Is Passwordless Authentication the Next Big Step?
Consider these facts:
- Over 80% of hacking is password related.
- In the first world the average cost of fixing a successful hack is $3.9 million.
- The average person spends 11 hours a year changing or resetting his or her passwords. For a company with approximately 15,000 employees, the cost of this is $5.2 million per annum, including a cost of $1 million for password resets alone.
- This average person has between 25 to 85 passwords for the various applications he or she uses.
- In online retail, 90% of attempts to get into the website are by hackers who have a success rate of about 1%.
The implications for world economic growth and for business
These statistics adversely impact customers who find using the internet a stressful experience and thus often limit the time they spend on the Web. Research indicates that most consumers will pay a premium to have a pleasant online experience – no passwords expired, no one time pins etc.
For businesses the main issue is the time spent in ensuring their internet gateways are safe from hackers to avoid the reputational and other damage they will suffer if they are hacked. Invariably, this leads to more complexity which scares off customers, encourages hackers to find flaws and so the spiral continues.
Nor is this only dragging down businesses, it also has a sizeable effect on the global economy. Just look at the world’s ten largest companies:
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Source: Bloomberg, Google |
The seven companies shown in blue above are based on a “platform model”, highlighting the importance of this issue to the world’s economy. With seven of the companies in the tech sector and two in financial services (Berkshire Hathaway, J.P. Morgan), it is obvious just how important their internet platforms are to their success.
The solution
A good solution will need to have the following elements:
- Security, for obvious reasons.
- Privacy – with the pending full commencement of the Protection of Personal Information Act this will become an even more important element.
- Sustainability – it needs to be robust, flexible and long lasting.
- Inclusive – with the rapid breakout of people into distinct groupings (LGBT, #Metoo etc), the solution must cater for all these needs.
- Scalability – as the world is making greater use of the internet, any new system must be able to rapidly scale up.
- Pleasant user experience – it needs to be easy to use.
This solution should move away from passwords towards alternatives like biometrics (facial recognition, fingerprint authentication and the like), QR code authentication and even to the system recognising unique habits you have like how you toggle a mouse.
These solutions are becoming more available and in the US companies which have moved away from passwords are finding their sales line growing, costs being reduced, productivity rising and happy customers.
Make sure you don’t lag behind your competitors in this important developing field.
Do You Need Business Interruption Insurance?
Catastrophes like floods and fires do occur and there is insurance to cater for these types of events. There are two different types of insurance cover for these events – one to repair or replace the assets damaged (your normal insurance policy) and one to compensate you for the losses incurred during the time it takes to get the business going again. This latter one is known as ‘Business Interruption’ or ‘Loss of Profits’ insurance.
Statistics show that nearly three out of four businesses never recover from a catastrophic event and it is therefore important to ensure that your Business Interruption insurance has been carefully thought through.
What to insure for
You need to have a good grasp of your costs and expected sales and gross profit. You don’t want to underinsure so if your business is growing reflect that fact – for example if you expect 10% growth (and trends in your business justify this) show this to insurers or you won’t get paid out this additional amount.
It is important to make sure that all your projections are well grounded and can be defended as they will be closely scrutinised by loss adjustors in the event of a claim. Thus, the better you understand your costs, the less chance of having a claim either rejected or adjusted downwards.
Another critical factor is the indemnity period. This is the time you will be covered for whilst out of business. For example, if you put a six-month indemnity period in your policy, you will only get paid out for six months even if it takes twelve months to get the business back on its feet again.
Let’s look at an example…
Bernie has a cosmetics factory and his year end is 31 December.
| Bernie’s Cosmetics Factory | ||||
| Budget for Year | R | |||
| Sales | 120,000 | |||
| Cost of Sales | (45,000) | |||
| Purchases | (10,000) | ** | ||
| Wages | (35,000) | |||
| = GROSS PROFIT | 75,000 | |||
| COSTS | (46,000) | |||
| Salaries | (20,000) | |||
| Distribution | (6,000) | ** | ||
| Maintenance | (5,000) | ** | ||
| Rent | (15,000) | |||
| = PROFIT | 29,000 | |||
On January 2, the factory burns down. It will take 12 months to get the factory up and running again.
| Business Interruption Claim | R | |||
| ADJUSTED GROSS PROFIT | 65,000 | |||
| Gross Profit | 75,000 | |||
| Less Purchases | (10,000) | |||
| COSTS INCURRED | 40,000 | |||
| Salaries | 20,000 | |||
| Rent | 15,000 | |||
| Preparation Cost | 5,000 | *** | ||
| = CLAIM | 105,000 | * | ||
| *Adjusted gross profit plus your incurred costs. | ||||
| **Variable costs which will not be incurred in the 12-month period of re-establishing the factory. | ||||
| ***Putting together claims is a time-consuming task, so include it in your policy. | ||||
| NB! Include VAT in the assured amount as insurance pay outs include VAT. | ||||
You can see from this simple example that this is a very complex process – spend time with your accountant getting to grips with your revenues and costs. Also use a reliable insurance broker.
Remember that 43% of businesses that suffer a catastrophe never trade again and a further 29% go out of business within two years.
Your Selection of Budget 2020 Tax Calculators
- How long will you work for the taxman today?
Input your salary into the 2020 Tax Clock calculator and find out how many hours you will spend today working for the taxman, and at what time precisely you will finally start working for yourself (warning – it’s not pretty!).
- How will your income tax change?
Put your monthly taxable income into Fin24’s Budget 2020 Income Tax Calculator to find out.
- How much extra will your sin taxes cost you this year?
Work out how much more you will be shelling out for spirits, wine, beer and cigarettes (or how much you will be saving if you don’t indulge!) with Fin24’s Budget 2020 Sin Tax Calculator.
