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good afternoon my name is William and I work on cybersecurity on CBN sites Intelligence Unit today we're gonna talk about securing the future of FinTech more specifically we're gonna talk about the rise of active cyber defense strategies for financial firms now make no mistake about it FinTech is under attack last year financial firms saw the highest volume of cyber security incidents over any other industry more than information communications technologies more than manufacturing more than retail and more than professional services and what's more is that this threat landscape is widening cyber attacks on financial firms are increasingly sophisticated and diverse we've seen website based attacks known as distributed denial-of-service flood customer facing bank websites with traffic and take them offline we've seen attacks on the Swift based money transfer systems attacks like this have made headlines since at least 2016 when attackers stole 81 million dollars from the Central Bank of Bangladesh last year we saw the first ATM malware as a service attack for sale on the dark web what is that well essentially I could get on the dark web download some software follow some simple instructions send a command remotely to a hacking team that would hack the ATM for me and the money would begin to spit out what's more is that as fast as we're adopting new financial technologies hackers are finding ways to penetrate those systems this is evidenced by the fact that we have seen a rise in crypto exchange pacts including a major one this year simply put this is war our traditional defenses are no longer adequate and this needs war time not peace time urgency that's John McFarlane the chairman at Barclays organizations are responding by shifting from passive cyber defense to more active cyber defense strategies and what does this mean well a passive strategy is largely reactive whereas an active strategy going outside your network directly engaging with the hackers or the people who have tried to cause you harm we're actually seeing financial firms look to military intelligence agencies for these different types of active cyber defense strategies for example we've seen some firms launch cyber war rooms to coordinate threat intelligence and response major organizations MasterCard Visa Citigroup Wells Fargo Fifth Third Bank and even regional players like Bank of the West have all adopted this strategy it was actually taken in part from the Department of Homeland Security post 9/11 when they were launching what were called fusion centers all over the world to coordinate intelligence in response to threats we're also seeing investment banks mirror military-style wargames to train for cyberattacks in fact just this month we saw Goldman Sachs announced that they were rolling out a program to help train employees by allowing them to gamify the cyber hygiene experience leaderboards across the company who's better at cybersecurity etc we're also looking at the fact that financial firms are embracing the white hat hackers to battle test their systems we've seen companies like MasterCard do this in Western Union but largely they're following in the footsteps of the Department of Defense which rolled out a program called hack the Pentagon recently it's where they say ok hackers we're gonna open our systems up come penetrate us and then show us what you did so we can go back and remediate those attacks we're also looking at the fact that banks are going outside their networks and they're monitoring stolen financial data on dark web marketplaces to catch identity thieves well what is the dark web for most of you maybe no but for those of you who don't this is a lower layer of the Internet it's largely inaccessible to you and me you need special tools to get there and a lot of criminals hang out there and about 40 percent of the data on the dark web is leaked stolen data and a lot of that is financial fraud so it makes sense that these firms would be going there to get back what was once theirs synthetic identities synthetic identity fraud's are where stolen data is actually attached to fabricated accounts and identities it used to be that I could just go and figure out your password and then I would impersonate you online to make transactions but now after Equifax and the endless stream of breaches the number of personally identifiable pieces of information that are out there on us mean that hackers can now create wholesale synthetic identities to wage fraud and financial firms are largely adopting AI to combat this threat they're investing in AI armies which are very good at pattern recognition and they can uncover the patterns of criminality that enable them to go hunt these fraudsters we're also seeing banks invest in deception based security tools that trap hackers for example say you're an insurance company and you have within your network the crown jewels your customers data and you know it needs to be protected and you know hackers are going for it so why not clone that data and make it something that's innocuous and can't can't be used to harm anyone but it looks exactly like the crown jewels that are important to you and when a hacker goes into your system and steals that it's actually a tracking device and when they leave your system it takes you all the way back to their lair so what's next for the future of securing FinTech well game-changing FinTech security and cyber regulations are on the horizon first off consumers may become active defenders more specifically we're gonna see firms that champion proactive security put these kinds of tools in the hands of consumers we've already seen innovations such as polymorphic credit cards this is essentially a credit card where you can link up to eight different payment methods it is a small keyboard on it and a screen it creates a one-time-use pin that significantly reduces card theft and the card theft and the chances of fraud we're also seeing things like researchers at the University of Iowa creating synthetic materials that could be placed inside of a credit card such that when that card is stolen the user can send a signal to the card rendering it totally unusable now we've spoken a little bit today about active defense but there's another step here and it's what's called hacking back and we've actually seen last year drew a new draft for legislation was introduced in the US Congress to make hacking back legal to actually make it legal for firms to go retaliate against the bad actors that have attacked them this is a controversial idea and actually hacking back could open up the floodgates to endless tit-for-tat cyberattacks what's more is that there's a technology on the horizon that could change the game for all of security including for FinTech and organizations we'll need quantum strategies to say stiver secure what is what is a quantum computer well a quantum computer very simplistic explanation is an ultra-fast computer that uses the principles of quantum mechanics to perform calculations at a far more powerful rate than traditional transistor based computers some of the world's biggest companies know the future is quantum from Google IBM to Samsung Toshiba and more these companies are championing these inventions inside their organizations investment banks are actually already getting into the quantum game here we see a small snapshot of a patent from the Seabee insights platform that shows goldman sachs is adopting some quantum technologies to perform fast calculations but financial firms need to go a step further we can't just use quantum technologies to do the traditional finance things that we've already done better because quantum technologies actually threaten all bottom forms of protecting sensitive data however quantum computing is also the key to actively defending the future of FinTech we're gonna see quantum used in connecting consumers to websites authenticating payments authenticating wire transfers title transfers identity management and much more now CB insights has been mapping the space around cyber security for fin tech for some time and here you can see our proprietary cusp framework where we're ranking companies on a Maitre sea with two axes company health and momentum you can see seven startups listed here the remainder of which are available to cbn sites clients inside the platform I want to thank you for your time today and enjoy the future [Applause]