Asia has undoubtedly become an attractive target for cyber criminals. According to the Financial Times and a study conducted on Asia-Pacific businesses, up to 90% of institutions surveyed reported an attack of some kind in 2016, up 76% from the prior year. The financial services sector in the region is particularly attractive for digital security violations, as it was reported that 45% of financial institutions have suffered economic crimes – including cyber crimes – compared to 34% across all other industries in 2014 (PWC report). One of the most recent attacks was an audacious heist in Japan where 100 hooded thieves stole $18m from a coordinated run on ATMs, exploiting a vulnerability in the fraud analytics software at both the Japanese bank (Seven Bank) and the South African end of each transaction. The fraud only took three hours and involved 14,000 ATM cash withdrawals, the only ones in the country which offer 24-hour cash machines and withdrawals on a foreign-issued credit card with a magnetic strip rather than the usual and more secure chip.
Cyber attacks such as these are extremely costly, not just for the targeted organisations, but also for the global business legitimacy of the region. Despite this harrowing landscape, many positives can be found when considering the effects that the demand for cyber security has on the overall Asian business environment.
Cyber security solutions can quickly become outdated and ineffective. Therefore, new and updated solutions are needed to maintain defenses, and this high demand drives the emergence of innovative FinTech cyber security start-ups. The cyber security battlefield is complex and quickly evolving, and financial services firms are now realizing the benefits of embracing these innovative and nimble tech companies, rather than relying on in-house developments.
As such, the Asia-Pacific region is a breeding ground for FinTech start-ups as the region flourishes with a vibrant innovative ecosystem. Investments from governments, rich networks, innovation labs and accelerator programs are elements that foster those kinds of companies, support their development and provide the region with a competitive advantage.
FinTech investments in the Asia-Pacific region reached US$3.5 billion in the first nine months of 2015, nearly four times more than in 2014 (Accenture). Singapore and Hong Kong have launched their respective FinTech festivals providing attractive challenges and networking events for FinTech start-ups in the region and overseas.
However, technology can only go so far in protecting companies from cyber attacks. An effective cyber security defense strategy relies just as much on a company’s employees, but there’s a large global gap of critical staff training and education on the subject. It has been evaluated that there was a global demand of one million specialized cyber security job openings for 2016 and that the figure was expected to rise to six million by 2019 with a projected shortfall of 1.5 million (data from a Cisco report and Forbes). Demand for cyber security workers is even higher in industries managing big volumes of consumer data such as the finance sector, which shows a demand increase of +137% for workers over the past five years (Burning Glass). This high staffing demand can be seen as an opportunity to attract international talent which drives higher wages and contributes to the region’s growth. The search for IT professionals in Hong Kong has already led to a 19% year-on-year increase in HR advertising spend as companies seek to use more creative channels to connect with candidates.
FinTech innovators also drive growth for clients as they can help create new revenue streams or entirely new markets. Thanks to a data-centric approach to security, innovative technology platforms such as APrivacy enable financial institutions to secure communications over any channel, including the ones most favored by their clients, such as consumer messaging apps. For example, by making email or instant messaging a secure and verifiable communication channel, financial services companies can now not only connect with their customers over these channels, but can use them as means to conduct business and provide new services which previously wouldn’t have been possible.
Even if at first glance a region vulnerable to cyber crimes like Asia appears condemned to a bleak future, the demand for cyber security in Asia continues to rise. Answering this demand can be a positive opportunity to leverage the global business environment of the region with new job creation, increased FinTech investments and new and exciting revenue opportunities.
Digital Security Perfected – APrivacy Ltd. is an award-winning company which combines military-grade data security with a seamless user experience on any platform, any device, anywhere. APrivacy Ltd.’s enabling technology now allows the financial services industry to confidently communicate with clients using their favourite channels leading to increased revenues and reduced costs while meeting the strictest regulatory requirements.
