In terms of finance, data breaches can include stealing full names, credit card numbers, passwords, credentials for net banking, etc. Such data breaches can harm businesses and consumers particularly having multiple accounts and businesses.

2. Wi-Fi riders

If you are one of those who enjoy free Wi-Fi at the station or a cafe saving on a few bucks. Well, to let you know, hackers may be able to "eavesdrop" on your connection in such unprotected networks.

3. Credit Card Fraud

You are looking through your credit account statement and you find a purchase of Rs. 5,000 which you can’t recall of - could be credit card fraud! This is the most direct form of theft where the thief gains access to your credit card information and uses it for their own expenses or to take out cash advances using your account.  In many cases, the thief may not even need to steal your physical credit card, only the information such as card number and PIN are enough. Here are some first-hand measures to avoid being robbed:

●        Never disclose your credit card number to anyone and never enter your card details on any unknown website.

●        Avoid handing over your card to the waiter at the restaurant and insist on bringing the machine to the table.

●        Avoid Card skimming by visiting better-known ATMs for withdrawing money

4. Unsecure Browsing

It is not that difficult to identify a malicious website when you are equipped with some internet basics and a bit of common sense. Here are some tips:

●        A URL beginning with an ‘https:’ and/or having a green lock symbol to the left of the browser window indicates a secure and protected website.

●        Avoid clicking on a link embedded in an email unless specified by a known sender.

●        A shady looking website with weird content and spelling mistakes is an instant giveaway to being a fraud

5. Phishing and Spam Attacks

You may have seen emails in your inbox bearing the name of your bank. When you open those emails, you might be prompted towards a certain ‘call to action’ redirecting you to a website on the pretext of PAN verification, KYC or any other identity verification. This website (which may look like it belongs to the bank) may ask you of your account details. Stop right there, could be a trap! When you enter your details there, consider them compromised. The best way to identify real from fake is from certain telltale signs. For example, if you get an email from a sender named ‘ICICI’, check the domain (eg:<icici@icici.com>). If it’s a legitimate mail, the domain will belong to the original website, else it will be something like <icici@abc.com>, which is clearly fake as banks won’t send via a random domain.

6. Trading on the Dark Web

This discreet area of the www is an underground hotbed of criminal activities mainly because it is not accessible by the search engines, making it incognito. This is the marketplace where all the stolen data such as your credit card number, name, etc. are assembled and sold by the hackers. The dark web has restricted access and only with certain browsers, in case you are wondering!

Once they have the information they are looking for, identity thieves can ruin your consumer credit score and the standing of other personal information. In order to avoid damage, it is essential you stay informed and alert, always!

3 Main Reasons to Monitor Your Business Information Reports

What is a Business Information Report (BIR)

Business information reports provide you with a wide range of credit data on your potential customers, partners, and suppliers. They allow you to research key business information of your clients and business partners such as contact details, sales figures, size, products/operations, credit summary, Uniform Commercial Code filings, fictitious business names, and payment and collections history. In addition, it contains information on judgments, tax liens, and bankruptcies.

Benefits of BIR

1. Manage Uncertainty and Risk in Business

Business information report consists of crucial details such as business registration, legal form, date when it came into existence, key owners, address, etc.  The business information report also provides details such as the submission of financial data, balance sheets, and ratios to evaluate financial strength.  All these details build an image of the business which can help you in your credit risk assessment.

2. Enable Better Credit Decision

To evaluate a business partner, the first aspect you need to check is their financial situation. You need to be sure of your partner’s creditworthiness to ascertain their ability to pay for the services received. Business Information report provides significant legal events in the timeline of your business partner such as changes that occurred in the past involving changes in the company management. Instability can reveal a few facets of the company. If the business has had significant or repeated defaults under their name, you may rethink before providing credit to them.

3. Monitor Company status

When Business information services are combined with a business credit report, it can open a whole new dimension. When it comes to your regular client, it is crucial to practice due diligence and monitor changes in the company situation that could affect your business. Keeping up to date can prevent critical events, such as a customer becoming bankrupt, or a supplier risking interruption in the production chain, a change of ownership, etc. Monitoring allows you to understand if a business partner has changed the company information.

CRIF Business Information Report

CRIF has developed a well-defined approach to business information using a scenario where decisions and risks are based on a complex and robust framework of value-added information, dynamically updated and revised. This means the creation of an ecosystem where data are linked to each other and can be transformed into information specific to different evaluation processes.

SkyMinder is the CRIF platform for Business information that enables the global market to access commercial risk data and take better business decisions on worldwide companies. CRIF’s SkyMinder business information reports enable you to:

·         Fetch business credit information report of businesses based in 230 listed countries

·         Make an efficient decision by referring the high-quality local data

·         Control Bad Debts and reduce collection costs

·         Gain better market insight by assessing your business partner’s risk level using credit rating and opinion.

·         Analyze the financial strength of a company by looking at their financial data, balance sheets, and profit & loss statements.

·         Stay updated on the financial status of a partner company

Visit the CRIF website to learn more about International Business Information services and address your security needs.

Becoming a loan guarantor? Things you should know before you become one

It is a little difficult to say no to your close relative or friend when they ask you to be their loan guarantor. Loan guarantors are not co-borrowers but guarantors who formally assure the bank or lending institutions that the borrower will repay the loan amount on time, abiding by the rules. The credit worthiness of a person allows one to be a loan guarantor, but it does not mean that the borrower's creditworthiness is being questioned, often it is a formality that needs to be followed as a part of Credit Risk Management in Banks, in case of a massive amount. It might be a risk at times as you can never be too sure of somebody's credit behaviour which is why always think before you say a yes and ensure nothing is at stake.

Below are a few questions that we will answer to help you decide if you want to be somebody's loan guarantor or not:

When should you say a Yes?

As we said, becoming somebody's loan guarantor depends on one's own discretion. One thing you should never forget to consider is the borrower's financial ability and capacity to repay the loan.

When should you say a No?

If you come to understand that the bank wants you to be a guarantor because they do not trust the borrower's financial capabilities, then take a closer look at the borrower's papers and credit history to avoid any financial distress on you.

Will your credit score be affected?

Credit Score plays a very crucial role when it comes to any kind of financial activity, even when you become a loan guarantor. While the borrower is expected to have the required credit score needed for personal loan, as a guarantor, your credit score is also at stake. Your credit score will be affected when there is a delay in paying the EMIs or any kind of default. The ratio in which your score is affected is influenced by the latest credit scoring model followed by the respective credit bureau. Before becoming a guarantor make sure your credit score is strong enough to take a hit if there is any irregularity in the repayment of the loan by the borrower.

Will your eligibility for loan get affected?

Becoming loan guarantor means you've increased your liability too. The lenders will then limit your loan amount or not give you a loan at all, so if you are sure that you wouldn't need to take a loan soon then say a yes to becoming a guarantor.

What will be the tenure of the loan?

Becoming a loan guarantor means you are tied to a loan till the time it is fully paid back, which also means it will be a liability. Make sure the loan tenure is not too long to avoid being deprived of any financial assistance you may need in the future.

What are the legal actions that can be taken by the bank against you?

You may have to pay the amount if the borrower goes absconding irrespective of the fact that you are not the co-borrower there will be legal actions taken against you too. It is mandatory to read and check every document that you sign while you become the guarantor.

Once you become a loan guarantor, it is not easy to withdraw. Keeping that in mind we have answered most of the questions that might come in your mind while agreeing to become the loan guarantor, making sure you take a decision after understanding every term and condition and it does not affect your finances negatively

Looking For A Loan To Buy Your Dream Car-Factors To Foresee Before You Apply For Loan

“We don't pray for the love we just pray for cars”

Buying a car with the latest features or choosing a swanky one can at times be heavy on our pockets despite having it all planned. Car loans are like the catalyst for buying our dream car. However, not everyone spends enough time researching and comparing car financing schemes.  If you are planning to buy a car that you have wished for then we have a list of things that should be on your checklist before you hop on to a decision or before you apply for a car loan, making things uncomplicated.

Choose your car wisely:

When you plan to take a car loan, make sure you choose your car wisely. A car that suits all your needs and requirements should be the deciding factors of the choice you make. Research about car category (Sedan/SUV/Hatchback) and fuel type (Petrol/Diesel/CNG). Choose the one which suits your budget as it is a big expenditure that might be affecting your finances for the upcoming months.

Credit History and Credit Score:

Your credit history and credit score are the deciding factors for your eligibility to get a car loan. Before you apply for a car loan, it is mandatory to make sure that one has a good credit history and fulfills all eligibility criteria. Banks approve or reject loan applications based on your entire financial standing, starting from your monthly salary to your ability to repay your debts to your credit activities.

So, the foremost step is to visit the website of an RBI-approved credit bureau in India like CRIF and check your credit-worthiness by downloading a free credit report. A higher score means a better chance of loan approval and lower will be the interest rates. One will have a greater probability of approval of the loan if he/she has a score above 700.

The Rate of Interest:

Different banks offer a different rate of interest and it is important to analyze and do a little research to get the best deal. Since the rate of interest can make a large difference in the final cost of the car you want to buy, make sure to choose a deal wisely and not just any prepackaged loan deal.

Down Payment:

Usually, 15% to 20% of the loan amount is the down payment amount that one must pay. Down payment works just like margin money for our loan needs. The higher the down payment is, the lower is the quantum of EMI one must pay every month.

Processing Fee:

Banks charge a minimum loan processing fee for all car loan requests. However, the final calculation of loan processing fee differs from bank to bank. While some banks have a flat loan processing fee, others fix the loan processing fee depending on the amount of loan and a fixed percentage is used to calculate the fee. While comparing the loan processing fee, it is imperative to check other charges like late payment charges in case of a missed EMI of various banks.

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Foreclosure Charges:

Banks charge an extra amount for prepayment of the car loan before the end of the loan tenure. Suppose you want to pay off your car loan in one go, you may have to shell out around 2 percent to 5 percent of the outstanding balance as foreclosure charges. Make a thorough check with various banks about the charges for foreclosing your car loan.

Package Deals:

Car dealers often have tie-ups with various banks offering pre-approved car loans at the car showroom. While pre-approved loans may look very alluring but are often costlier than independent car loans.

Bundled Insurance:

Banks offer clients the option of free insurance as an incentive to taking a car loan. As a borrower, you can also request the bank to offer you a bundled insurance plan to help you be stress-free about it in times of despair.

Buying a car and getting a car loan can be a little grueling but if you do it the right way it may not be as tough as it seems to be. Make sure you get yourself a credit check regularly with CRIF to ensure that you are eligible to apply for a car loan. CRIF provides you a free credit score, once every year.