Time to secure our emails

In February I wrote about the growing awareness of cybercrime targeting the financial services and the industry’s need ”“ and I would say duty ”“ to help protect consumers and businesses against this invidious problem which has been growing year-on-year. Little did we know at that point what was coming down the line.

The current crisis in which we find ourselves ”“ with the public fearful of the pandemic and businesses having to enable staff to work from home ”“ have made both even more vulnerable to cybercrime. Cybercriminals are playing on not only people’s fears around the Covid-19 pandemic but also the unprecedented need for staff to work from home, stretching companies’ communications channels and security systems.

Regulators, including the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR), have issued warning statements on cybercrime and scams, a clear indicator of the seriousness with which they take this issue and the extent to which it is a problem ”“ see FCA: https://www.fca.org.uk/news/news-stories/avoid-coronavirus-scams/.

Incidences of scams, like phishing and smishing’ ”“ i.e. when criminals use emails or text messages to impersonate individuals or organisations to trick people into giving away their personal and financial information or money ”“ are reported to have increased notably over the past few weeks as the Coronavirus has taken hold.

At the same time, the need for data and information, including that of a personal and confidential nature, to move outside of companies’ security systems, has increased the risks for businesses, including that their communications will be intercepted.

For the financial services industry, this risk has been exacerbated by the end of the tax year and the need to meet tax and investment planning deadlines, which has meant advice firms have needed to get client requests and information to platforms and providers in the most expedient way.

As you might expect, most communications are by email, particularly between adviser and client, because that is the most familiar, fastest and easiest channel to use.

As mentioned in my article in February, working with leading cyber security specialist Beyond Encryption, we have developed and launched a new encrypted email solution for the financial services industry, in particular aimed at protecting the communications between product providers, platforms, advisers and end clients.

So, to help financial advisers secure their email communications during the crisis, we’re providing two months free use of the Unipass Mailock premium service for our Unipass identity service users in advice firms. To take advantage of this, users simply enter a voucher code (2monthsfree’ via www.unipassmailock.com/) to get access and there is no automatic renewal and no payment information required to get started.

It is our way of helping the industry to tackle this particular issue which has been magnified by the current unprecedented crisis we are all experiencing.

I would add that in an industry where transmission of data is key, and emails are the primary communication channel and will remain so for the foreseeable future, now, more than ever, it is time to secure our emails.

Research – Why 4 in 10 businesses abandon banking applications?

How Fintech Will Shape The Future Of The Forex Market

Among mainstream investing opportunities that exist outside of the stock markets, forex trading has long been a popular option. Today, this market is the most liquid in the world, and handles a massive amount of trading activity. But it’s also a market that has evolved over the years with some thanks to technology ”” which makes it one to watch as we observe how fintech continues to develop.

The earliest sign of technology helping to expand the forex market, aside from the actual beginning of the internet age, was perhaps the emergence of smartphones and the accompanying apps. Home Business wrote a piece just two years ago covering mobile tech’s effect on the world of investing. Basically, the idea is that the connectivity phones now provide give investors unceasing access to financial markets, which in turn leads to greater liquidity and volatility. This is absolutely the case in the forex market, which traders tap into from all over the world at all hours of the day.

Alongside the involvement of mobile devices, investment markets have also seen the rise of a growing number of accessible tools and analysis that can simplify the trading process (and in some cases even make it easier to generate gains). For instance, the same article from Home Business pointed out that mobile algorithms and applications are now available, and can often provide automated glimpses of the best trading strategies. And regarding forex specifically, FXCM shows how readily available profit calculators can now provide near-instantaneous clarification of the profit and loss potential of any given trade. This enables investors to make mathematically strategic decisions far more efficiently than in the past.

These are all examples of tech’s increasingly large role in investments, and in the forex market in particular. And while they don’t necessarily fit into what we now think of as fintech, they helped to pave the way for some of the fintech-related changes we’re beginning to see in how the modern forex market actually functions.

For an existing example, we can turn to our overview of Fexco, which is currently one of the world’s most established fintech companies. Fexco includes foreign exchange sectors among the areas it provides services to, and specifically helps to facilitate cheaper and more reliable transactions. It does so, as we noted in the overview, via the PayDirect portal, which is certified for information security. In simple terms, this is an example of tech-based secure transfer enhancing the appeal of forex transactions.

In the near future, we may see more examples like this, including some that take advantage of newer and more innovative pay transfer technologies. Specifically, it’s become increasingly likely that banks and private companies facilitating forex trades are going to take advantage of the blockchain. Business Insider spoke about this last year, making a note that HSBC had already “settled $250 billion in FX trades” using the blockchain in 2018. That’s an almost shockingly large number that would seem to indicate that this method of transfer is well on its way to widespread use. And the blockchain, some would argue, is the very definition of modern fintech.

As we look forward, there’s no reason to suspect anything but a deepening relationship between fintech and the forex market. Traders will continue to use the devices, tools, applications, and algorithms made available to them to make smarter and more informed decisions. And the investments themselves will continue to be carried out via the most secure and efficient technological methods.

Photo by Lorenzo from Pexels

Getting the Banking Balance Right

When we hear about the work that FinTech Scotland facilitates, it excites us at Verimatrix. It wasn’t long ago that our Scottish operation was a start-up called Metaforic, trying to find its way into the ”“ then emerging ”“ world of Fintech. The community that FinTech Scotland is building would have been valuable to us then ”“ just as it is highly valuable now.

Of course, the Fintech community in Scotland isn’t just start-ups. We have a proud and established financial industry – the Global Financial Centres Index (GFCI) ranks Edinburgh 7^th in Europe and the top 30 globally.

It’s this mix, coupled with building the right community, that gives Scotland the right balance to build a strong and sustainable Fintech industry. Start-ups can learn from the experience and industry-reach of more established players. The established players ”“ now increasingly competing with the tech giants ”“ can benefit from the agility and fresh ideas developed on their doorsteps.

For Fintechs, another area to get the banking balance right is security. There’s no getting away from the need to secure your products and solutions.

When Fintech emerged as a sector in its own right, it had the luxury of playing on the edge of the financial space.  That meant, in most cases, Fintechs were out of the scope of financial regulation. Over time, this has changed for two reasons:

• Fintechs are increasingly seen as partners of established players;
• Regulation has caught up with the evolving finance market.

So, what does working in partnership with banks and other established players mean for your security needs?

First, it means raised expectation levels. Services that are sold or resold by banks come with an implied trust associated with them. That trust has been hard won over centuries and is easily lost. As a partner of a bank, you gain some of that trust, but you are also expected to maintain it.

Second, it means being able to demonstrate that you’ve meet your new partners’ security “check boxes”. Through any procurement or partnership discussion with a bank or large financial institute, there will be security hoops to jump through. Being ready for these hoops not only makes the process easier, it also demonstrates to your new partner that you are a credible organisation.

What has changed with regulations and legislation?

The biggest changes are the new open banking regulations ”“ requiring banks to open up their platforms to third parties. We see this in Europe through PSD2, and similar changes are happening around the globe. These changes can be seen as legitimising Fintech.

Of course, with legitimacy comes responsibility and Fintechs increasingly come under the scope of financial services’ regulation. Though this can be seen as adding short-term burdens to Fintechs, these regulations also offer mid and long-term opportunities. The regulations aren’t in place just for fun, they exist to protect consumers. For Fintechs to become long-term sustainable and credible companies, this is something they need to be doing anyway.

The open banking regulations have emerged in parallel to tougher consumer privacy legislation. In Europe, GDPR is certainly the buzzword; and just as with open banking, we see similar trends around the world.

Open banking regulations aren’t something to be feared, and neither is consumer privacy legislation. These changes in regulation are all about doing the right thing. We’d argue that rather than be a burden, the legislation actually gives Fintechs a framework to guide their security thinking.

Read more on Verimatrix’s thoughts on GDRP and PSD2

Where should you focus?

Balance is key. The security required by Fintechs shouldn’t become an overloading burden. It’s about taking sensible steps while allowing your organisation to focus on the fun stuff”” building exciting products.

Our first recommendation is to build a “security as usual” culture from day one. It’s hard to make the change later, so make it everyone’s responsibility from the start to consider security as you build your products and services. This makes it a low level, non-disruptive activity rather than something forced upon the organisation down the road.

The second recommendation is to choose the right security. Take the time to understand what your valuable assets are and then choose Friendly Security solutions to protect them. Friendly Security means security that is trustworthy, mature and proven; but is also low impact to implement.

This is where Verimatrix can help. Our Software Shielding products are designed to protect the code, data and services in any mobile app you develop, all the while being easy and straightforward for your development teams to apply. We take this to extremes with our recently launched ProtectMyApp service.

These are exciting times for the Scottish Fintech industry; and it is critical that the community Fintech Scotland is building up establishes the right balance for long-term success.