Cyber Attacks, Big Tech and Brexit

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Cyber Attacks, Big Tech and Brexit

Cyber-attacks on financial services reached new heights in 2018

It should come as no surprise that financial services continues to be one of the most regularly-targeted industries by cyber criminals.

What may be surprising, however, is just how much the regularity of cyber-attacks has increased. General awareness around data privacy and cyber threats has never been higher – but unfortunately, neither has the number of attacks.

The Financial Conduct Authority reported that in total, the number of cyber-attacks rose from just 25 in 2017 to 145 in 2018 – a rise of 480% in the space of 1 year.

Investment banks in particular saw a monumental increase in the number of data breaches, reporting 34 attacks up from just 3 in 2017. Attacks on retail banks, retail investment firms and insurance companies also saw a dramatic rise.

It’s possible that the reason why financial services companies continue to be so regularly targeted is because they are thought to have less well-developed security systems than other institutions. Older firms in particular may be more reliant on enterprise systems that they have used for years, and may not have yet considered quite how vulnerable their infrastructure is to attack.

On a more optimistic note, however, the increase in reports also suggests that industry professionals are more aware of threats and are becoming more adept at spotting and reporting them, which is a good sign as it shows that cyber security is being taken seriously. As financial services firms continue to invest in newer technologies, it is paramount that they ensure their security practices evolve at the same rate, and that security is not left behind for the sake of progress.

Tensions increase between Fintech and Big Tech increase

A recent report by the Financial Stability board (FSB) indicates that the biggest threat to banking may not be fintech, as originally thought, but larger tech firms, or ‘Big Tech’, who are slowly but surely extending their reach into financial services.

Amazon, Facebook, Google and Apple all own vast quantities of our personal data, and it seems only inevitable that they would want to put that data to use in order to compete against banks, fintechs and other financial institutions in order to compete in the financial services space.

Big Tech companies have a unique edge over other financial companies, in that they are not limited to just our financial information. Information like our purchase habits, our personal details and even our online search histories can all be used to build up extensive and detailed user profiles. Combining all this data with our financial information would allow tech giants to compile fiscal profiles and assess credit ratings and the like with an alarming degree of accuracy heretofore unheard of in finance.

The idea of massive tech firms being able to build even more detailed profiles of their users, and using those profiles to make decisions that affect people’s real-world financial standing, may not be welcomed by many. There’s already a good deal of concern that these companies need to have more restrictions placed on them in terms of how much personal data can be harvested. Giving them the keys to people’s financial information would seem to be the final step towards granting them a full monopoly.

Hiscox Insurance show they are prepared for Brexit as profits treble

Insurance provider Hiscox announced earlier this week that their pre-tax profit in 2018 was $137.4m, up $39.7m from 2017. The company’s London market was their strongest performer in 2018. This positive news comes after the company spent three years making an effort to reduce or entirely cease unprofitable activities and replace them with more promising business.

The company’s Brexit preparations cost an estimated $15m, and are expected to cost a further $2.4m a year in the future. Hiscox indicated that they are prepared for the UK’s exit from the EU ‘even if British politicians are not’. One of the ways in which the company has ensured that they will be ready for Brexit is by establishing a solid presence in Luxembourg.

Hiscox’s strong growth in the London market even as Brexit looms is a hugely encouraging sign for the company’s future. Hiscox chief executive Bronek Masojada commented: ‘We will continue to invest in our people, infrastructure and brand and maintain our focus on disciplined growth’.

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