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Budgeting cyber spend in a recession



by: Tim Wallen, Regional Director, UKI & BeNeLux, for Logpoint


Justifying investments in an economic slump is no easy task.

As the regional director of the UK, US and Emerging Markets at Logpoint, I’m witnessing the struggles that security leaders are facing in swaying the C-suite and board members towards financing modernised security solutions first hand.

It’s unfortunate, yet the reality is that many organisations are focused on cost cutting right now, and there is little room to expand departmental budgets as businesses seek to control spend.

Looking at the UK, Bank of England rate-setters expect GDP to shrink by roughly 1% through 2023 and Q1 2024, making it the only G7 country that is expected to suffer a recession in 2023. This aligns with the International Monetary Fund’s forecast, which also expects UK annual GDP to contract by 0.6% as a result of higher taxes, rising interest rates, high energy costs and lower government spending.

Interestingly, business leaders are demonstrating awareness of the need to secure the enterprise against new and evolving threats. However, responsibility for security continues to lie mostly with IT leadership.

This is according to Gartner’s 2022 Board of Directors Survey, which revealed that while 88% of boards of directors see cybersecurity as a business risk as opposed to a technology risk, just 12% have dedicated board-level cybersecurity committees.

Resultantly, cybersecurity often remains the sole preserve of the chief information officer (CIO) or chief information security officer (CISO).

Tim Wallen

Given the clear merits of security investments, this is unfortunate. Indeed, according to the 2022 IBM Cost of a Data Breach Report, organisations with fully deployed security AI and automation save as much as $3.05 million per data breach compared to those without – a 65.2% difference in average breach cost.

However, being unlikely to be awarded any budgetary boosts given current financial constraints and a lack of representation at the board level, CISOs should not be focused on arguing the case for greater investment, but instead considering how they can optimise spend to make the most of every pound, dollar or euro that is put forward for security purposes.

Embracing meta-analysis, modern SIEMs, UEBA and SOAR

Here, meta-analysis stands as an attractive option.

As automated solutions have become increasingly commonplace in the toolboxes of security teams, businesses have sought ways in which to evaluate the effectiveness of these relatively novel solutions and assess the value of their investments.

This is exactly what meta-analysis offers. In enabling the analysis of data from incidents, it can help CISOs to measure and compare the effectiveness of their security controls against other organisations, benchmark their suite of solutions, and even measure return on investment.

There is no question that meta-analysis will become increasingly relevant as security teams continue to lean more heavily on automation – a trend that is anticipated to continue throughout 2023. Indeed, according to Forrester, replacing legacy SIEMs with modern alternatives that are better equipped to seamlessly analyse security behaviour is a leading cyber priority for this year.

With this in mind, I expect focus to grow on converged security setups that combine the SIEM with automated solutions, such as user and entity behaviour analytics (UEBA).

Specifically, UEBA is designed to aid analysts in more easily detecting, prioritising and managing behavioural anomalies through the automated development of tailored security detection plans. It works by building baseline parameters of ‘normal’ behaviour for all network users so that any potentially abnormal or risky actions or activities are automatically flagged to the SOC.

I also expect security orchestration, automation and response (SOAR) to see increasing adoption in tandem with the shift to modernised SIEMs, this being an incident detection and response solution focused on alert aggregation and prioritisation.

Similarly, SOAR is designed to accelerate threat investigation and remediation. By automatically correlating and analysing data before presenting key contextual information and intelligence transparently to security teams, they’re able to respond quickly and effectively in an informed manner.

Opting for a converged security setup

From enjoying better detection and response capabilities to improving behaviour modelling and better protecting siloed business critical applications like SAP, there are several merits of embracing automated security solutions.

However, the way in which these are adopted needs to be carefully considered. Critically, I advise that organisations integrate their solutions in a converged security setup in order to eliminate the potential complexities that could arise from managing siloed products.

Not only will this help to reduce the burdens on overstretched security teams, providing them with a single, centralised platform to navigate. Equally, it will help to improve security outcomes, ensuring they can more easily identify high-value alerts and use data to optimise the efficacy of the broader security infrastructure.

At the same time, converged security platforms can also help to nullify the cost-related concerns surrounding spiralling data volumes.

Indeed, limiting the amount of data coming into the system almost never makes sense in a security context, yet given the current economic climate, firms may consider doing so in order to prevent costs from cascading as threat intelligence data streams expand.

This can, of course, help to ease financial worries. However, it will ultimately open up customers to potential security blind spots that can leave vulnerabilities exposed and impede overall objectives.

Converged security setups can help to free security teams from being stuck between this proverbial rock and hard place. By offering transparent insights into exactly how often each individual solution is used, overall cost and use can be more easily managed and monitored, helping to determine relevancy, importance and total cost of ownership, ensuring firms are only ever spending on those services that truly add value.

For these reasons, any organisation opting to pivot its security strategy towards investments in automated solutions needs to do so in a converged manner. Not only can it paint a much fuller security picture, but it can help to ensure investments in each individual tool is maximised, allowing for spend to be prioritised during tough financial times.  


Building towards an inclusive financial future



By Catharina Eklof, CCO of IDEX Biometrics


From the visually impaired to displaced migrants, the unbanked, and people living with dementia – a burgeoning financial gap exists across many areas of society. In fact, as of late 2021, almost one-third of adults around the world were reported as unbanked according to the World Bank Group. That’s around 1.7 billion people – with half coming from the poorest 40% of the world’s population. Being financially excluded in this way means not having access to common financial services including savings accounts, loans, a credit rating, or even a bank account. Those who are awaiting clearance to join a country’s financial ecosystem, such as migrants, are also finding themselves left behind by the modern financial infrastructure.

As societies reliance on digital and contactless transactions over cash continues to grow, this financial gap is only set to widen. In less than 10 years, the share of Americans not using cash for payments has increased by double digits, reaching 41%. By 2031, cash payments are expected to make up only 6% of all transactions.

Fortunately, biometric smart cards can bridge this gap for people in the Global South, migrant populations, as well as those with visual or cognitive disabilities worldwide, who deserve to feel secure, included, and independent.


The challenges surrounding passwords

 COVID accelerated the transition from cash to contactless payments and the use of digital wallets, creating a challenge for many. By 2024, it is expected that digital wallets and cards will account for 84.5% of all e-commerce spend.

Digital transactions traditionally rely on the use of PINs that can easily be forgotten, as studies have found that we manage 100 passwords on average across various sites and services. In the US alone, consumers report relationships with more than three financial institutions and have more than four accounts per household. The challenge of password recollection is only growing. To counter rising cybersecurity threats, several countries now mandate two-factor authentication for retailers and service providers, creating further complexity.
However, organizations are responding to financial exclusion. Card provider Mastercard introduced its contactless PayPass offering, as well its Touch Card developed alongside Amjan Bank which enables the visually impaired to distinguish between their cards. Both look to provide a better customer experience for people struggling with the digital changeover. For those living with dementia, Mastercard has also partnered with Sibstar and the Alzheimer’s Society to create a specific card where limits, transactions, top-ups and notifications can be viewed and managed via a complementing app. Likewise, Turkish neo bank Papara introduced a Bluetooth debit card that provides visually impaired users with audio prompts when making payments.


Protecting the visually impaired

There are at least 2.2 billion visually impaired people globally. In 2019, it was found that 89% of visually impaired have been victims of fraud or have made errors when paying for goods and services. This figure comes prior to the pandemic, and the proliferation of digital transactions, suggesting an even bigger concern today.

PINs present an obvious security issue for this demographic, with others able to oversee their inputs and then manipulate them. Contactless payments go some way to solving that problem but pose the risk of fraud as there is no PIN verification below the increasing threshold amount, now at £100 in the UK, where the average annual wage is £27,756. In India, where the average annual wage is 9,45,489 rupees (roughly £9000), contactless limits are set to 5000 rupees (£48). Many accounts also require visual-based inputs to prove identity, such as CAPTCHA, proving as a barrier for the visually impaired.

Enhancing awareness on a regulatory level is key for driving change and reassuring vulnerable groups. The EU Accessibility Act is an example of how payment service providers are obliged to comply with accessibility standards. This includes making interfaces perceivable, operable, understandable, and robust, to ensure that individuals with disabilities can effectively navigate payment interfaces.


Paving the way with biometrics

 Including braille on cards for easy identification is a crucial step for the visually impaired. This can also be used on biometrics smart cards, with sensor textures to confirm the user has selected the correct method of transacting. Not only do these cards provide convenience and inclusivity, but they also promote ultimate security by linking a person’s identity directly to their fingerprints. This data is encrypted within the card itself, reducing any concerns surrounding fraudulent behaviour or of data being lost via a centralized breach or large-scale hack.

In this context, biometrics can be used to serve the unbanked and those currently unrecognized within national infrastructures. South America is an example of an early adopter of biometrics, turning to the solution to cope with swelling population sizes, and the challenges associated with accessing proof of identity when setting up traditional bank accounts. Meanwhile in India, pension payment fraud has dropped by 47% thanks to bypassing the need for prior credit ratings or credentials.

Liveness detection, however, which ensures the biometric sensor is reading a true biometric source (rather than a false or recreated image of one), is vital to the success of financial aid programs globally. Securing remittances through biometric authentication ensures transparency and better fund control. Directing funds to cold wallets or biometrically authenticated cards can also improve program efficiency, safeguarding the interests of individuals and communities.

Overall, the biometrics market is expected to grow to US$87.4 billion by 2028, at a CAGR of 17%. Whilst its value as a simple and secure method of transacting is growing substantially, you can’t put a price on its impact on those who have so-far fallen through the gaps of finance’s digital revolution.

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Euro deep tech M&A deal value expected to reach $20bn+ in the next 15 months



Written by Oliver Warren, Associate at DAI Magister


Investment in European deep tech has mirrored the broader decline in the technology sector; it has halved since the peak of 2021’s boom, reflecting investor preferences for ventures with lower capital expenditures and associated risks. Start-ups within the following verticals: Health and Bio, Transportation, Energy, and SaaS and AI experienced the most significant drops.

However, Dealroom data shows stark differences in funding for deep tech start-ups at the early, breakout (Series B & C), and late stages. After experiencing a modest deceleration between 2021 and 2022, early-stage deep-tech fundraisings have been surprisingly healthy, bucking the market trend, due in part to the hype surrounding Generative-AI and in Q1 2023 they received the highest infusion of capital for over a year.

However, this positive trend conceals a sharp decline in B and C round fundraises, which have seen investment activity plummet to $1 billion in Q1 2023 from a peak of $3 billion in Q1 2022. Late-stage rounds (>$100M) have also experienced massive declines, falling almost 70% from $2 billion in Q1 2022 to $634 million in Q1 2023.


$20bn+ worth of deep tech M&A in the next 15 months alone

While venture capital continues to show interest in the sector, the retreat of growth investors and the genuine prospect of a prolonged down cycle ahead has left growth-stage deep tech companies needing to implement stringent cost-cutting strategies to curtail expenses and extend their runways. But even those fortunate enough to have secured inflated funding rounds during the exuberant market conditions of 2021 will soon need additional investment.

Deep tech companies typically have high burn rates due to their heavy focus on research and development, requiring funding approximately every two years on average. With dwindling access to VC cheques, a non-existent IPO market, and practical limits to self-sufficiency, M&A is already emerging as a valid route to realising substantial profits for investors and founders, even if it doesn’t deliver the lofty $1bn+ valuations seen in 2021.

We’re already seeing more companies take this route. European deep tech M&A activity has rebounded to levels not seen for years and across our focus verticals, spanning Advanced Materials, Space, AI & ML, Cybersecurity, and Robotics, European M&A transactions have already rebounded to surpass 2020 levels (183 this year, annualised versus 176 in 2020), with some notable exits such as InstaDeep’s sale to BioNTech and SLM Solutions metal 3D printing business being acquired by Nikon.

In 2024, we forecast 250+ M&A deals in European deep tech, with at least 20 above $100m, making it the strongest M&A year since 2016. A key driver of this resurgence is the substantial increase in established deep tech companies across Europe, with many more companies fielding 100+ employees and sizeable, valuable engineering teams. The funding-driven growth in the size of European deep tech companies now makes many more sizeable, more strategic targets for international acquirers.

Overall, we anticipate the remainder of 2023 and 2024 will be banner years for European deep tech M&A, with potential deal value reaching $20 billion or more in the next 15 months alone.



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