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DEFENCE AGAINST THE DARK ARTS – HOW BANKS SHOULD COUNTER THE CYBER THREAT

DEFENCE AGAINST THE DARK ARTS

Geoff Webb, director, solution strategy, NetIQ

DEFENCE AGAINST THE DARK ARTS

DEFENCE AGAINST THE DARK ARTS

Since the earliest incarnations of the banking industry, security has always been of the highest priority. While security mechanisms have evolved from those times, the mechanisms defending high-street banks are still extensive with pin numbers, safes, security doors and alarms all part of their arsenal.

Fortunately, these solutions have made it nigh on impossible for criminals to gain access to cash held on site and bank breaches have almost been forgotten as the primary target for criminals. Unfortunately while the physical threat has receded the virtual threat has grown, with it now posing a very real danger to both retail and investment banks. Criminals are no longer limited to stealing what they can carry from a bank as they can steal far more data by going online. The internet has created a situation where criminals now assume far less risk to themselves, for far greater rewards. Funds stolen by cyber criminals dwarf the amount their physical forbears could ever hope to have escaped with, and data thefts can be far more damaging than stolen funds.

The techniques used by modern cyber criminal are sophisticated and varied in their approach. One technique that has come to the fore in recent years is the Distributed Denial of Service (or DDoS) attack, where criminals flood a bank’s server with requests in an attempt to bring down its network. Research by analysts has uncovered a number of DDoS attacks that have taken place as a way of diverting the attention of IT security teams while millions is being stolen through fraudulent wire transfers. The DDoS attacks do not even need to succeed in bringing down a whole network, a slower network can cause a trading floor to seize up entirely causing considerable financial losses. Internet Service Providers (ISPs) are usually effective at responding to a DDoS attack, providing much needed support when they take place. However, when a DDoS attack does take place it is imperative that banking institutions don’t focus all their attention on this intrusion, as the main attack may in fact be occurring elsewhere undetected.

Geoff Webb

Geoff Webb

One major difficulty for banks is that modern cyber-criminals can be almost indistinguishable from genuine employees. Once inside an organisation’s perimeter a cyber criminal will immediately aim to elevate his own authorisation levels to one of a privileged employee, using the clearance to steal data and other assets. As a result, talking about insider and outside threats to banking security is an increasingly outdated way of thinking. Banks have to assume that they have already been breached and as a result need to act accordingly.

At the same time, however, some hackers have shifted the focus of their attention away from fraud, to stealing raw company data which can be even more damaging. A customer’s personal financial information has real value to cyber-hackers as it can be sold on to other criminals running sophisticated fraud operations. If a customer’s account is compromised in this way, real damage can be incurred to that institution’s finances and reputation.

With this growing online threat, how should banks respond? No firewall can guarantee to keep out every attacker, so it’s inevitable that their perimeter will be compromised, so how can banks limit this threat and ensure corporate information is secure and protected? There is no doubt that this is a considerable challenge as banks are global institutions with thousands of employees. Identifying one intruder posing as an employee is no mean feat.

Some organisations try to identify the tools a hacker is using. This method is flawed as it’s easy to build unidentifiable tools but what can be uncovered is the unusual activity and behaviour a hacker displays. Is there an abnormal level of traffic going to a particular area of the bank or is data flowing in new ways around the business? Being able to spot and identify these signs gives banks a far greater chance of spotting an attack.

While identifying the irregular signs indicating an intrusion is important, ultimately actions need to be taken to prevent an attacker getting a foothold within the bank to begin with. This comes down to carefully controlling what employees can access and ensuring they can only access the data they need. An individual may move departments and not need the access they previously had, this should be acted upon but in reality many organisations struggle to implement this approach. Limiting access across an organisation makes it easier to spot hackers masking themselves as employees and better protects resources. Once this is in place it makes it far easier for the IT team to identify the eratic behaviour of a hacker and mitigate their effect.

The final action banks need to take is to put in place a plan of action for when a bad actor is found. What is the response? Who should be informed? Without this in-depth planning which seems obvious to many, organisations can end up struggling to respond effectively, leaving themselves exposed to greater damage.

Banks need to make available the time and resource to manage the access rights of their employees and get back on the front foot in the struggle with cyber criminals. If this is overlooked it will become increasingly difficult for banks to spot irregular behaviour early and mitigate the effects. Cyber attacks aren’t about to go away and banks need to ensure that they have the tools and processes in place to reduce the chances for fraud or a damaging data breach.

Banking

UBX appoints new Chief Investment Officer

In line with its strategy to explore and invest in companies and platforms of the future, UBX—the Fintech and Corporate Venture Capital arm of Union Bank of the Philippines (UnionBank) — is announcing the appointment of Matthew Kolling as the company’s Chief Investment Officer (CIO).

Matt Kolling

Matt Kolling

As CIO, Kolling will be managing UBX’s Corporate Venture Capital (CVC) fund. He will also play a key role in raising capital for UBX while assisting the company in key corporate transactions, including the structuring of joint ventures and acquisitions.

Prior to his appointment at UBX, Kolling has been Head of Venture Investments at Aboitiz & Company since 2019, wherein he had been working with UBX on investment portfolio decisions. Before that, he held senior positions in Private Equity, Venture Capital, and Investment Banking at firms such as Providence Equity Partners and Morgan Stanley in New York.

Kolling has more than 20 years of experience in managing investments and deals in the Technology and Telecommunications industries and is active in Venture Capital and startup communities in the Philippines and the Southeast Asian region. He currently chairs the Manila Angel Investors Network, among others.

“We at UBX are excited to welcome Matt as our new CIO. We firmly believe that Matt will be instrumental in driving value creation opportunities, both within the CVC fund and our corporate ventures. We look forward to working with him as we fulfill UBX’s vision of a future where banking services are embedded into everyday experiences that matter,” said UBX president and CEO John Januszczak.

Meanwhile, UnionBank president and CEO Edwin Bautista said, “The addition of world-class talents in our pool reinforces our strategy to future-proof the organization and our business as we prepare for many new opportunities that come with the changing times.”

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Banking

It’s all relative: Older generations feel helping out the family financially is more important since the Covid-19 outbreak

It’s all relative: Older generations feel helping out the family financially is more important since the Covid-19 outbreak 1

Before Covid, 23% of people prioritised helping younger generations out financially, that increased to a third as a result of the pandemic

A recent survey* conducted by Hodge has revealed that the Covid pandemic has led to more people wanting to help younger family members financially.

A third (31%)** of those questioned said that since the Covid outbreak giving a financial gift to children or grandchildren is more important to them, compared to 23% who said it was a priority before the pandemic.

The traditional “Bank of Mum and Dad” is still very much open for financial help, with parents being responsible for 72% of the gifts, but the study also revealed that financial gifts can come from all corners of the family – including children (14%) and siblings (14%).

The survey also found that a third of people have received a financial gift from family, with those aged between 25-34 as the most likely to receive

The most popular reason for gifting money to family is for special occasions such as a quarter of gifts were given for weddings and birthdays but 11% of people have received money to help with big purchases such as cars and houses. In addition, 19% of people have received help with day to day finances, with around 14% of those receiving a gift have done so to pay off debt.

Emma Graham, Business Development Director at Hodge, said of the research: “Our study showed that, as a nation, we all want to help our family out when it comes to money. And whilst we all think of the Bank of Mum and Dad or Gran and Grandad as a traditional source, we were surprised to see that 14% of brothers and sisters are also helping out.”

The findings come from a recent intergenerational study conducted by Hodge, who interviewed over 3000 people about their attitudes towards finances and their aspirations for the future. The full research findings can be found at https://hodgebank.co.uk/2020/05/19/money-its-all-relative/.

As part of the study, people were also asked about paying back the gift, with 40% of beneficiaries expecting to pay their parents back, but this dropped to 28% if the gift came from grandparents.

From the gift donor’s perspective, 26% expect the gift to be paid back, however just 15% of grandparents expected the money back.

Hodge has produced a set of guides on how families can navigate the tricky subject of giving financial gifts within a family, as well as the considerations and steps that be families should think about taking before a gift is given, such as is it a loan or a gift and thinking about contingencies if the family member’s circumstances change. The guides can be found here: https://hodgebank.co.uk/news/

Emma continued: “It’s clear that families feel strongly about offering financial support to each other if they are able and this has increased since the Covid pandemic. Before Covid, 23% of people prioritised helping their families out financially in the next five years. Since the Covid-19 outbreak that has increased to a third of people saying helping a family member financially had become more important.

“So, it is clear that the Covid-19 lockdown and subsequent predicted economic downturn, has led to more families looking to share wealth to help younger children or grandchildren during this difficult time. Many people may look to Later Life mortgages, where many products have reduced their rates and have flexible lending criteria, to help out a loved during these difficult times.”

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Banking

New report identifies the factors which will determine SMEs’ chances of a successful COVID recovery

New report identifies the factors which will determine SMEs’ chances of a successful COVID recovery 2

·         Analysis of the performance of over 1,000 UK small and medium-sized businesses by Allica Bank provides roadmap for SMEs 

·         Regular training, an openness to innovation, and a clear vision all contribute heavily to an SMEs’ chances of success  

·         Allica Bank has launched a programme of free workshops to expand on the findings and support business owners 

Business bank, Allica Bank has combined data and insight from over 1,000 UK SMEs with a multiple regression analysis to determine what factors most closely aligned with an SMEs’ chances of success and separated the highest-performing businesses from their peers. These ‘rules for success’ have been compiled from the research data to support British businesses as they look to chart a course to post-Covid recovery.  

The full report identifies six behaviours for small and medium businesses to follow, to maximise their chances of a successful COVID recovery. The six top-line rules emphasised by the data were: 

Rule 1: SMEs should regularly train staff 

Of the top-performing businesses analysed, 47% provided training for employees at least on a quarterly basis, compared to just 32% of other businesses. Regular employee training was linked closely to success by the model.  

Despite this, many small businesses have neglected training and nearly half (46%) of the small businesses analysed only provide training for employees about once a year or less often. This included 15% that never provide employer-funded training. This discrepancy could represent a significant opportunity for small businesses to unlock the potential of their employees and thrive in the post-Covid economy. 

Rule 2: SMEs need to focus on innovation and technology 

Looking again to the best performing businesses, 76% were found to either continually (39%) or often (37%) be considering new opportunities for technology in their business. This is compared to only 51% for businesses considered to be outside of the top ranks, out of which only 27% admitted to continually looking for new technology opportunities. 

Rule 3: Small business must have a formal, long-term vision  

Nearly two thirds (66%) of the most successful businesses in the survey had a formal, long-term vision, compared to just 50% of businesses outside the top 100. Looking to the businesses that scored the lowest on the SME Performance index, only 37% claimed to have a formal, long-term vision. 

Rule 4: SMEs should broaden their customer reach and find new markets 

Of the top-performing businesses, 65% of these have overseas customers compared to just 40% of the worst performing businesses. Among the best performing SMEs, over a third (34%) identified international expansion as one of the top three drivers for their success. 

Rule 5: SMEs need to develop reinvestment plans 

22% of the best performing SMEs reinvested some of their profits into the business in the past three years with an average 9% of profits being redeployed. Tellingly, this is nearly double what other businesses admit to reinvesting in their business (5%). 

Rule 6: SMEs should engage with local business organisations and networks  

Of the top 100 SMEs, 30% had obtained external credit to expand over the past three years (compared to 24% of other businesses). Meanwhile, only 16% of all other SMEs had engaged with local enterprise partnerships or growth hubs in the past three years (compared to 23% of the top 100 SMEs). 

Chris Weller, Chief Commercial Officer, Allica Bank, said: 

“All small businesses are different, as are all small business owners, but one trait they share is an innovative resilience. Whilst the coming months and years will undoubtedly continue to present extreme challenges, there is no doubt that small and medium sized businesses across the UK will rise to meet them head on.  

“To give them the best chance to succeed, though, they need to be equipped with the right tools. There is certainly no silver bullet or panacea for every small business, but as this study has found, there are a number of common factors found in the most successful businesses that allow small enterprises to thrive and that they can consider individually for their business.  

“This research has identified common ‘rules for success’ that speak to every aspect of running a business, not just the financials. Once we saw these results, we wanted to use them to help small businesses begin to re-build and prosper, by outlining common factors and then examining how best they can be practically applied to businesses in all sectors of the economy.  

“Small business owners and their employees have been hit hard by the crisis, but they have the drive and resourcefulness to breathe new life into the economy and bring energy to post-Covid Britain. Our commitment at Allica Bank is to give them the support they need to do so, every step of the way.”

The full report contains a wealth of additional data and insight into each of these topics. As part of its mission to empower small businesses, Allica Bank is making the findings freely available and running a series of free online workshops with relevant partner organisations for businesses to attend.

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