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Cybersecurity in Europe is Improving: Thank You GDPR?

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Cybersecurity in Europe is Improving Thank You GDPR

By Jake Olcott, VP of Strategic Partnerships at BitSight

After years of debate over whether to impose new cybersecurity regulations on companies, General Data Protection Regulation (GDPR) laws went into effect in May 2018. Already we’ve seen several data breach victims ordered to pay fines under the new rules and cookie disclosure notices are popping up on more websites than ever.

Everyone is waiting with bated breath for the first report from the Information Commissioner’s Office (ICO), to be issued after the implementation of GDPR, in order to gain an understanding of the magnitude of breach reporting.

The most recent report from the Information Commissioner’s Office (ICO) has revealed a 29% increase in the number of reported data security incidents, from 3146 between April and June 2018, to 4056 from July to September 2018. This demonstrates a 490% increase compared to the same quarter in 2017. This doesn’t necessarily mean that organisations are experiencing more incidents, but it does means that more are now being reported, as organisations try to tread carefully.

This has inevitably been fuelled by GDPR, as well as the significant data breach incidents that recognisable brands have suffered. However, this increase is also likely due to the new data breach notification requirements under GDPR, which require organisations to report incidents within 72 hours of becoming aware of them.

Drilling into the statistics, most data breach incidents are down to people, processes and inadequate policies. These frequently involve internal users making mistakes, including the incorrect disclosure of data; this accounted for 62% of all data incidents between July and September 2018.

In terms of monetary penalties, £875,000 of fines were issued under the UK’s Data Protection Act (DPA), between July and September 2018, down from £1,030,000 between April and June 2018. It should be noted that from GDPR’s enforcement on 25th May to the beginning of October 2018, fines reached £1,425,000, with organisations undoubtedly falling foul of the new regulations as they work towards achieving full compliance.

But let’s think about the bigger picture. Is GDPR working? How would we know?

For years, global policymakers have struggled to develop effective responses to cyber threats, in part because they just don’t have the data to understand what’s actually happening in cyberspace. Think about it — if you are a policymaker considering how to address unemployment, you can turn to the Office for National Statistics (ONS) – which measures labour market activity, working conditions and the impact of economic activity – in addition to comprehensive census data on personal and socio-demographic, and economic issues.

When it comes to cybersecurity, the UK Government’s National Cyber Security Centre (NCSC) has taken the leading role in significantly raising awareness of the evolving cybersecurity risks facing all UK businesses with a digital footprint, as well as the threat to the UK’s Critical National Infrastructure (CNI). This includes a comprehensive bank of guidance on a variety of topics, alongside extensive education and research papers, insights, alerts and advisories, and recommended certified cybersecurity products.

BitSight is taking a different approach to cybersecurity and risk management, enabling it to profile and identify specific threats. Thanks to its extensive data collection and processing techniques and capabilities, BitSightis able to collect, evaluate, and measure cybersecurity performance across global organisations, providing unique and valuable insight into global, regional, and sectoral performance trends across organisations of varying sizes.

When BitSight recently analysed the security performance of more than 140,000 organisations worldwide, the findings were surprising. While its research revealed a steady decrease in security performance across all worldwide regions, organisations within continental Europe actually improved their security performance over the last year. Some of the areas that organisations have improved on include the implementation of stronger controls to reduce Internet exposed services (open ports).

Security performance data may be useful to policymakers as they consider the impact of existing regulations like GDPR, but also future policies and regulations. Policymakers around the world will continue to consider implementing regulations based on GDPR that will protect citizens from poor data security management.

The industry has already seen many calls to adopt similar legislation elsewhere around the world, including Apple’s Tim Cook who, in October 2018 at the Conference of Data Protection and Privacy Commissioners in Belgium, proposed that the U.S enact a policy similar to GDPR. This summer, California passed the California Consumer Privacy Act that imposes stronger privacy regulations for companies doing business in the state, with this also being discussed across the United States.

How will policymakers judge the necessity or effectiveness of these efforts? In what sectors should they spend their time and focus? On what sized companies? What data will they use? How will they model the impact of introducing such policies?

Global policymakers must begin thinking about the essential elements that will be necessary to build a lasting legal and policy framework to address these significant cyber risks. The ONS was established over 20 years’ ago; as we look ahead to the next two decades, the transformational changes that will occur worldwide as a result of technological and connectivity developments will inevitably present a new wave of cybersecurity challenges, making quantitative cybersecurity more crucial than ever.

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Oil extends losses as Texas prepares to ramp up output

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Oil extends losses as Texas prepares to ramp up output 1

By Ahmad Ghaddar

LONDON (Reuters) – Oil prices fell from recent highs for a second day on Friday as Texas energy firms began to prepare for restarting oil and gas fields shuttered by freezing weather.

Brent crude futures were down $1.16, or 1.8%, to $62.77 per barrel, by 1150 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell $1.42, or 2.4%, to $59.10 a barrel.

Unusually cold weather in Texas and the Plains states curtailed up to 4 million barrels per day (bpd) of crude oil production and 21 billion cubic feet of natural gas, according to analysts.

Texas refiners halted about a fifth of the nation’s oil processing amid power outages and severe cold.

However, firms in the region on Friday were expected to prepare for production restarts as electric power and water services slowly resume, sources said.

“The market was ripe for a correction and signs of the power and overall energy situation starting to normalise in Texas provided the necessary trigger,” said Vandana Hari, energy analyst at Vanda Insights.

Oil fell despite a surprise fall in U.S. crude stockpiles in the week to Feb. 12, before the freeze. Inventories fell by 7.3 million barrels to 461.8 million barrels, their lowest since March, the Energy Information Administration reported on Thursday. [EIA/S]

The United States on Thursday said it was ready to talk to Iran about both nations returning to a 2015 agreement that aimed to prevent Tehran from acquiring nuclear weapons.

While the thawing relations could raise the prospect of reversing sanctions imposed by the previous U.S. administration, analysts did not expect Iranian oil sanctions to be lifted anytime soon.

“This breakthrough increases the probability that we may see Iran returning to the oil market soon, although there is much to be discussed and a new deal will not be a carbon-copy of the 2015 nuclear deal,” StoneX analyst Kevin Solomon said.

(Additional reporting by Roslan Khasawneh in Singapore and Sonali Paul in Melbourne; editing by Jason Neely)

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Analysis: Carmakers wake up to new pecking order as chip crunch intensifies

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Analysis: Carmakers wake up to new pecking order as chip crunch intensifies 2

By Douglas Busvine and Christoph Steitz

BERLIN (Reuters) – The semiconductor crunch that has battered the auto sector leaves carmakers with a stark choice: pay up, stock up or risk getting stuck on the sidelines as chipmakers focus on more lucrative business elsewhere.

Car manufacturers including Volkswagen, Ford and General Motors have cut output as the chip market was swept clean by makers of consumer electronics such as smartphones – the chip industry’s preferred customers because they buy more advanced, higher-margin chips.

The semiconductor shortage – over $800 worth of silicon is packed into a modern electric vehicle – has exposed the disconnect between an auto industry spoilt by decades of just-in-time deliveries and an electronics industry supply chain it can no longer bend to its will.

“The car sector has been used to the fact that the whole supply chain is centred around cars,” said McKinsey partner Ondrej Burkacky. “What has been overlooked is that semiconductor makers actually do have an alternative.”

Automakers are responding to the shortage by lobbying governments to subsidize the construction of more chip-making capacity.

In Germany, Volkswagen has pointed the finger at suppliers, saying it gave them timely warning last April – when much global car production was idled due to the coronavirus pandemic – that it expected demand to recover strongly in the second half of the year.

That complaint by the world’s No.2 volume carmaker cuts little ice with chipmakers, who say the auto industry is both quick to cancel orders in a slump and to demand investment in new production in a recovery.

“Last year we had to furlough staff and bear the cost of carrying idle capacity,” said a source at one European semiconductor maker, who spoke on condition of anonymity.

“If the carmakers are asking us to invest in new capacity, can they please tell us who will pay for that idle capacity in the next downturn?”

LOW-TECH CUSTOMER

The auto industry spends around $40 billion a year on chips – about a tenth of the global market. By comparison, Apple spends more on chips just to make its iPhones, Mirabaud tech analyst Neil Campling reckons.

Moreover, the chips used in cars tend to be basic products such as micro controllers made under contract at older foundries – hardly the leading-edge production technology in which chipmakers would be willing to invest.

“The suppliers are saying: ‘If we continue to produce this stuff there is nowhere else for it to go. Sony isn’t going to use it for a Playstation 5 or Apple for its next iPhone’,” said Asif Anwar at Strategy Analytics.

Chipmakers were surprised by the panicked reaction of the German car industry, which persuaded Economy Minister Peter Altmaier to write a letter in January to his counterpart in Taiwan to ask its semiconductor makers to supply more chips.

No extra supplies were forthcoming, with one German industry source joking that the Americans stood a better chance of getting more chips from Taiwan because they could at least park an aircraft carrier off the coast – referring to the ability of the United States to project power in Asia.

Closer to home, a source at another European chipmaker expressed disbelief at the poor understanding at one carmaker of how it operates.

“We got a call from one auto maker that was desperate for supply. They said: Why don’t you run a night shift to increase production?” this person said.

“What they didn’t understand is that we have been running a night shift since the beginning.”

NO QUICK FIX

While Infineon, the leading supplier of chips to the global auto industry, and Robert Bosch, the top ‘Tier 1’ parts supplier, both plan to commission new chip plants this year, there is little chance of supply shortages easing soon.

Specialist chipmakers like Infineon outsource some production of automotive chips to contract manufacturers led by Taiwan Semiconductor Manufacturing Co Ltd (TSMC), but the Asian foundries are currently prioritising high-end electronics makers as they come up against capacity constraints.

Over the longer term, the relationship between chip makers and the car industry will become closer as electric vehicles are more widely adopted and features such as assisted and autonomous driving develop, requiring more advanced chips.

But, in the short term, there is no quick fix for the lack of chip supply: IHS Markit estimates that the time it takes to deliver a microcontroller has doubled to 26 weeks and shortages will only bottom out in March.

That puts the production of 1 million light vehicles at risk in the first quarter, says IHS Markit. European chip industry executives and analysts agree that supply will not catch up with demand until later in the year.

Chip shortages are having a “snowball effect” as auto makers idle some capacity to prioritize building profitable models, said Anwar at Strategy Analytics, who forecasts a drop in car production in Europe and North America of 5%-10% in 2021.

The head of Franco-Italian chipmaker STMicroelectronics, Jean-Marc Chery, forecasts capacity constraints will affect carmakers until mid-year.

“Up to the end of the second quarter, the industry will have to manage at the lean inventory level,” Chery told a recent Goldman Sachs conference.

(Douglas Busvine from Berlin and Christoph Steitz from Frankfurt; Additional reporting by Mathieu Rosemain and Gilles Gillaume in Paris; Editing by Susan Fenton)

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Aussie and sterling hit multi-year highs on recovery bets

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Aussie and sterling hit multi-year highs on recovery bets 3

By Tommy Wilkes

LONDON (Reuters) – The Australian dollar rose to near a three-year high and the British pound scaled $1.40 for the first time since 2018 on optimism about economic rebounds in the two countries and after the U.S. dollar was knocked by disappointing jobs data.

The U.S. currency had been rising in recent days as a jump in Treasury yields on the back of the so-called reflation trade drew investors. But an unexpected increase in U.S. weekly jobless claims soured the economic outlook and sent the dollar lower overnight.

On Friday it traded down 0.3% against a basket of currencies, with the dollar index at 90.309.

The Aussie rose 0.8% to $0.784, its highest since March 2018. The currency, which is closely linked to commodity prices and the outlook for global growth, has been helped by a recent rally in commodity prices.

The New Zealand dollar also gained, and was not far off a more than two-year high, while the Canadian dollar rose too.

Sterling rose to $1.4009 on Friday, an almost three-year high amid Britain’s aggressive vaccination programme.

Given the size of Britain’s vital services sector, analysts say the faster it can reopen the economy, the better for the currency. Sterling was also helped by better-than-expected purchasing managers index flash survey data for February.

The U.S. dollar has been weighed down by a string of soft labour data, even as other indicators have shown resilience, and as President Joe Biden’s pandemic relief efforts take shape, including a proposed $1.9 trillion spending package.

Despite the recent rise in U.S. yields, many analysts think they won’t climb too much higher, limiting the benefit for the dollar.

“Our view remains that the Fed will hold the line and remain very cautious about tapering asset purchases. We think it will keep communicating that tightening is very far off, which should dampen pro-dollar sentiment,” said UBS Global Wealth Management strategist Gaétan Peroux and analyst Tilmann Kolb.

ING analysts said “the rise in rates will be self-regulating, meaning the dollar need not correct too much higher”.

They see the greenback index trading down to the 90.10 to 91.05 range.

U.S. dollar

Aussie and sterling hit multi-year highs on recovery bets 4

The euro rose 0.4% to $1.2134. The single currency showed little reaction to purchasing manager index data, which showed a slowdown in business activity in February. However, factories had their busiest month in three years, buoying sentiment.

The dollar bought 105.39 yen, down 0.3% and a continued retreat from the five-month high of 106.225 reached Wednesday.

(Editing by Hugh Lawson and Pravin Char)

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