Showing posts with label data. Show all posts

Thursday, August 1, 2024

SAFEGUARDING DATA IN M’SIA’S NEW ERA OF E-INVOICING

Vast potential: Digitalisation boosts growth and efficiency, but adopting strong cybersecurity measures and secure software can protect data, systems and customers. Image: Blake Wisz / Unsplashed

AS THE roll out for Malaysia’s e-invoicing mandate draws near, small businesses around the country are embarking on their digital transformation journeys.

In doing so, they unlock numerous benefits such as increased efficiency and productivity and improved customer engagement, while becoming more competitive and resilient.

This digital shift however, can also introduce significant data and security risks.

Understanding these risks is crucial to protect businesses, their data and their customers.

Data breaches and other online crimes, including hacking and financial fraud, can have disastrous effects on businesses, such as the exposure of sensitive customer information, intellectual property theft and the disruption of business operations.

These breaches in security can result in significant losses for companies, sometimes amounting to millions of ringgit.

Additionally, small businesses, often the targets of cyber-attacks because they are seen as more vulnerable, may lose valuable consumer trust and potential opportunities.

Ahead of the phased mandate launch in August, business owners can ensure they are fully prepared by understanding the key advantages and risks of e-invoicing, and take proactive measures to safeguard their business.

Security first: Cyber threats are increasingly complex and widespread. Small businesses can protect sensitive data by choosing reputable software with strong security.

Security benefits and e-invoicing considerations

Despite the risks, the shift towards e-invoicing is certain to offer businesses numerous immediate and tangible benefits.

Enhanced efficiency, reduced errors and improved transparency in financial transactions make e-invoicing more secure than manual handling and traditional invoicing practices.

With oversight from the Malaysia Digital Economy Corporation (MDEC), e-invoicing is tracked through the Peppol framework and verified in real-time, providing an additional layer of security and accountability.

Verification through Peppol ensures that invoices are authentic, preventing fraud and alterations.

This standardised network facilitates the secure and efficient exchange of electronic documents, protecting them from cyberattacks and potential data breaches.

Choose a reputable software provider

As Malaysian businesses look to adopt solutions that will enable them to comply with the upcoming mandate, prioritising reputable software providers to ensure data, privacy and security protection cannot be overstated.

In today’s digital landscape, cyber threats are pervasive and increasingly sophisticated, targeting vulnerabilities in businesses of all sizes.

By choosing established software providers known for robust security measures, small businesses can protect sensitive customer information and internal data from breaches and theft.

Reliable software providers offer regular updates, advanced encryption and compliance with regulatory standards, ensuring that businesses remain resilient against evolving cyber threats.

Additionally, this proactive approach fosters customer trust, as clients are more likely to engage with businesses that prioritise their privacy and data security.

Xero, for example, adheres to stringent security standards and compliance requirements to effectively safeguard user data.

By incorporating multi-factor authentication (MFA), user accounts and financial data remain secure and protected while Xero’s encryption protocols prevent unauthorised data access, safeguarding it from cyber threats.

With a global presence, including in countries such as the United Kingdom, United States, Singapore, Australia and New Zealand, Xero maintains a high level of cybersecurity features and compliance measures to meet regional and international standards.

The accounting platform currently supports many local businesses in streamlining processes and improving data security.

Additional precautions

In addition to leveraging the security features of cloud accounting software like Xero, Malaysian businesses can take extra precautions to safeguard their accounting data. This includes:

> Paying attention to security notices: staying informed about security alerts and notices from software providers to promptly address emerging threats.

> Reporting unusual activity: encouraging employees to report any suspicious or unusual activity related to accounting data to prevent potential security breaches.

> Deploying antivirus and anti-malware solutions: installing reputable antivirus and anti-malware software on their devices to protect against potentially malicious software.

There is no question that digitalisation presents enormous opportunities for growth and efficiency for small businesses, but with that, come some critical security risks.

By adopting cybersecurity measures and choosing software with robust protection features, small businesses can safeguard their data, systems and customers.

Proactive security management not only protects against financial losses and reputational damage but also builds trust with customers, fostering long-term business success.

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E-invoicing system set to go

PETALING JAYA: With two days to go, most of the 5,000 companies under Phase 1 of the e-invoicing rollout are raring to go and looking at a smooth takeoff, say stakeholders.

Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong said these companies, with an annual turnover of RM100mil and above, should not face any major hiccups when transitioning to e-invoicing on Thursday.

“They will be able to cope with the transition as these companies have the resources to do so,” he said when contacted yesterday about worries some businesses have expressed about beginning the e-invoicing process.

Asked if accounting firms acting for these companies are facing pressure in switching to e-invoicing, Koong, who is a practising auditor and licensed tax agent, said that it is unlikely.

Planned e-invoicing will be troublesome

The e-invoice conundrum dilemma

Thursday, March 28, 2024

Backups are lifeline to your digital lifestyle

Celebrate World Backup Day this Sunday by creating backup copies of your essential data to safeguard your digital lifestyle against potential loss. — Image by freepik

It is said that memories you make are priceless, but in this digital age, our data, whether text, audio, or video, has become equally invaluable.

And its value is not lost to cybercriminals, as data breaches have become so common that protecting personal information has become an ongoing challenge for individuals and organisations alike.

Last year, cybersecurity firm Sophos reported that over 90% of cyberattacks reported by its customers involved data or credential theft.

But hackers are not the only threat to your data – the device holding your information may suffer a hardware failure, be stolen, or even be destroyed in an incident such as a fire or flood.

Despite happening over two decades ago, the near loss of Pixar’s Toy Story 2 assets due to accidental deletion during the 1990s remains a memorable story.

The studio was “saved” by Galyn Susman, a supervising technical director who had been working from home after childbirth and had a remote backup.

Even though much of the film was eventually remade due to quality concerns, the character models and environments from her backup were integral to the final film.

Arina hopes that as awareness increases and user-friendly backup options become more widely available, more people will incorporate backups into their digital routines. — Image by rawpixel.com on Freepik

Last year’s layoff of Susman, along with 74 other employees, struck a chord with fans who remember her as the person who saved Toy Story 2.

As we approach World Backup Day this Sunday, March 31, it’s crucial to remember that although incidents of data loss might seem distant, nobody is immune to such occurrences.

Data dilemmas and disasters

Head of operations at Lucid Analytica, an analytics consultancy, Firdaus Jefri experienced data loss for the first time during his childhood when the hard drive of the family computer failed, resulting in the loss of numerous personal files.

“When my first PC, which I had as a kid, crashed due to a hard drive failure, it was devastating. I had important family photos, videos, and memories stored on it. I also made some great friends while playing games like Runescape and Halo Combat Evolved.

“Unfortunately, as a kid, I didn’t keep track of my passwords and didn’t know how to recover my accounts, losing contact with most of them,” he says.

He adds that his mother’s work documents were lost as well, though they weren’t devastating since she had hard copies on hand, requiring extra effort to recreate everything on a computer.

Cloud storage services can be set up to back up files from a mobile device or a PC, but it’s important to maintain enough free space. — Image by rawpixel.com on Freepik

Fast forward to today, and Firdaus has become a staunch believer in backups, having invested a significant amount into a self-built networked-attached storage (NAS) solution.

He estimates that he has spent approximately RM10,000 on storage for multiple drives totalling 20TB, with each drive serving as a backup for another. This setup enables him to recover data in the event that one drive fails.

Firdaus describes his solution as overkill for most users, though it’s a necessity for him, as his work involved handling large files.

When studying for his PhD, computer system engineer Lee Yang Yang was shocked to witness a fellow student fail his course due to losing his files just before the thesis submission deadline.

In Lee’s experience, users typically only begin to prioritise the security of their files after a personal encounter with data loss.

“If you think a file is important, back it up. It is worth your money to have the extra storage. This would include private and confidential files that could cost you a fortune or even your job if the data is lost,” he says.

Better safe than sorry

While data recovery programs and services (read “Get Your Data Back”, StarLifestyle, May 29, 2023; online at bit.ly/datalostandfound) are available that could help restore lost files, the costs involved are steep.

Sin says that having a comprehensive backup strategy is crucial for recovering from such incidents, likening it to 'insurance' for digital assets. — Synology Malaysia

According to Jason Sin, Malaysia country manager for Synology, a company that specialises in NAS storage, the substantial price tag doesn’t guarantee complete data retrieval.

To save oneself from the headache and hefty fees involved in recovering lost files, it’s best to have a backup system in place.

Nur Arina Ramlee, chief technology officer at Cybersolution Technologies, stresses the value of having proper backups.

“Unfortunately, typically, users do not regularly backup their data as often as they should. Usually, this comes down to a few key elements.

“Many users underestimate how upsetting data loss may be when it occurs to them or believe it only happens to other people.

“People are sometimes discouraged from starting because they believe that creating backups is complicated and time-consuming,” she says.

Arina hopes that as awareness increases and user-friendly backup options become more widely available, more people will incorporate backups into their digital routines.

She recalls an incident involving a restaurant, which was exploring franchising opportunities at the time. The restaurant owner had stored all the key components of the company, including financial records, designs for its franchising plan, and even his beloved recipes – which he spent years perfecting and digitising – on a laptop.

That laptop was stolen at an airport during a business trip, resulting in the loss of years’ worth of data.

The rise of ransomware is another threat to data. In a ransomware attack, the files on a computer system are encrypted, in most cases rendering them unusable, with the threat actor demanding a ransom payment to decrypt the data.

Sin says that having a comprehensive backup strategy is crucial for recovering from such incidents, likening it to ‘insurance’ for digital assets.

Arina recommends a straightforward approach to backup by starting with identifying the data crucial to your daily digital activities. — Cybersolution Technologies

“Ensuring data security and continuity is paramount for users and businesses alike.

“Creating a backup strategy is like providing a safety net, allowing users to restore their data to a previous state and resume normal operations swiftly.

“As digital lifestyles become more prevalent, the potential impact of data loss on both personal and professional fronts has heightened, underscoring the importance of robust backup practices,” he says.

As for companies, Sin highlights cost concerns and limited resources as major reasons why small- and medium-sized businesses (SMBs) often neglect backing up their data.

This is due in part to hardware, software and maintenance costs, along with the lack of a dedicated IT team to manage backup infrastructure. Time constraints, data fragmentation, and the need to evaluate security risks are other factors that can also hinder efforts.

In the long run, such neglect can make it significantly more difficult for a company to recover from cybersecurity incidents such as data breaches and ransomware attacks.

Sin highlighted that the Personal Data Protection Department (PDPD) reported a staggering increase in data breach cases. It received 130 reports by June 2023, a four-fold increase compared to the entire year 2022.

“Such breaches lead to significant financial losses due to causes like configuration errors, hardware damage, data leaks, and malicious encryption,” he says.

Seeking simple solutions

According to a report from data recovery service provider Reno Research Lab, over half of data loss cases in 2023 resulted from user error, primarily accidental deletion (56.38%), with drive corruption coming a distant second, accounting for only 18.09%.

These incidents could have been avoided if users simply made one backup copy.

Fortunately, thanks to the widespread availability of free cloud storage, hefty investments are often unnecessary.

Popular and easy-to-setup options that offer free storage space include Google Drive, Microsoft OneDrive and Apple iCloud.

However, without a subscription, the free storage is limited, with Google Drive offering 15GB for free, while both OneDrive and iCloud provide only 5GB each at no cost.

The cloud storage services can be set up to back up files from a mobile device or a PC, but it’s important to maintain enough free space.

The services provide a range of subscription packages with different storage spaces, with family options typically offering better value for money.

To backup your PC with OneDrive’s desktop client, access the settings menu and navigate to the “Sync and Backup” tab.

From there, select “Manage Backup” to choose which folders, such as Documents, Pictures, Desktop, Music, and Videos to back up.

Unfortunately, OneDrive doesn’t support custom folders for backup, so users have to move their files to one of the listed folders.

Android smartphone users can check out Google Drive for backups. It can be turned on by going to the settings menu and selecting “Backup and reset” and then switching on the “Backup by Google One” option.

This feature automatically backs up various types of data, including apps, SMS and MMS, call history, and device settings when connected to WiFi.

However, remember to manually enable backup for photos and videos in this menu, as it is turned off by default.

For faster access and complete control over your backups, consider using a NAS (network-attached storage) device. It’s a dedicated storage server that connects to your home WiFi network.

It also provides a centralised location to store and access files and data from multiple devices, such as computers, smartphones, and tablets, over the network.

Essentially, it functions as a personal cloud storage solution, offering other features like file sharing, media streaming, and remote access.

However, NAS devices, which come in various configurations and storage capacities, are not cheap.

Those who are more technically inclined could opt to assemble their own unit, but this will require researching various topics and familiarity with terminologies like RAID (redundant array of independent disks) and learning NAS-specific operating systems like TrueNAS and Unraid.

However, if you’re seeking a robust backup plan, consider adopting the popular 3-2-1 backup principle.

It’s a straightforward rule – though very demanding – that is designed to ensure that your data stays safe no matter what happens.

Let’s break it down: “3” stands for having at least three copies of your data; “2” means storing them on two different types of media; and “1” emphasises keeping one copy offsite or on the cloud. This method ensures that your data is well-protected against accidents, hardware failures, and other unexpected events.

Arina recommends beginning with a simple approach: identify the data essential to your daily digital life, such as chat messages, pictures, and documents.

“The key to this is to back up regularly or set your backups to run automatically. Some applications that users use daily may already have this readily integrated into their cloud accounts.

“And remember to test your backups once in a while to ensure they work when needed,” she says.

Sin emphasises the importance of education and awareness in establishing a strong backup culture.

“We encourage everyone to share the significance of backups with friends, family, and colleagues,” says Sin, “in order to collectively cultivate a more secure digital environment.”

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Sunday, February 12, 2023

Demystifying the property market overhang

AN accountant, who is tasked with preparing the books of a corporate, will always be guided by accounting principles when it comes to how the financial statements of the company are presented on an annual basis to ensure they are accurate and reflective of the company’s business affairs.

An auditor, looking at the same prepared accounts, will run through the numbers and audit the key material items to ensure they are reasonable, reflective of the company’s finances, and free from material misstatements, including due to fraud or error, or application of wrong accounting treatment.

In financial statements, two of the most critical items are receivables and inventories.

In order to have proper accounting treatment, accountants and auditors used accounting theories to describe what is deemed to be current, and those that have a longer-dated ageing profile are either impaired or written off.

The reason for this is to ensure that the financial statements reflect the status of a corporation’s current assets and are in no way doubtful.

There is also an application of general provision or specific provision when it comes to how these balances ought to be treated in the financial statements.

Often, we see cases of over-inflated balances and when it came to the crunch of the matter, the management would have no choice but to write them off.

The ‘real’ overhang

At the recently concluded 15th Malaysian Property Summit 2023, the Director of the National Property Information Centre (Napic) presented a paper on the status of the Malaysian property market up to the third quarter of last year (3Q22), with some data points related to the performance of the market up to November 2022.

The full market report is only expected to be released in the middle of next month, where Napic will not only provide the usual annual update of the market’s performance but also provide more insight into some of the key data points that have been much discussed among all stakeholders, of which, one of them is the status of overhang in the market.

As we are aware, the residential overhang at the end of 3Q22 stood at 29,535 units worth some Rm19.95bil.

Napic’s website also provided the details of where these overhang properties are located and the three key states – Johor, Selangor, and Penang – are the main hotspots, accounting for some 14,956 units or just over half of the country’s total overhang.

In terms of the type of properties, the 3Q22 data showed that high-rises comprise 18,962 units or 64.2% of the total overhang.

In terms of price points, 23.8% of the total overhang was priced at RM300,000 and below, 29.5% was priced between RM300,001 and RM500,000, 31.6% was priced between RM500,001 and Rm1mil and the balance was priced above Rm1mil.

In terms of the total value, the residential overhang is skewed towards the high-end segment with properties worth more than Rm1mil accounting for 43.4% of the total overhang value, while those priced between RM500,001 and Rm1mil accounted for 31.9% of the total overhang.

Properties priced between RM301,000 and RM500,000 have a total overhang value of just Rm3.5bil, while properties priced below RM300,000 are worth some Rm1.39bil. These two represent some 24.8% of the total overhang value.

For the service apartments, the total overhang in units stood at 23,688 worth some Rm20.21bil as at end of 3Q22, with Johor alone accounting for 62.4% of the total.

Most of these overhangs in the segment are properties priced between RM500,001 and Rm1mil, which accounted for two-thirds of the total unit numbers and 58.9% in value of the total overhang.

For the longest time, Napic had not shared with the stakeholders the key underlying ageing profile of this overhang, and that has led to a misleading status of the market’s overhang status. It was indeed an eye-opener to see what the real overhang has been.

For example, as seen in Table 1, the key overhang is properties (both residential and service apartments across the four key states) that have been part of the statistics for the last five years and they account for between 51% and 93% of the total overhang units.

In total, these properties accounted for a whopping 75.7% of the market’s overhang status while properties that have been in the market for the last three years are just over 5% from the key states.

Specific mention must also be made on service apartments located in Johor, and those that are in the five to 10 years bucket, as they account for 26% of the total market overhang.

In terms of prices, most of the overhang is seen in the same five to 10 years bucket across the board and they alone account for 71% of the total overhang properties in the market.

As seen in Table 2, properties below three years account for less than 5% of the total market overhang. Specific mention must also be made on service apartments that are in the RM500,001 to Rm1mil bracket and are in the five to 10 years bucket as they account for 25% of the total market overhang.

In the corporate world, when one is up against data that is distorting the real picture, the proper thing to do is to see whether the data is still relevant or otherwise.

Clearly, looking at the ageing profile of the property overhang, those above five years will likely remain unsold for a foreseeable future, mainly due to either being wrongly located and without the proper or good infrastructure to support community living, or untouched by property buyers for simply being too expensive, especially those beyond the RM500,000 price threshold.

Having identified the issues, regulators and property developers would need to come out with strategies to address them and to attract buyers to these properties via a rehabilitation exercise and with a significant price reduction.

The bottom line is to remove them from the overhang data.

Let’s call a spade a spade

So what is Malaysia’s real overhang? Based on the data presented by Napic, one can take comfort that overhang is not as serious as it is made out to be mainly due to a lack of data and proper analysis in terms of what is real overhang previously.

While those more than three years but less than five years are part of statistics, we should redefine them as core overhang while those beyond five years can be redefined as hardcore overhang.

As we have been able to slice and dice these numbers, the real overhang is only perhaps less than 5% of the market in terms of the number of units and value.

Napic could also help stakeholders to understand better the property market data better by breaking down the data points as an overhang that is mainly due to government housing schemes and those that are privately built.

In this way, we could also see whether the government’s intervention is needed to boost demand for these obscurely located properties.

For the private developers, most of these inventories would have been impaired as the likelihood of the assets being realised in full value or even at 50% to 60% of the market value is seen as low.

Private developers too ought to think outside of the box on how to overcome the property inventories sitting in their books as being part of the statistics only results in painting the wrong picture for the property market as a whole.

By Pankaj C. kumar is a long-time investment analyst. the views expressed here are the writer’s own.

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Thursday, August 1, 2024

SAFEGUARDING DATA IN M’SIA’S NEW ERA OF E-INVOICING