IBM Security announced research from its IBM X-Force Research team which revealed the financial services industry was attacked more than any other industry in 2016 – 65 percent more than the average organization across all industries.
Or, as Willie Sutton famously asked why he robbed banks: “Because that’s where the money is!”
As a result of the increase, the number of financial services records breached skyrocketed 937 percent in 2016 to more than 200 million. While the financial services industry was targeted the most by cyberattacks in 2016, IBM X-Force Threat Intelligence Index data shows it ranked third by industry for the number of breached records – likely due to investments in enhanced security practices.
“Cybercriminals have always gone where there is money to be made. While financial services has been a highly targeted industry by cybercriminals, in previous years, their main focus shifted to other more lucrative industries like healthcare or retail,” said Nick Bradley, Practice Lead, IBM X-Force Threat Research. “However, in 2016 we saw a significant resurgence to financial services as criminals decided to go directly to the source money.”
Insiders Pose Largest Threat to Financial Services
In looking at ways the financial services sector was attacked in 2016, the report found that the industry was more affected by insider attacks (58 percent) than outsider attacks (42 percent). This shows the genesis of many of the breaches were a result of malicious activity.
Malicious activity inside an organization can be a result of an inadvertent act (53 percent) such as an employee accidentally being tricked to download a malware-laden document through a phishing email which then gives attackers access to information. Many of these attacks occur without the user being aware of it.
Financial Malware Continues to Thrive
IBM X-Force found that some countries experienced a marked increase in financial cybercrime in 2016. Cybercriminals sharpened their focus on business bank accounts by using malware such as Dridex, Neverquest, GozNym and TrickBot to target business banking services.
Given the better defenses at large financial institutions, IBM X-Force researchers recently identified TrickBot malware campaigns targeting the less common brands in the industry, like private banks, wealth management, and high value account types, indicating this ambitious malware gang plans on attacking in new territory.
As cybercriminals continue to pivot and identify lucrative tactics to steal valuable information, IBM X-Force experts recommend the following tips to protect financial services organizations from attacks:
- Conduct Employee Awareness Training: Continuously train and test employees to teach them how to identify suspicious emails to avoid falling victim to phishing scams.
- Reduce Exposure to Insider Threats: Combine data security and identity and access management solutions to protect sensitive data and govern the access of all legitimate users.
- Apply a Cognitive Approach: Augment a security analyst’s ability to identify and understand sophisticated threats by tapping into unlimited amounts of unstructured data from blogs, websites, research papers and the like, and correlating it with relevant security incidents.
- Develop and Implement an Incident Response Plan: Identify the data necessary to respond to an attack, understand how to mitigate an attacker’s access.
Mizuho Financial Group, Mizuho Bank and IBM Japan today announced they are building a blockchain-based trade financing platform for trade financing. With the platform, Mizuho is aiming to streamline trading operations and improve supply chain efficiency.
The timely and highly secure exchange of trade documents is essential for stakeholders in the supply chain ecosystem. Digitizing trade information on the blockchain can help change the way information is shared, infusing greater trust into transactions to make it easier for parties involved in the supply chain, including exporters, importers, shippers, insurance companies, port operators and port authorities, to share critical shipment data in near real-time.
Mizuho Financial Group is working with IBM Japan to ultimately conduct actual trade transactions based on Hyperledger Fabric, a blockchain framework implementation and one of the Hyperledger projects hosted by The Linux Foundation.
Specifically, the project exchanges digitized letters of credit for actual trade transactions between Japan and overseas clients. As the letter of credit is digitally shared among parties including importers, exporters and their banks, it is expected to simplify the associated document creation and exchange processes, which have traditionally been time- and paper-intensive.
Also, the system will enable all parties to view the latest shipment status data, which can result in reduced trade transaction and processing costs.
“We are pleased to be the market leader in Japan in powering our processes and workflows with distributed ledger technology and continue to work aggressively towards expanding our portfolio of its implementations across the group,” said Daisuke Yamada, Managing Executive officer and Chief Digital Innovation Officer of Mizuho Financial Group. “The global expertise in digital technology of IBM complements our vision and has opened further avenues for us to tap the potential of distributed ledger in transforming our processes and workflows for better enterprise agility, transparency and regulatory reporting.”
This first phase of the project will lead to Mizuho conducting actual trade transactions using blockchain in June 2017 advancing the trade financial platform for commercialization. Mizuho continues to utilize new technologies, like blockchain, for innovative and better financial services for customers. Mizuho worked with IBM on another blockchain pilot focused on currency settlement.
IBM launched IBM Blockchain on Bluemix for organizations that require blockchain networks that are trusted, open and ready for business.
You can learn more about IBM Blockchain on Bluemix here.
IBM has made sizable investments in the Internet of Things (IoT) space over the past several years.
Last October, the company announced it would be spending $3B U.S. to bring Watson cognitive computing to IoT, and allocated more than $200M U.S. to its global Watson IoT headquarters in Munich.
When that announcement was made, IBM had 6,000 clients globally tapping Watson IoT solutions and services, and the momentum continues with its announcement earlier today that the company was launching a new IBM Watson IoT solution, Cognitive Visual Inspection.
Announced at Hannover Messe 2017, Cognitive Visual Inspection will provide manufacturers with a ‘cognitive assistant’ on the factory floor to minimize costly defects and increase product quality.
In fact, based on early testing of a production cycle that typically takes 8 days with ½ day required for needed visual inspection, the new IBM solution reduced inspection time by 80 percent and cut manufacturing defects by 7-10 percent.
Using an ultra-high definition (UHD) camera and cognitive capabilities from IBM Watson, the solution captures images of products as they move through production and assembly, and together with human inspectors, can detect defects in products, including scratches or pinhole-size punctures.
The solution, which continuously learns based on human assessment of the defect classifications in the images, is designed to help manufacturers improve for product excellence, achieve never seen before specialization levels, and deliver on the promise of Industry 4.0.
According to Business Insider Intelligence, the installed base of manufacturing IoT devices is expected to swell 3 times — from 237 million in 2015 to 923 million in 2020. By that year, manufacturers will spend approximately $267 billion on the IoT.
Manufacturing of these devices require the highest level of inspection for quality during every stage of production. Over half of these quality checks involve visual confirmation, which helps ensure that all parts are in the correct location, have the right shape or color or texture, and are free from scratches, holes or foreign particles.
Automating these visual quality checks is difficult due to volume and variety of products, as well as the fact that defects can be any size –from a tiny puncture to a cracked windshield on a vehicle.
The new solution helps inspectors accelerate the sometimes tedious and expertise-based visual inspection process to quickly identify and classify defects in the manufacturing process – helping to increase production yield.
FinTech Week NYC may have swung into full hyperledger mode, but IBM continues to forge new blockchain initiatives and partnerships around the world.
Most recently, the National University of Singapore (NUS) School of Computing and the IBM Center for Blockchain Innovation (ICBI), a part of IBM Research, have announced a collaboration to jointly develop a module on financial technology, to better equip students with essential knowledge and skill sets in this area.
Blockchain is a fast growing area across the globe, with banking, healthcare and the government leading the way in terms of adoption. According to studies by IBM’s Institute of Business Value, these three industries are investing heavily in blockchain and commercial solutions are expected to be in place in the next few years.
- Leading the pack in blockchain banking: Trailblazers set the pace: Fifteen percent of banks and 14 percent of financial market institutions interviewed by IBM intend to implement full-scale, commercial blockchain solutions in 2017. 65 percent of banks are expecting to have blockchain solutions in production in the next three years.
- Healthcare rallies for blockchains: Keeping patients at the center: Healthcare institutions are going all-in – investing heavily in blockchain pilots, with nine in ten respondents planning to invest by 2018 across all business areas IBM surveyed them about.
- Building trust in government: Nine in ten government organizations surveyed plan to invest in blockchain for use in financial transaction management, asset management, contract management and regulatory compliance by 2018.
The Singapore government’s strategic goal to become a Smart Financial Centre has put focus on blockchain for Singapore. Through its Financial Sector Technology & Innovation (FSTI) scheme, the Monetary Authority of Singapore (MAS) has committed S$225 million (US$157 million) over a five-year period to provide support for the creation of a vibrant fintech ecosystem.
Among the projects that have been backed by the scheme is a decentralized record-keeping system based on blockchain technology aimed at preventing duplicate invoicing in trade finance.
The new module on financial technology is expected to be introduced in January 2018, and will focus on blockchain and distributed ledger technologies. It seeks to equip students with an understanding of the fundamentals of the technology behind distributed ledgers, and its diverse use cases, from banking to digital currencies to supply chain management.
NUS faculty members will co-develop the curriculum of the new module with IBM researchers at ICBI to enable students to learn about the latest developments in blockchain technology, and encourage them to contribute to developing the technology further.
The module will be co-taught by NUS academic staff and ICBI staff who will use financial technology software such as Hyperledger Fabric, one of the five projects under the Hyperledger umbrella, to deliver the course content. Hyperledger Fabric was initially contributed by IBM. Such software will also be made available to NUS researchers for research purposes. Such software will also be made available to NUS researchers for research purposes.
Under the collaboration, ICBI will provide technology support in the form of access via the IBM Cloud to the Hyperledger Fabric blockchain framework. IBM is an early contributor Hyperledger, a Linux Foundation project, which now contains more than 129 member organizations.
You can learn more about IBM Blockchain initiatives here.
IBM today announced that it has identified three key elements of enterprise blockchain adoption for c-suite leaders to consider when evaluating the technology for business use.
Blockchain, or distributed ledger technology, is quickly making its way into the enterprise, potentially becoming as revolutionary a technology for business transactions as the internet was for communications in the late 1990s.
In the supply chain and logistics industry alone, the technology could potentially help save billions of dollars annually and significantly reduce delays and spoilage. Its potential impacts are far-reaching; according to the World Economic Forum, reducing barriers within the international supply chain could increase worldwide GDP by almost five percent and total trade volume by 15 percent.
To best derive value from blockchain technology, IBM recommends that enterprise adopters across supply chains and other key industries including financial services, retail, energy and others develop a close understanding of five key elements of the technology:
- Blockchain has the potential to transform trade, transactions and business processes. The two concepts underpinning blockchain are “business network” and “ledger.” Taken together, these are what make blockchain a smart, tamper-resistant way to conduct trade, transactions and business processes. Network members exchange assets through a ledger that all members share access to. The ledger is synced across the network with all members needing to confirm a transaction of tangible or intangible assets before it is approved and stored on the blockchain. This shared view helps establish legitimacy and transparency, even when parties are not familiar with one another.
- The value is in the ecosystem as the blockchain network grows. As a business network, blockchain can include several different types of participants. Depending on the number of participants in a blockchain network, the value of assets being exchanged and the need to authorize members with varying credentials, adopters should observe the difference between “permissioned” and “permissionless” blockchain networks. The real value for blockchain is achieved when these business networks grow. With a strong ecosystem, business networks can more easily reach critical mass allowing the users to build new business models and reinvent the transaction process.
- Blockchain can significantly improve visibility and trust across business. Blockchains can reduce transaction settlement times from days or weeks to seconds by providing visibility to all the participants. The technology can also be used to cut excess costs by removing intermediary third-parties typically required to verify transactions. Because blockchain is built on the concept of trust, it can help reduce risks of illicit practices carried out over payment networks, helping to mitigate fraud and cybercrimes.
Speed, cost efficiency and transparency are among blockchain’s most significant benefits in the enterprise and within ecosystems of companies conducting trade.
IBM, Walmart and Tsinghua University, for example, are exploring the use of blockchain to help address the challenges surrounding food safety. By allowing members within the supply chain to see the same records, blockchain helps narrow down the source of a contamination.
Blockchain is being rapidly explored today
Real-world use of blockchain is underway. Everledger, a company that tracks and protects diamonds and other valuables via the blockchain, has started building a digital business network using IBM Blockchain to power its global certification system.
When combined with a highly secure cloud environment, blockchain technology can be used to help protect suppliers, buyers and shippers against theft, counterfeiting and other forms of corruption, while simultaneously demonstrating the origin of high-value goods for essential parties.
IBM is also working with multiple stock exchanges to test trading over blockchain in low-liquidity markets. A case study that supports findings from ‘Leading the pack in blockchain banking’ and ‘Blockchain rewires financial markets’ predicts that 15 percent of banks and 14 percent of broader financial markets institutions expect to have blockchain in-production at commercial scale this year, and 53 percent of banks believe they will move to a live blockchain network over the next two years.
You can learn more about IBM Blockchain solutions here.
Crédit Mutuel and IBM announced today that following a successful pilot, the use of Watson technologies is extended to 20,000 employees across 5,000 branches to continue to strengthen customer relationships.
This marks the first commercial use of Watson by a financial institution in France to assist its professionals.
The bank’s customer advisors have been using Watson services in French for the past year, integrated in their business applications, as Crédit Mutuel and IBM have partnered to train and improve Watson’s French language capabilities.
By mid-June, Watson-based solutions will be deployed to client advisors across the 15 federations of Crédit Mutuel throughout France:
- The Email Analyzer will help the advisors of these branches to manage the more than 350,000 customer e-mails they receive each day. The solution allows the Bank to identify the most frequent requests, determine the level of request urgency and help its client advisors execute faster or delegate associated tasks, allowing them to accelerate and enhance responses provided to their customers.
- Two Virtual Assistant applications will use Watson technology to help the advisors rapidly provide customers with information on a comprehensive set of offerings, starting with complex domains such as car and housing insurances, and the whole range of savings and investments products.
After one year of intensive training with the business experts of the bank, and after a successful pilot with 150 client advisors in 20 branches, both solutions were strongly endorsed by the pilot’s users.
Working with Watson-based solutions trained with internal business knowledge has helped them free up time; improve the speed, relevance and accuracy of responses to queries; and ultimately reinforce relationships with their customers, providing more personalized attention.
According to an internal survey of participants, 94 percent of the respondents would recommend the Virtual Assistant to colleagues and 87 percent would recommend the Email Analyzer.
The pilot also demonstrated that client advisors were able to find the right answers to most of their customer questions more than 60 percent faster using the Watson-based Virtual Assistant.
“As a mutual bank with a strong local presence all over the country, we continue to invest in our branches to help advisors deliver more personal relationships with our clients, whether face to face, by phone, or digital. In this context, Watson is a perfect working partner to assist our professionals, augment their service quality and help them bring more value to clients,” said Nicolas Thery, chairman at Crédit Mutuel. “We are evolving our banking business to deliver a growing number of diversified and valuable services to clients, and we recognize how important it is for our professionals to be central to our client relationships.”
Crédit Mutuel will extend the use of Watson technologies to additional use cases later this year, for health, personal risk insurance, car credit insurance, and bank credit services.
File this one in the “Cutting Your Own Throat” folder.
The Wall Street Journal is reporting that Google is planning to introduce an ad-blocking feature in the mobile and desktop versions of its Chrome web browser.
No, I’m serious. And it gets better.
The feature could be switched on by default within Chrome. So the default could be that users get no ads.
The upside for users: No ads, of course. And the ability to “filter out certain online ad types deemed to provide bad experiences for users as they move around the web.”
The Journal explained that “Google could announce the feature within weeks, but it is still ironing out specific details and still could decide not to move ahead with the plan.”
A browser that blocks ads.
From a company that makes most of its money from ads.
Have they talked to any of their advertisers about this?
Am I missing something?