As a consequence of the coronavirus, over the next three years, the average growth of the global cybersecurity market is expected to slow down to a rate of 6.2% per year, says the Global Cyber Security Market Analysis report released last year.
The predicted trend represents a sharp decline from the impressive growth reported in 2019, before the pandemic. More so, cybercriminals continue to cash in on the crisis, taking advantage of the redirected focus of companies and individuals to the prevailing health threat.
COVID-19, Global Economy, and Its Impacts on Cybersecurity
Most of the economic impacts of COVID-19 on cybersecurity are related to businesses. Due to restrictions concerning physical spaces, many companies have had to unexpectedly move the entirety (or a substantial part) of their operations online.
Below are ways COVID-19 undermines the most recent advancements in cybersecurity, curtailing development. More importantly, this piece explores solutions and mitigation strategies to ensure cybersecurity steadiness in the face of adversity.
Let’s consider some certain aspects of the economy that have seen cybersecurity incidents increase due to COVID-19.
The hurried nature of such migrations has opened such businesses up to threat actors who have wasted no time in preying. Most affected are the SMEs; many of them were ill-equipped for digital operations but had to adapt or face business closure grudgingly.
Even before the pandemic, SMEs have regularly been targets of cyberattacks. Verizon’s 2019 Data Breach Investigations Report stated that 43% of cyber attacks targeted small businesses. With the crisis lingering, SMEs have had their resources strained as cyber attackers threaten to bring down a significant section of the economy.
Even large organizations have had their cybersecurity limits tested by the spate of cyberattacks. The additional pressure on cybersecurity teams and equipment imposes new challenges on detection and response speeds.
As Mckinsey reported, the crisis has forced many organizations to alter their priorities and budgets. The effects of these have already spilled over into 2021 budgets and would reflect in spending. Businesses (large and small) expected to see increased cybersecurity spending over the next twelve months are spread over the healthcare, finance, tech, and media sectors.
Supply Chain Risks
Another significant way COVID-19 is impacting the global economy cybersecurity-wise pertains to supply chains. For instance, the fragmentation of supply chains in the automotive industry has complicated cybersecurity monitoring. Without a concrete plan to close new vulnerabilities, the industry’s progress in the connected car sector stands at risk of being curtailed. Government regulations have helped in this regard.
Financial Services Sector
Likewise, COVID-19 has heightened the cyber vulnerabilities of firms in the financial services and banking sector. Says a recently published report by Bank for International Settlements, Outside the health sector, the financial sector has the largest share of cyber events classified as Covid-19-related in recent months.
For one, banks have had to tighten their security measures upon the rise in phishing threats. And both customers and staff are affected. As KPMG reports, banks, despite their sophisticated IT systems, sometimes have relaxed control for employees working remotely who lack tools to collaborate remotely.
Curbing the Impacts of COVID-19 on Cybersecurity
As we continue to battle the pandemic, businesses should prioritize maintaining normal business operations in the war against cybercriminals.
For cybercriminals, business disruption is an opportunity to launch attacks once priorities are realigned or confused. Don’t give them a chance. Establish baseline security requirements and dedicate the best effort to protecting those. IT teams mustn’t lose their priorities.
For many SMEs going (fully) remote for the first time, their employees would probably be using unfamiliar tools. By improper handling, misconfiguration, or other means, they may inadvertently open up the company to cyber threats. Employees should receive thorough training when the company is pivoting to a new collaboration tool.
Also, companies should revamp their threat response protocol or create one. Responding to cybersecurity threats and incidents requires a collaborative effort. There is the risk of physical distance translating to an organizational disconnect, further slowing down decision-making in response situations. Adapting response protocols to new operational models is a proactive step to resolving such issues.
These are times of uncertainty. There is no sure end in sight for this pandemic. Even if there was, work and operations might not go back to their former state again. Coronavirus may have altered how we work forever. In light of this, companies need to reassess their existing cybersecurity protocols, tightening remote access management and endpoint protection.
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Fintech Kennek raises $12.5M seed round to digitize lending
London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.
According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.
The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:
“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”
The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:
“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”
The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.
The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.
Featured Image Credit: Photo from Kennek.io; Thank you!
Fortune 500’s race for generative AI breakthroughs
As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.
Goldman Sachs’ Cautious Approach to Implementing Generative AI
In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.
According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.
One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.
To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.
Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.
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UK seizes web3 opportunity simplifying crypto regulations
As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.
Streamlining Cryptocurrency Regulations for Innovation
To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.
The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.
Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.
The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.
Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!