Knowledge is power when it comes to protecting against cyber attack says DynaRisk
Andrew Martin, CEO DynaRisk, shares why cyber security spending needs to trickle down to smaller businesses in the sector to ensure customers are protected.
For financial executives, knowledge is power when it comes to protecting against cyber attack
Small-to-medium-sized businesses are lacking when it comes to cyber security. While large organisations and certain sectors such as finance are ploughing big sums of money into cyber-defences, we are still seeing many smaller businesses across a range of sectors accidentally leaking customer information that cyber criminals can access and abuse.
Nevertheless, while increased investment may seem like the obvious solution for companies that have the resources, additional expenditure doesn’t necessarily equate to better defences. Over the last few years, we’ve witnessed data breaches from organisations including Facebook, Apple, J.P Morgan and British Airways – no doubt caused by archaic systems and poor staff awareness.
Attacks are evolving and becoming increasingly sophisticated, often changing at a pace that many businesses can’t keep up with. Unfortunately, cybersecurity issues often stem from a lack of knowledge and a lack of consistent training within an organisation; around 88% of UK data breaches were caused by human error last year, and not because of direct cyber-attacks.
Knowledge is power
For high-risk sectors like finance, organisations need to be doing much more to ensure that systems are properly fortified, and that breaches and leaks are not the result of human error. Any form of data loss or theft within this sector can, naturally, have significant consequences - and so more education is critical. Cyber-crime and technology is quickly evolving, and businesses of all sizes need to ensure staff have - at the very least - a basic level of knowledge when it comes to cybersecurity.
Adequate training can involve providing staff with the tools they need to keep themselves and the wider company safe. Because cybersecurity is nebulous, it can often feel irrelevant and people remain disengaged. However, by harnessing the tools available to assess individual workers’ cybersecurity credentials - something which can involve checking staff for stolen information, out of date or vulnerable software, as well as any potential privacy issues – the issue becomes real and relevant to everyone.
From discovering their own personal vulnerabilities, staff members can follow tailored advice and act to improve their credentials. This gives them something tangible to work with and act upon in both their private and professional lives. Ultimately, good cyber hygiene starts at home and a savvy workforce helps to protect the business as a result.
As attacks become more sophisticated, it’s more important than ever to remain constantly up to date with new risks as they emerge. Staff members of all levels should be taught vigilance and how to pre-emptively detect threats through regular, relevant training and by evaluating security credentials.
Third-party providers and cyber-footprints
For the financial sector, the risks associated with third-party providers are also huge. Having an extended network of suppliers can massively increase cyber-footprints, which are more difficult to manage the larger they become. A robust cyber-risk management programme that includes diligent checks of third parties, with ongoing monitoring activities, is essential for financial companies.
When dealing with third-party suppliers, financial executives need to work with wider teams to identify any potential risks. Start by investigating the way each supplier collects and processes data, as well as the way they store it. Is the company GDPR-compliant? Does it store data on cloud-based systems or within a secure server? In addition to this, while new technologies are an exciting prospect for businesses, novelty may supersede security exposing a range of potential difficulties. New technologies can unintentionally leave companies open to attack, especially when the tech is too new to be properly understood in terms of vulnerabilities.
The concept of cybersecurity scoring can therefore be helpful in these instances too - a security score allows companies to vet the accuracy of an assessment made by other organisations who might be trying to determine partner risk.
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Education is the most powerful weapon
Spending more on security software isn’t the only thing that financial businesses should be looking to implement; education is arguably as important. Building – and enforcing – a resilient cybersecurity strategy lies in continuous education of all employees and equipping them with the knowledge and tools to detect and prevent attacks. Staying ahead of the curve means regularly monitoring and adapting to new threats – with continuous education, breaches and hacks can be more easily detected and remedied.
AI and the future of global trade
Artificial intelligence (AI) is becoming entrenched in our daily lives, but the technology is still surrounded by misconceptions and skepticism. Ask the public and they may jump to dystopian scenarios where robots have taken over the world.
While this makes for a good sci-fi blockbuster plot, the reality is different and more benign. Those products that Amazon suggested you buy? AI. That TV series you were recommended to watch on Netflix? AI. That self-driving Tesla car you crave to take for a spin? You guessed it: AI.
There is no single industry that is not being re-shaped by technology. Until recently, however, there was one noteworthy exception: global trade. Fortunately, that is slowly changing.
The mechanism that underpins global trade – trade finance – is an industry that remains largely paper-based and reliant on manual processes. This US$18tn a year industry is now being influenced by a new wave of technological innovation, including AI.
Exploring the potential of AI in Trade Finance
AI refers to the use of computer-aided systems to help people make decisions or make decisions for them. It relies on large volumes of data and models to make sense of information and draw intelligence.
In trade finance, AI is helpful in analysing quantitative data, and the repetitive nature of trade finance means that there is a lot of non-traditional data at our disposal.
This means that when trade finance providers need to assess the risks of funding a transaction, AI models can be a very efficient tool for data analysis and reveal intelligence and risks relating to small companies.
AI helps the industry move beyond traditional credit scoring processes, which are often outdated and remain reliant on historical accounting entries – a barrier that prevents small companies from accessing trade finance and has resulted in a $1.5tn global shortfall.
Overcoming the barriers
AI can tackle this shortfall by creating accurate credit scoring models. This can include a company’s payment history, measure the risks of funding a transaction, identify supply chain risks, and benchmark them against their peer group.
Trade finance providers can use this information to communicate effectively with their SME clients, ultimately helping establish better business relationships.
Towards a technological utopia?
The adoption of AI has the potential to do a lot of good in the industry, and the industry is in the early stages of radical transformation.
Advances are driven by fintechs as well as a willingness to change. The industry is working together to create new infrastructure for distributing trade finance assets to other investors in a transparent, standardised format.
The creation of infrastructure is possible due to improvements in technology and integrated across the trade ecosystem in cooperation with banks, insurers, and other industry participants.
It’s collaboration at its best: together, the industry is using technology to re-shape global trade as we know it.