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A New Dimension For Financial Institution’s War on Cybercrime

A New DimensionFor Financial Institution’s War on Cybercrime

By Cliff Beek, CEO and president, Cloud Constellation Corporation

Last year broke records for cybercrime, and 2018 is proving to be another good year for bad actors as well.

In April, three Mexican banks experienced security incidents while accessing the nation’s interbank electronic transfer system. No funds or customer data were taken, but operations at all three banks were slowed or halted. In May, attackers claiming to have stolen about 90,000 customer records contacted two of Canada’s largest banks.

Financial institutions are willing to pay a premium to protect their organizations from the liability and damage to brand equity that a cyber-attack can cause. But money isn’t always the answer. One of the biggest strategic challenges facing financial institutions today is the security of data assets, either at rest or in motion, around the world.

Though Gartner predicts that worldwide cybersecurity spending will climb to $96 billion in 2018—for antivirus, intrusion detection, monitoring and other tools—a static cybersecurity strategy will not address evolving data threats. Money won’t solve the problem without innovation.

As financial institutions have undergone digital transformation and moved their business applications and data storage operations to cloud services and data centers, they run the risk of exposing high-value, highly sensitive data to bad actors. Institutions of all sizes are subject to the vulnerability of the public internet and a global,disparate network infrastructure.

Cliff Beek

Cliff Beek

A New Twist on Currency

Twelve of the 26 publicly listed banks in China have already adopted blockchain technology, and more than 200 financial institutions worldwide are either using it or developing use cases for it. As financial institutions embrace blockchain-based cryptocurrency, security consequences must be considered.

Although blockchain technology itself is highly secure, blockchain-based cryptocurrency is not exempt from the vulnerability of the terrestrial infrastructure. Hackers have pulled off numerous cryptocurrency data breaches that have left online vaults empty. As the world has migrated to cloud services, it is becoming clear that the time is now for a paradigm shift in how to store and access high-value data such as digital currency.

This means financial institutions using blockchain technology will need to find an alternative, secure storage and managed network solution to allay customers’ cybersecurity concerns. What if there was a way to bypass the terrestrial network infrastructure entirely to greatly mitigate exposure and secure this data from theft?

Cyber threats today are continuously evolving, but cloud services run across both public and private networks using cybersecurity solutions that are not robust enough to stay ahead of those threats. Consequently, cryptocurrency is being targeted and stolen.

Storing Cryptocurrency in Space

A new dimension in cybersecurity is on the horizon. A space-based global network and cloud data storage service will provide cryptocurrency asset owners, exchange operators and banks with a global, seamless cloud infrastructure. This solution would entirely isolate and protect sensitive data from the vulnerable global terrestrial network infrastructure.

Blockchain technology provides an immutable ledger of transactions, and storing the data in space would provide an additional layer of impenetrable security. Since this data never traverses the terrestrial network infrastructure, an ultimate “air gap security” or “Space Gap” would be created to offer unprecedented data security.Bypassing exposure to terrestrial networks, a network of satellite-based data vaults would create the ultimate secure “cloud” storage. Its architecture and operation would provide a truly transformational way of securing data assets, providing a new dimension for cybersecurity risk mitigation.

Financial institutions looking for a cloud service that provides physical protection of their digital currency and that of their customers, a solution of this type would serve as a key market differentiator. It is not feasible for an organization to build and maintain a global, seamless terrestrial network for their internal enterprise connectivity, business operations, or communications and transactions. This is because such a system would need to include a seamless terrestrial network infrastructure to be entirely secure.

However, this type of system is possible in space. One day soon, financial institutions will look to the skies for the satellite-based, cloud storage of highly sensitive, high-value data. It only makes sense that cryptocurrency exchange operators, banks and currency owners would do the same for their digital currency assets.

Broader Implications

Cold vault storage is just one application for the commercialization of space. Satellite communications has been a fundamental and critical part of the global communications infrastructure, therefore the emergence of cloud services in low Earth orbit (LEO) is a natural evolution.

While space-based cloud services operating in LEO is the first step, one can envision space-based cloud services will be an integral part of the infrastructure for all future commercialization and exploration such as Moon and Mars colonization, including while humans are in transit.Communications and data storage for deep space exploration are a natural extension of space-based cloud service in LEO.

While the benefits (security, reliability, efficiency) of blockchain technology are well understood for applications and services on Earth, they are clearly amplified for future commercial uses in space. Blockchain will provide an immutable distributed ledger capability for humans to manage data and execute transactions across vast, unprecedented distances.Given the vast distances, confidence in the data and the transaction must be of the highest level. Blockchain enables a high standard for confidence in the data and transactions.

Above and Beyond

Currently, cybercrime continue to increase in frequency, impact and sophistication, despite increased cybersecurity spending. That’s because despite valiant efforts, cybersecurity strategies are bound to inherently insecure terrestrial networks. The solution, then, is to escape the cyber risk of terrestrial networks for a space-based system that isolates and secures critical, high-value data. It’s an idea worth pursuing for financial institutions looking for ways to keep their data – including cryptocurrency assets – secure that goes above and beyond the norm.

About the author:

Cliff Beek is a leading global communications executive. He has extensive experience with the management and financing of equity-backed ventures within areas of satellite, mobile broadband, mobile app development and cloud infrastructure entities. Beek founded Star Asia Technologies and Laser Light Communications and served as the EVP at CoCo Communications. He holds an MBA from the Wharton School, University of Pennsylvania.

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