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THE THREAT OF CYBER SECURITY BREACHES AND WHY BUSINESSES ARE PLAYING CATCH-UP WHEN IT COMES TO PROTECTION?

CYBER SECURITY

Graham Wedgbury, cyber insurance specialist at Lycetts

 

Cyber security is experiencing an expeditious climb up the business agenda, thanks chiefly to more stringent data protection laws and in response to the omnipresent and ever-evolving threat of attack.

Despite an increase in awareness and a general shift from reactive to proactive security measures, many businesses are still playing catch-up when it comes to protection.

The somewhat ‘invisible’ threat of cyber breaches or attack is still a relatively new concept for businesses, so traditional business risks may still take precedence and priority – resulting in a reticence to redirect resources and invest in defences.

But as technology continues to develop at an exponential rate, so too do the opportunities to exploit vulnerabilities, extort funds and expose businesses. In essence, the more we take advantage of the growing technologies to make our business run smoothly, the more vulnerable we become to over-reliance on those very systems should they fail.

According to the Mandiant M-Trends 2020 report, cyber criminals are becoming more innovative and varied in their approach, with 41% of the malware families observed in 2019 identified as new.

The report also found that the discovery time – the duration between the start of a cyber intrusion and it being identified – was 56 days.  Though an improvement, thanks largely to law changes in Europe, 12% of investigations continue to have discovery times of greater than 700 days.

The report also highlighted the need for vigilance, particularly in the case of businesses who have been previously attacked, with one third (31%) of victims experiencing another attack within 12 months.

In this digital age, businesses can ill-afford to take a fragmented, disjointed or lacklustre approach to cyber security and should remember that fulfilling legal requirements and having a holistic cyber security strategy are not one and the same.

CYBER SECURITY

Graham Wedgbury

The rise in remote working, cloud computing and BYOD, along with more sophisticated and less easily detectable methods of attack, from phishing to malware, further compounds businesses’ exposure to cyber risk and underlines the need for more robust measures to prevent a breach and a plan of action should it occur.

 

SMEs don’t ‘fly under the radar’

A common misconception when it comes to cyber security is that some businesses are too small or insignificant to suffer an attack or be a target.

Almost one quarter, (23%) of UK businesses have no governance measures, such as cyber security policies, an external cyber security provider, staff members covering information security or governance, or a business continuity plan, according to the UK government’s Cyber Security Breaches Survey.

The most common reason given is that they consider themselves too small or insignificant to warrant such measures (35%), followed by cyber security not considered being enough of a priority (21%), and not considering cyber-attacks to be a significant risk (19%).

However, being a small operation has no bearing on vulnerability.

Most companies are in the same situation, with SMEs making up 90% of businesses worldwide (World Bank).

The very fact that smaller businesses are less likely to take cyber security seriously could make them an attractive target.

It would also be remiss to dismiss cyber security on the basis that it is not relevant – be it on size or nature of the business.

Companies may see themselves as ‘offline’ but, according to a study commissioned by Deloitte, 99% of SMEs say they use at least one digital tool in their day-to-day operations.

From using a computer to operate, and having a company website, to storing data in the cloud, or using employee email addresses, there are a great number of seemingly ‘innocuous’ cyber risks that leave businesses exposed and vulnerable.

Businesses should remember that an attack can not only be costly, but can negatively impact on the business’ reputation, brand, employee morale and relationships with investors – it has the potential to cause irreparable damage.

 

Calling out for clarity

It takes more than a recognition of a problem to effect change.

One of the stumbling blocks for businesses is a lack of knowledge or direction when it comes to becoming more cyber-secure.

For others, they may not have quite grasped the severity of the impact of attacks, due to the relative infancy of cybercrime, making security an afterthought or low on their priority list.

According to the Cyber Security Breaches Survey, around three in ten businesses (32%) say they are not sure how to act on the advice they have seen or heard around cyber security, whilst just seven per cent of businesses have sought out government or public-sector information.

This perceived lack of clarity on what businesses should be doing, or uncertainty of what is relevant to individual businesses, is reflected in the low number of businesses investing in specific cyber security insurance.

Just one in ten (11%) of businesses say that they have a specific cyber security insurance policy, and a further 15% of businesses said they have previously considered but ruled out having cyber insurance.

Top reasons for not having cyber insurance include a lack of awareness of cyber insurance (23%) and considering themselves to have too low a risk to warrant it (22%).

For those who did have specific cyber policies, motivation went far beyond potential loss, with access to breach management team and forensic teams, proof of diligence and peace of mind key drivers.

Whilst basic crime policies cover fraudulent online attacks, they have limitations.  Often selected as ‘bolt-ons’ to conventional policies, they do not address the full range of exposure, leaving gaps.

Only specialist cyber policies provide the comprehensive protection needed in the events of attacks, including data breach, cyber extortion, the cost of professional assistance in mitigating loss, the costs of fines, and in some cases, ransom payments.

The cyber insurance market is becoming more dynamic, in response to evolving need and demands, with many insurers and brokers now helping customers with contingency planning, establishing an understanding of the implications of cyber breaches, evaluation of risk, and putting security measures and crisis action plans in place, should the worst happen.

Many cyber security insurance policies also provide swift legal and public relations advice post-breach, to help companies decide how and when to communicate an incident to their customers.

With active groups on the increase and methods becoming more aggressive, one thing is clear; complacency when it comes to cyber security is not an option for businesses – all organisations are vulnerable to attack, no matter how large or small, and should take steps to protect themselves.

 

Technology

WHAT EVOLUTIONARY AI MEANS FOR FINANCIAL SERVICES

FINANCIAL SERVICES

by Babak Hodjat, VP of Evolutionary AI at Cognizant

 

Many banks and other financial services institutions (FIs) are beginning to recognise the benefits of AI-driven solutions as a way to get ahead in the market and challenge the competition. Amongst many other benefits, the technology enables organisations to offer hyper-personalised customer experience,  dramatically improve internal decision making, and drive operational efficiency. However, many businesses are struggling to move beyond the experimental phase and reach actual AI deployment. It is those organisations that are at risk of being left behind.

The financial world has already been transformed by AI, and this transformation is continuous. A new breed of AI, known as ‘evolutionary AI’ has begun to further accelerate innovation. It is capable of automatically designing itself with little need for explicit programming by humans – innovatively creating complex AI models, and optimising decisions considering multiple scenarios.

This technology is revolutionary for industries across the world, but in particular it is set to transform the financial services sector. Enabling businesses to spot novel strategies that would never have been identified by human data scientists, and, in turn, allowing companies to take full advantage of today’s massive data sets – evolutionary AI will soon be a vital tool in all FIs’ arsenals.

 

The nuts and bolts of evolutionary AI

Emerging technologies that enable AI algorithms to design themselves are allowing organisations to transcend human limitations. Evolutionary AI operates iteratively. Firstly, it randomly generates a set of potential solutions to form an initial population and assigns a score to each solution based on how well it performs relative to other solutions. In the second round, it retains the solutions that performed best, perhaps only 5% of the total, and recombines their components, sometimes “mutating” them to create a new population. This new population is then tested, and the process begins again. Over multiple generations, the appropriate components of the more successful solutions become increasingly prevalent in the population, and eventually a solution is discovered that yields the best outcomes.

 

Advantages and use cases

Compared to human design, evolutionary AI can be deployed far more quickly, avoids biases and preconceptions, and typically performs better. Furthermore, the chosen model will evolve and improve over time based on new data.

Evolutionary AI can be applied in a wide variety of areas at FIs. Some examples include designing quantitative trading strategies to maximise returns while minimising risk and loan underwriting. Rather than relying on human analysis, evolutionary AI solutions can quickly analyse all the combinations of relevant variables to create models that more accurately assess the risk of default by a potential borrower.

 

A recipe for success

In order to reap the benefits of the technology, FIs should focus on the following:

  • Responsible AI – Behave in ways that make customers and employees comfortable, i.e. not making decisions that are unethical or exhibit bias. Companies need to monitor them to ensure they continue to act appropriately, as they learn and evolve.
  • Viewing AI through a business lens – Having AI projects managed by cross-functional teams with business executives in the lead is a good place to start. Companies also need to look across their organisations to identify opportunities to generate concrete business value from AI — not only in reduced costs but also in boosting revenues by delivering enhanced customer experiences and through improved decision-making.
  • Enhance data management – AI applications depend on access to timely and accurate data, which is a challenge for many FIs that have fragmented data architectures with multiple legacy systems. Companies need to identify which types of data are required for each AI project and ensure they can be captured in an appropriate format.
  • Approach with speed and caution – AI projects need to be rolled out quickly, while at the same time be rigorously measured, so failures are terminated promptly while successes are moved into production.

The sophistication of AI technology is set to significantly improve over the coming years as it continues to design and test itself. As a result, it will become more critical to the productivity of FIs, and soon businesses will recognise it as a vital tool for consulting on important business decisions. It will not be long before humans and AI are working alongside each other, with robots handling routine tasks, enabling employees to focus on more complex and sensitive activities. Delivering more value together than either could on their own.

 

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Technology

6 EXAMPLES OF ARTIFICIAL INTELLIGENCE IN USE TODAY

ARTIFICIAL INTELLIGENCE

We’re probably not aware of the moment when artificial intelligence sneaked into our lives and became a part of our everyday existence.

Was it the first movie recommendation we got from Netflix? Or the item we’ve purchased using Amazon’s suggestions?

AI is now all around us, and it’s holding tremendous potential, with new application possibilities being discovered every day.

We’ve gathered six very practical examples of AI, to show just how widespread this technology is today, and how prevalent it is yet to become.

1.    Healthcare

The use of AI in healthcare is already bringing many benefits – at the beginning of the year, we’ve witnessed  AI outperforming six radiologists in reading mammograms and identifying breast cancer more accurately and quickly.  A computer algorithm can now analyze images in just a few seconds, significantly improving the speed of diagnosis.

The first AI-designed drug molecule, by Excienta, is currently being tested on humans. While it usually takes three to four years for traditional research to reach this stage, it just took 12 months for the algorithm to make it possible.

As for the current COVID-19 crisis, the Chinese technology giant Alibaba has recently developed an algorithm that can detect coronavirus in seconds, with 96% accuracy. The algorithm that analyzes CT images of patients’ chests is used by more than 100 healthcare facilities to distinguish the disease from other viral pneumonia cases.

2.    Virtual Personal Assistants

Alexa, Siri, Cortana, and Google Assistant are just some of the most notable examples of artificial intelligence we’re all familiar with.

We interact with our PAs regularly – ask them for directions, information about the weather and the news. They allow us to finish various tasks easily, without having to use our hands – we can stream podcasts, play music, make to-do lists, set alarms, schedule our meetings, or order pizza.

These voice assistants use machine learning technology and natural language processing so that they can get smarter and more capable of understanding voice queries. In other words, with the help of AI and its subsets, voice assistants learn from your previous searches and preferences and use all the information they collect to offer you better search results and service.

3.    Customer Service

Even if you’re still not interacting with your devices using your voice assistant, you’ve surely communicated with AI at least once, most probably in the form of a chatbot.

There is hardly any good online store that doesn’t offer at least some kind of AI-powered customer support.

The most common are conversational chatbots that are now able to answer 80% of most common customers’ queries in an accurate and timely manner, without any need for additional human intervention.

With data AI chatbots gather on the customers, they are now able to facilitate human-like interaction and personalize it more than their human counterparts.

Conversational AI algorithms can now give offers and recommendations that are more likely to fit customers’ needs and interests, boosting both their satisfaction and retailers’ revenue.

4.    Finance

The banking and finance sector has recognized the possible advantages of AI early on and is now successfully implementing the technology for various purposes.

The finance industry relies heavily on large amounts of data and accurate real-time information. With the use of AI, it’s now much easier to detect frauds, money-laundering, or any other suspicious behavior. Some of the financial advisors’ tasks can now be automated too, as  AI-powered advisors can quickly scan the market data, and predict the best portfolio or stock.

One of the best examples of how useful AI in the banking industry can be, is Erica, an AI employee of the National Bank of America. This digital financial assistant has already served over 7 million customers and handled over 50 million queries. Apart from managing many other different tasks, Erica helps customers with their transactions and budgeting, tracks their spending habits, monitors duplicate charges, and gives useful advice.

 

5.    Smart Vehicles and Delivery

Cars and drones are also shifting towards the use of AI.  Even though artificial intelligence is widely used in car manufacturing, its use in the automotive industry is most commonly related to the use of self-driving vehicles, that are leveraging machine learning and vision to find their way through the traffic safely.

Autox is, for example, currently testing their autonomous grocery delivery within San Jose. Their vehicles use AI software, real-time cameras, and sensors to navigate within a geofenced zone, with plans for gradual expansion.

Amazon and Walmart are already investing large amounts of money into drone delivery programs. Amazon’s goal for its Prime Air service is to create fully electric drones that can deliver packages lighter than 5 pounds, to their customers located within 15 miles, in less than 30 minutes.

6.    Smart Homes

One of the finest examples is Nest, the thermostat algorithm, which uses an intelligent machine learning process to learn about your behavior and the temperatures you like. It then anticipates and adjusts your home or your office to your temperature needs, at the same time saving significant energy resources.

Google acquired Nest back in 2014 for $3.2 billion and now aims to create a smart and helpful home. The tech giant is trying to connect devices such as thermostats, cameras, alarm systems, doorbells, and locks under the same roof, offering an easy to use smart home solution.

However, for this to work seamlessly, technological advancement in the field of IoT and 5G needs to be utilized. Near-zero latency is what allows for smart homes to be remotely controlled.

As you can see, AI is impacting and improving every aspect of our lives and our society. It will revolutionize the way we do different things, from driving our cars to receiving medical treatment. Although this technology is still in its infancy, it has already managed to disrupt the above-mentioned areas and offer us a sneak peek into the future.

 

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