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THE FUTURE OF CYBERSECURITY
With the increased use of social media and the focus on cybersecurity by regulators, what's next? Among the biggest shifts – and debated issues – is the move to the cloud.
While many in the financial industry view data and website hosting in the cloud as risky, others say the old-fashioned methods pose more risk.
“We are extraordinarily cautious about client data,” a tech exec at a $25 billion San Francisco-based investment firm told me. “We don't want even one small piece of information leaked. For now, everything needs to be hosted internally.”
But even in my own experience, some of the largest companies in America were delighted to hear of services hosted in the cloud.
“Amazon (cloud hosting) is safer than any hosting we could do ourselves,” says Nicolas Oriol, an MIT graduate and founder of Unience, the European social media site for financial professionals.
At some point, says Warrene, “even large institutions won't have full control of all aspects of what they are responsible for, and security risks will be tiered – from individual devices, to corporate networks, and ultimately to the cloud – which means Apple, Amazon, Google, Microsoft, as well as players like Oracle.”
As biometrics emerge, rules and regulations will evolve. For example, passwords are considered protected speech while fingerprints are not. What are the implications if, ultimately, all client data is secured by fingerprint?
As we shift from computers to tablets to potentially wearable and interactive computing for business, what risks and liabilities will emerge? If we authenticate through, say, a retinal scan, and a criminal compromises that method, will they have deeper access than ever before?
With social media still in its infancy, cybersecurity challenges will only increase. “The growth of nation-state cybersecurity threats focused on intellectual property theft, market disruption, and competitive intelligence gathering pose tremendous threats to social media platforms,” says McNicholas.
Regulators will need to evolve new guidance that adapts the basic protections for customers and consumers to new technologies. That, in turn, will require an increased use of new technologies to monitor new technologies, and a continuing dialogue with industry.
For firms and financial professionals, it calls for flexibility. Speed is the new normal, and firms will need to be flexible both internally and externally as they continue to engage with regulators.
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