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Why insider threat presents a big risk to financial services organisations

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Why insider threat presents a big risk to financial services organisations 1

By Adam Strange, HelpSystems

In today’s highly regulated environment, financial services organisations are trusted with far more than just money; they are also responsible for keeping customers’ highly sensitive personal and financial data secure. And privacy legislation, such as GDPR and CCPA, has come into force to ensure that they are doing this diligently. Likewise, with the all the publicity we’ve seen around data breaches, as individuals, we are far more aware of the growing value of our data and the need to protect it. So, unfortunately, are cybercriminals, which means financial organisations are prime targets for malicious cyberattack. However, this isn’t the only threat they face. In fact, not a day passes without these firms’ own employees putting data at risk.

Insider threat cited as having the potential to cause a lot of damage

When it comes to reducing overall breach risk, it is easy to assume that employees represent low-hanging fruit – based on the premise that it is easier to control the actions of a company’s own employees than it is to defend against external attackers. However, here at HelpSystems we have recently undertaken some research, interviewing 250 CISOs and CIOs in financial institutions about the cybersecurity challenges they face. And the reality is that insider threat – whether intentional or accidental – was cited by more than a third (35%) of survey respondents as one of the threats with the potential to cause the most damage in the next 12 months. Likewise, phishing emails were cited by 20% of survey respondents. Add these two together and you can start to get a picture of the challenge these internal employee-centric risks present for financial services firms – perhaps a far bigger one than the external threat. While external attackers are always motivated by malicious intent, the employee population is far more mixed, and motivations are a grey area where the reasons behind breaches, whether through simple human error or deliberate actions, are harder to determine. This makes understanding, and mitigating, insider risk a far more problematic exercise.

Misdirected emails are also a big risk

At the same time, the latest Information Commissioner Office (ICO) report has just been published and the data confirms that misdirected email remains one of the UK’s most prominent causes of security incidents. This report further demonstrates the need for all organisations to control the dissemination of their classified data as it states that misdirected email is, alarmingly, a 44% bigger risk to organisations than phishing attacks.

This is yet another area where organisations must ensure their data protection policies are robust enough to not only protect themselves but also their employees from the seemingly simplest of mistakes. Again our research showed that increased remote working practices was a cause for concern, with 36% stating that they saw it as a cybersecurity threat with the potential to cause significant damage. Therefore, what remains paramount is that organisations provide their employees with the technology tools necessary to prevent the simple human errors that have the potential to result in data loss, and as a consequence, severe financial and reputational damage.

Understanding what protection your data requires

Clearly, it is crucial that financial services organisations shift the dial on insider risk and reduce breach frequency, because the penalties for failing to do so are becoming increasingly draconian, and the repercussions from customers much more severe. But put simply, before you can defend, you need to know what protection your data requires and you need to know what you’ve got, where it’s stored, why you have it and who has access to it. Once you’ve got to grips with that, you can identify what is of true value to the organisation – what’s business-critical and what’s sensitive – and then how best to treat it. In order to do that you need to think about what the impact would be if a piece of information was leaked or lost. If it was made public, would it harm the business, your customers, partners or suppliers? Would it put an individual’s security or privacy at risk? Would you lose advantage if a competitor got hold of it? Is it subject to any privacy or data laws, or regulatory compliance?

While this all sounds relatively straightforward, data visibility was another problematic area and subsequent threat emphasized in our research. Data visibility and knowing what data is where and who has access to it was highlighted as having the potential to cause the most damage by 14% of our survey respondents. Combine this with internal cybersecurity fatigue, which more than a quarter (28%) cited as potentially damaging, and you can start to appreciate the importance of providing tools and awareness training to help prevent those easily avoided mistakes from happening in the first place.

Employees need tools, training, education and the right culture

As I mentioned, it is a complex problem without a simple answer and this is where employee education is key.  Employees play a vital role in ensuring the organisation maintains a strong data privacy posture. For this to be effective, organisations need to ensure that they provide regular security awareness training to protect sensitive information. In terms of how they go about doing this, they must invest in user training and education programmes. Users are your most important security resource, so train them to be an asset rather than a liability. Users should be a critical part of an organisation’s security posture, not excluded due to the associated risks.

Likewise, the security culture of the firm must be inclusive towards employees, making sure they are continually trained so that their approach to security becomes part of their everyday working practice and security is embedded into all their actions and the ethos of the business.

How data classification can help

One way to do this is through the implementation of data classification tools, which not only help organisations to protect their data by putting the appropriate security labels on it, but also help educate users to understand how to treat different types of data with different levels of classification and sensitivity. Here at HelpSystems our data classification solution enables users to classify both their emails and documents according to their sensitivity, using both visual and metadata labels. Once labelled, data can be controlled to ensure that emails, documents and files are only sent to those you want to receive them, protecting your sensitive information from accidental loss.

It is technology like this that leaders within financial services organisations should have in place to protect their employees, prevent misdirected emails, the inadvertent sharing of documents and files and ensure that the organisation is complying with data protection legislation. Remote working is likely to remain, regardless of any future regional or national lockdowns, therefore, making sure that employees have the tools to prevent mistakes and the accidental sharing of data is going to be more important now than it has ever been. The place to start is making sure that any data is appropriately labelled, so that the employee knows how it should be handled.

Business

Stocks tumble on recovery fears; dollar climbs

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Stocks tumble on recovery fears; dollar climbs 2

By Rodrigo Campos

NEW YORK (Reuters) – Stocks fell around the world on Wednesday as investors turned more cautious over stretched valuations and the economic impact of the COVID-19 pandemic, while the dollar rose on its safe-haven appeal.

Oil prices were little changed as demand concerns were mostly offset by a large drop in U.S. crude inventories.

Stocks in the United States added to losses after the Federal Reserve left its key rate near zero and made no change to its monthly bond purchases, while flagging a potential slowdown in the pace of the economic recovery.

Wall Street had been weighed earlier by a slump in Boeing Co and by hedge funds dumping long positions to cover a short squeeze in GameStop Corp and AMC Entertainment.

“Fears are circulating that some investment funds might be quickly closing out positions as a way of shoring up their cash,” said David Madden, market analyst at CMC Markets UK.

“It is early days yet but we might see selling pressure ramp up for fear there could be a stampede for the exit.”

The Dow Jones Industrial Average fell 2.05%, the S&P 500 lost 2.57% and the Nasdaq Composite dropped 2.61%.

MSCI’s benchmark for global equity markets fell 2.04% to 652.5, while its index for emerging markets stocks fell 1.25%.

The pan-European STOXX 600 index lost 1.16% after the German government slashed its growth forecast for this year, while talk of further interest rate cuts by the European Central Bank hit banking stocks and the euro.

In currency trading, the dollar index rose 0.47%, with the euro down 0.4% to $1.2111.

“I think if anything the dollar is finding support from the Fed’s more cautious message,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

“I would say that the Fed having noted the recent moderation in the pace of the recovery is adding to concerns about the near-term outlook. The risk-off move today has gained traction in the Fed’s more cautious outlook for growth.”

The Japanese yen weakened 0.47% versus the greenback at 104.09 per dollar.

In emerging markets, currencies in Russia, Brazil, Mexico, and South Africa all lost over 1% on the day versus the greenback.

U.S. Treasury yields slid in line with weaker stocks as risk appetite hit a wall.

“(The Fed) did sound a little bit more downbeat, a little bit more concerned about the pace of the recovery and the pace of progress on vaccinations as well,” said Gennadiy Goldberg, senior U.S. rates strategist at TD Securities in New York.

“I think it’s meant to convey that they still realize there’s still quite a bit of weakness and that we’ve a long way to go before the recovery really takes off.”

Benchmark 10-year notes last rose 9/32 in

price to yield 1.011%, from 1.04% late on Tuesday.

Graphic: Fed Balance Sheet https://fingfx.thomsonreuters.com/gfx/mkt/xegvbeqrdpq/FedBalanceSheet.png

In commodities markets, oil prices were little changed despite a massive drawdown in U.S. crude inventories, as ongoing concerns about the coronavirus pandemic tempered buying interest.

Brent crude futures fell $0.42 to $55.49 a barrel. U.S. crude futures slid $0.04 to $52.57 a barrel.

Gold prices fell, pressured in part by the dollar strength.

Spot gold dropped 0.5% to $1,841.13 an ounce. Silver fell 1.13% to $25.16.

Bitcoin last fell 3.91% to $31,234.68.

(Reporting by Rodrigo Campos; additional reoirting by Herbert Lash, Laila Kearney, Gertrude Chavez-Dreyfuss, Chuck Mikolajczak and Karen Brettell; Editing by Matthew Lewis)

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Oil prices end mixed, despite big U.S. crude stock drawdown

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Oil prices end mixed, despite big U.S. crude stock drawdown 3

By Laila Kearney

NEW YORK (Reuters) – Oil prices were little changed on Wednesday, despite a massive drawdown in U.S. crude inventories, as ongoing concerns about the coronavirus pandemic tempered buying interest.

U.S. crude oil stocks dropped by nearly 10 million barrels last week to their lowest levels since March, surprising the market, which was looking for a modest increase in stocks. [EIA/S]

“The market was led up by a significant draw in crude oil as the refining industry continues to turn the crude oil surplus into refined products,” said Andrew Lipow, president Lipow Oil Associates in Houston.

U.S. West Texas Intermediate (WTI) crude futures settled at $52.85 a barrel, rising 24 cents, while global benchmark Brent crude futures fell 10cents to end at $55.81 a barrel.

Also helping oil was the U.S. Federal Reserve’s decision to stick to its dovish tone and leave its key overnight interest rate near zero to maintain monetary support until there is a stronger rebound from the pandemic-triggered recession.

The rising number of global coronavirus cases, which has surpassed 100 million as infections surge in Europe and the Americas, while Asia scrambles to contain fresh outbreaks, weighed on prices.

“Demand concerns should remain with us for some time,” Eugen Weinberg of Commerzbank said.

China, the second-largest oil consumer, has recently seen a coronavirus resurgence. Official Chinese data showed 75 new confirmed cases of COVID-19 on Wednesday, the lowest daily rise since Jan. 11.

Analysts said prices could benefit from lower U.S. oil production as a result of stricter industry regulations by the Biden administration, which on Wednesday paused new oil and gas leases on federal land and cut fossil fuel subsidies as he pursues green policies.

“We’re going to be watching these production numbers to see if U.S. oil producers can overcome a tougher regulatory environment and a tougher funding environment and raise output,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

(Additional reporting by Alex Lawler in London, Roslan Khasawneh in Singapore, Sonali Paul in Melbourne and Scott DiSavino in New York; Editing by Marguerita Choy and Alexander Smith)

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Dollar rises on risk aversion, Fed cautious on economic recovery

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Dollar rises on risk aversion, Fed cautious on economic recovery 4

By Saqib Iqbal Ahmed and Karen Brettell

NEW YORK (Reuters) – The dollar was boosted by safety buying on Wednesday as investors turned more cautious on worries about the economic impact of the COVID-19, and after the U.S. Federal Reserve expressed concerns about the pace of the economic recovery.

Stocks and Treasury yields slipped while the safe-haven U.S. dollar drew buyers. [.N]

“There are a lot of concerns about the effectiveness of the vaccine roll out in the United States,” said Minh Trang, senior FX trader at Silicon Valley Bank. “Today is a solid risk-off day for sure.”

The Federal Reserve left its key overnight interest rate near zero and made no change to its monthly bond purchases, pledging again to keep those economic pillars in place until there is a full rebound from the pandemic-triggered recession.

That has not happened, and the Fed in a policy statement flagged a potential slowing in the pace of the recovery.

“If anything the dollar is finding support from the Fed’s more cautious message. I would say that the Fed having noted the recent moderation in the pace of the recovery is adding to concerns about the near-term outlook,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

Global coronavirus cases surpassed 100 million on Wednesday, according to a Reuters tally, as countries around the world struggle with new virus variants and vaccine shortfalls.

The U.S. Dollar Currency Index gained 0.53% to 90.636, after earlier reaching 90.896, its highest level since Jan. 18.

The euro was 0.48% lower on the day at $1.2101.

The single currency was further pressured after the German government on Wednesday slashed its growth forecast for Europe’s largest economy to 3% this year, a sharp revision from last autumn’s estimate of 4.4%, caused by a second coronavirus lockdown.

The risk-sensitive Australian dollar sank 1.08% to $0.7664 after earlier falling to $0.7642, the lowest level since Jan. 4.

Silicon Valley Bank’s Trang cited the historically elevated level of bearish bets against the greenback as part of the reason for the U.S. currency’s strength as investors rush to trim those wagers.

Despite the dollar’s recent rebound from multi-year lows, bearish bets on the U.S. currency are at a decade-high.

“Anytime you see that kind of buildup and you see a certain reversal, you will see a substantial move,” Trang said.

Sterling rose to a fresh eight-month high against the euro on Wednesday as Britain’s faster COVID-19 vaccine rollout than the European Union’s offered support to the pound.

Meanwhile bitcoin fell in a volatile session and slipped below $30,000 for the first time since Jan. 22. It later recovered to $30,686, down 5.59% on the day. It is down 27% from a record $42,000 reached on Jan. 8, but up around 174% since its recent run up began in mid-October.

(Reporting by Saqib Iqbal Ahmed and Karen Brettell in New York; Editing by Matthew Lewis)

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