Trump vs. China

Back in 1930, the US introduced the Smoot-Hawley Tariff Act, which raised their already high tariffs, triggering a currency war and, as economists argue, exacerbating the Great Depression. With President Donald Trump’s threat to put 10% tariffs on the remaining $300 billion of Chinese imports that aren’t subject to his existing levies, sending markets tumbling from Asia to Europe, the question on everyone’s lips is: Is history about to repeat itself?

In August, in a bid to hit back against Trump’s administration, Beijing allowed the Chinese yuan to plummet past the symbolically important $7 mark. Economists suggest that this currency manipulation is China’s attempt to display dominance and gain the upper hand in the trade war between the two countries as devaluating its currency could help counteract the effects of US’s long list of tariffs on Chinese goods.

As protectionist actions escalate and US-China relations continue deteriorating, investors and markets have been growing increasingly concerned even though Trump has delayed the imposition of his new tariffs until December. A full-blown trade war wouldn’t be good news to anyone and could seriously weaken the global economy, as the IMF has warned, making the world “poorer and more dangerous place”. Both sides are expected to experience losses in economic welfare, while countries on the sidelines could experience collateral damage. Furthermore, if tariffs remain in place, losses in economic output would be permanent, as distorted price signals would prevent the specialisation that maximises global productivity. The one thing that’s certain, no matter how things pan out, is that there will be no winners in this war.

Economists suggest that this currency manipulation is China’s attempt to display dominance and gain the upper hand in the trade war between the two countries as devaluating its currency could help counteract the effects of US’s long list of tariffs on Chinese goods.

Cyberattacks & data fraud

Millions, if not billions, of people’s data has been affected by numerous data breaches in the past couple of years, whilst cyberattacks on both public and private businesses and institutions are becoming a more and more frequent occurrence. With the deepening integration of digital technologies into every aspect of our lives and the dependency we have on them, cybercrime is one of the greatest threats to every company in the world.

Cyberattacks are rapidly increasing in size, sophistication and cost, as cybercrime and data breaches can trigger extensive losses. In 2016, Cybersecurity Ventures predicted that cybercrime will cost the world $6 trillion annually by 2021, up from $3 trillion in 2015. According to them, ”this represents the greatest transfer of economic wealth in history, risks the incentives for innovation and investment, and will be more profitable than the global trade of all major illegal drugs combined”.

 Emerging Markets crisis

Since the early 1990s, emerging markets have been a key part of investors’ portfolios, as they have been offering strong returns and faster growth. However, global trade tensions, a stronger US dollar and rising interest rates have hit emerging markets hard. Still far from catching up with the developed world, many supposedly emerging markets are developing at a slower pace, which combined with the threat of a global trade war and higher borrowing costs on the rise, has made investors pull in their horns. Emerging markets are the ones feeling the strain and financial panic has been gripping some of the world’s developing economies.

With political instability, external imbalances and poor policymaking which has led to full-blown currency crises in the two nations, Turkey and Argentina have been at the centre of an emerging market sell-off last year. But they are not the only emerging economies faced with a currency crisis – according to the EIU, some economies which are already in the danger zone and could suffer from the same currency volatility include Brazil, Mexico and South Africa.

Still far from catching up with the developed world, many supposedly emerging markets are developing at a slower pace, which combined with the threat of a global trade war and higher borrowing costs on the rise, has made investors pull in their horns.

If the currency crises in Turkey and Argentina continue and develop into banking crises, analysts predict that investors could abandon emerging markets across the globe. “Market sentiment remains fragile, and pressure on emerging markets as a group could re-emerge if market risk appetite deteriorates further than we currently expect”, the EIU explains.

 Climate crisis

In recent months, the media is constantly flooded with reports on the horrifying environmental risks that the climate crisis the Earth is in the midst of poses, but we’re also only starting to come to grips with the potential economic effects that may come with it.

Despite the significant degrees of uncertainty, results of numerous analyses and research vary widely. A US government report from November 2018 raised the prospect that a warmer planet could mean a big hit to GDP. The Stern Review, presented to the British Government in 2006, suggests that this could happen because of climate-related costs such as dealing with increased extreme weather events and stresses to low-lying areas due to sea level rises. These could include the following scenarios:

• Decrease in agricultural areas crop yields due to hotter weather and draught.
• Rebuilding roads that have been destroyed by flooding caused by rising seas and more frequent hurricanes.
• Having to build more efficient power grids because the existing ones are not able to withstand extreme weather conditions.

Due to climate change, low-lying, flood-prone areas are currently at a high risk of becoming uninhabitable, or at least uninsurable. Numerous industries across numerous locations could cease to exist and the map of global agriculture is expected to shift. In an attempt to adapt, people might begin moving to areas which will be affected by a warmer climate in a more favourable way.

A US government report from November 2018 raised the prospect that a warmer planet could mean a big hit to GDP.

All in all, the economic implications of the greatest environmental threat humanity has ever faced range from massive shifts in geography, demographics and technology – with each one affecting the other.

Brexit

Fears that the UK could be on the brink of its first recession in 10 years have been growing after figures showed a 0.2% contraction in the country’s economy between April and June 2019. A weakening global economy and high levels of uncertainty mean the UK’s economic activity was already lagging, but the potential of a no-deal Brexit and the general uncertainty surrounding the UK’s departure from the EU, running down on stock built up before the original 29^th March departure date, falling foreign investment and car plant shutdowns have resulted in its GDP decreasing by 0.2% in Q2. This is the first fall in quarterly GDP the country has seen in six and a half years and as the new deadline (31^st October) approaches, economists are concerned that it could lead to a second successive quarter of negative growth – which is the dictionary definition of recession.

And whilst the implications of Brexit are mainly expected to be felt in the country itself, the whole Brexit process displays the risks that can come from economic and political fragmentation, illustrating what awaits in an increasingly fractured global economy, e.g. less efficient economic interactions, complicated cross-border financial flows and less resilience and agility. As Mohamed El-Erian explains: “in this context, costly self-insurance will come to replace some of the current system’s pooled-insurance mechanisms. And it will be much harder to maintain global norms and standards, let alone pursue international policy harmonisation and coordination”. Additionally, he goes on to note that tax and regulatory arbitrage are likely to become more common, whilst economy policymaking could become a tool for addressing national security concerns.

“Lastly, there will also be a change in how countries seek to structure their economies”, El-Erian continues. “In the past, Britain and other countries prided themselves as “small open economies” that could leverage their domestic advantages through shrewd and efficient links with Europe and the rest of the world. But now, being a large and relatively closed economy might start to seem more attractive. And for countries that do not have that option – such as smaller economies in east Asia – tightly knit regional blocs might provide a serviceable alternative.”

You’ve seen a lot of content, articles, warning and advice on cybersecurity, with hundreds of firms trying to sell you next level cyber protection. So, before you do anything else, you need to know what exactly it is you’re protecting yourself against. Below Suid Adeyanju, Managing Director of RiverSafe, lists 10 threats you need to be aware of.

In early July IBM Security and the Ponemon Institute released a new report titled ‘Cost of a Data Breach Study’. In this study it was reported that that the global average cost of a data breach and the average cost for lost or stolen information both increased. The former is up 6.4% to £2.94 million while the latter increased by 4.8% year over year to $112.57. This shows that cyberattacks on enterprises continue to rise. In particular over the last two years there has been a continual stream of concerning data security breaches.

One of the ways that organisations can defend against attacks is to ensure staff understand and are educated about the cyber threat landscape.

Understanding Threats to your Business

Getting the right technology, services, and security professionals is only a part of tackling the cyber security problem. It is also important that companies get a clear understanding of the cyber threat landscape. This means knowing where these types of attacks can come from and in turn, who is leading the attack (whether it be an individual or group). Often, knowing the answer to these types of questions leads to an understanding of the motive and makes countering the attacks easier. So, in this article, I wanted to highlight the areas of the cyber threat landscape that enterprises should be aware of.

1. Nation State: This kind of hacking is often government versus government. It is often functionally indistinguishable from cyber terrorism, but the defining trait is that the attack is officially sanctioned by a country’s government. These attacks can involve not only hacking but the use of more traditional spying as well.
2. Insider Threat: This is one area where many businesses least expect a threat to come from: inside the business itself. A reportfrom A10 Networks revealed that employee negligence is a major cause of cyber attacks. Employees unknowingly allowing hackers into the business through unauthorised apps. And, on the very rare occasion, a disgruntled employee could try and bring the business down in revenge, so it is always important to investigate who could have access because there is every chance that the threat could come from the inside.
3. Individual Attackers: When you think of the stereotypical hacker most thoughts turn to a hooded youth sitting alone in their room. This is the individual attacker and their motives are often more one of curiosity and learning. They want to see if they can hack a system rather than attempt anything malicious. This is the most neutral cyber threat.
4. Industrial Espionage: Sometimes an unrelated group and other times a rival business, cyber threats that deal with industrial espionage have the motive of creating problems for your business. The most common reason for industrial espionage is to discover the secrets of a rival business, often through spying. However, it could also involve destroying valuable data or, with some IoT devices, physically breaking the technology. Anything that can push a business over a competitor.
5. Cybercriminals: Much like the individual attackers, cybercriminals are an all-encompassing cyber threat. Almost all hackers are criminals in some way and the motives can vary from demanding money, to setting up crypto-mining, to damaging company property. Whatever they do it won’t be a good thing.
6. Phishing and Ransomware: These are some of the most common types of attacks you’ll find cyber criminals performing. These attacks are motivated purely by financials and exist to either scam a business out of money or hold valuable company data at ransom. Sometimes this can be a distraction to hide something more nefarious. Therefore, organisations need to make sure they are prepared for any escalation.
7. Ethical Hackers: An ethical hacker is the opposite of a cybercriminal, as the term ‘ethical’ implies. These types of threats are often undertaken for the sake of a company, and often have been paid for by the business to see if it can hack into its own servers. These hackers test the security resilience of a business and locate areas that are vulnerable, before an ‘unethical’ hacker comes along.
8. Hacktivists: A hacktivist is a sub-set of cybercriminals whose motives are more ideological. As the name references, a hacktivist is essentially a cyber activist. They are using hacking purely to push an agenda, whether political, religious, or otherwise, rather than a financial motive. A hacktivist attack can be something as simple as changing the text on a company website to a more nefarious act that interferes with the day to day running of the business.
9. Cyber Terrorism: While hacktivists don’t always cause damage, a cyber-terrorist will. Just like real terrorism, cyber terrorism exists to bring terror to your business, country and customers. Examples include the attacks on the NHSlast year which aimed to bring systems down in hospitals and cause chaos and fear.

By understanding all the different types of attacks in the cyber threat landscape it can help you build your cyber defence by identifying a motive and being able to trace what kind of opponent your business is facing, as well as if this is an attack aimed primarily at an individual, an organisation or a national-level threat where the solution would be to work with other companies to stop the attack as a team.

Last week, stock markets fell globally in the wake of US President Trump's latest tariffs threats to China. Donald Trump threatened to put tariffs on an extra $200bn (£141bn) of Chinese goods, further fueling the prospects and worries of a trade war.

This week Finance Monthly set out to hear Your Thoughts on the potential for an international trade war, gaging the opinions of experts and professionals around the world.

We asked them: What do you think about this? How will this change things internationally? What might be the short-term reactions and impacts? What about the long term? How will you be affected? How will small businesses be affected? Who will benefit from what's to come? Is this a good strategy? What are the political and social repercussions?

Miles Eakers, Chief Market Analyst, Centtrip:

Investors are right to be concerned as Wall Street futures dropped by almost 2% following Trump’s threats to impose more tariffs. Any retaliation by Beijing is likely to fuel the escalating trade war with Washington, which will in turn have a negative impact on equities and increase risk aversion.

Investors are not the only ones troubled by the current situation. The world’s largest superpowers’ shift towards protectionism has global ramifications. International companies may grow less competitive due to tariffs and the cost of raw materials purchased overseas could rise by 10–20%. It’s highly possible that any further action from the US or China could put an end to the current 10-year bull market run.

Kasim Zafar, Portfolio Manager, EQ Investors:

An all-out trade war is unlikely and we believe this will be avoided in favour of mutually agreeable changes on both sides.

The world last entered trade wars on this scale early during the Great Depression. The Smoot-Hawley Tariff was entered into US law in June 1930, about 8 months after the “great crash”. There are mixed opinions on whether the tariffs added to the economic depression or only slowed down the ensuing recovery. But it is generally agreed the tariffs themselves were not the main cause of the Great Depression

Today there are few, if any, of the conditions that presaged the Great Depression. But the world is a different place today compared to the 1930’s. The most significant difference is the interconnected nature of global supply chains that have been built by companies in the post-War era. Abrupt changes along the supply chain in terms of physical supply or associated cost will have immediate impacts on the total costs of production. Companies are not charities, so if the cost of production goes up, so too will product prices on the shelf.

The impacts will differ between companies and across nations dependent upon:

• the specific tariffs enforced;
• the speed with which reciprocal tariffs are imposed, if at all; versus
• the speed with which companies can redirect their supply chains and adjust their customer demand bases; and
• the proportion of tariffs absorbed by companies within their profit margins to remain competitive against local and international peers

The UK runs a goods deficit of over £130 billion per annum of which about 10% is with the US directly. So for the average UK consumer, the direct implication of US originated tariffs on items we buy is fairly limited in scope. The impact of tariffs on things we sell is limited also with only about 10% of UK exports heading for the US directly. The bigger risk we face is the secondary impacts from companies and countries that are impacted to a higher degree:

• The tariffs would see a fall in global trade and excess production capacity around the world.
• This would undoubtedly be deflationary for the rest of the world and inflationary for the US.
• So in the short term, it could actually mean lower prices for UK consumers as companies try to boost demand for the excess capacity and high inventories by lowering prices.
• However, with the US representing about 20% of developed market trade, any significant drop in sales to this region will create severe negative economic effects elsewhere.
• This means companies would likely downsize in the face of lowered current and expected future demand. The interconnected nature of global trade means the impact of downsizing will ripple across countries.
• Jobs will be at risk and the UK will not be immune.
• Specific items that are the subject of reciprocal tariffs by the UK or EU towards the US would see price increases. Currently this appears to be focused on jewellery, whiskey and rear view mirrors, although orange juice, denim and motorcycles and are also in the firing line!

Carlo Alberto De Casa, Chief Analyst, ActivTrades: 

The trade war escalation is unsurprisingly scaring the markets. The main reason for this is actually the belief that this is only the beginning of the escalation, as China has already clarified that it will reply to US tariffs with its own. Of course, this could have many impacts. In the short term, US companies which are importing will have to pay more, while advantages for US producers will be positive, even if that’s a much smaller proportion overall. But what is scaring markets is definitely the long-term scenario, that the trade war will grow to affect more economical sectors.

This won’t only affect the big companies, it could also have a serious impact on smaller ones and retail consumers. A typical example to explain this is something like the beer can, the cost of which will rise due to the aluminum tariffs. The implications can be far wider than what you might originally think.

It is difficult to say whether this is a good strategy; we can surely affirm that this is a risky strategy as you can’t completely predict or control the effects it will have, especially in the long term. The ball is now firmly in the court of those who trade with America.

There’s little certainty that this will help drive the US economy. If this is the effect wanted by Donald Trump, then you have to consider that the tariffs which will be decided by other countries are what will drive the results. It could at best create jobs in one sector, but the additional jobs generated will likely result in a loss in other sectors. Overall, it’s hard to see this policy accomplishing its goals.

Bodhi Ganguli, Chief Economist, Dun & Bradstreet:

Rising protectionist measures from the US government are creating significant uncertainty for global businesses and adding to cross-border risks. After some optimism that the US hardline stance on tariffs was softening a bit, new announcements from the administration have re-ignited fears that the ongoing skirmishes could blow up into a full-fledged trade war, particularly between the US and China. The latest announcement came from President Trump on 22^nd June when he threatened to impose new tariffs of 20% on auto imports from the EU unless the EU removed tariffs on US goods. It should be noted that, some of these EU tariffs on US exports went into effect earlier the same day; these were retaliatory tariffs in response to US tariffs already implemented on steel and aluminum (most trading partners were exempted, except the EU, Canada and Mexico). Equity prices of major European automakers dropped immediately following the announcement, highlighting the intricacies of global supply chains and their dependence on smooth trade flows between nations. In fact, all major global stock markets have seen episodes of selloffs in the past few weeks in reaction to worries that trade restrictions are rising.

The latest round of proposed US barriers to free trade have come with a pronounced inclination by the US to move away from traditional norms of multilateralism based on the WTO principles, including measures specifically directed at longtime allies like the EU and Canada. This has the potential to spill over into other areas of geopolitical risk, and pose added headwinds to the global economy. While the extent of the EU retaliation is modest so far, other countries are stepping up or planning ‘tit-for-tat’ tariffs against the US. India just hiked tariffs on a selection of US goods, while similar Canadian tariffs are scheduled to come into effect on 1^st July. Of course, the biggest risk of disruption comes from the US-China spat; earlier the same week, China threatened to hit back with a combination of quantitative and qualitative measures after President Trump ordered his team to identify USD200b in Chinese imports for additional tariffs of 10% with provision for another USD200b after that if China retaliates. The global economy is still expanding; although divergences in policy are signaling desynchronization in the near term, it can still withstand some fluctuations in equity indexes. But the bigger underlying risk is that if the trade rhetoric does not die down, or if it becomes a significant headwind, stock markets will face sustained downward trends as investor confidence is impaired, eventually leading to a spillover into the real economy.

We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!

When it comes to monitoring social media usage in the workplace, just half (50%) of companies have internet guidelines in place despite new research from A&O IT Group revealing that SME staff are spending up to 57%of their day on popular social media channels.

The national review was investigating the potential long-term impact of overlooking IT support including having adequate internet guidelines in place to reduce the risk of cybercrime that can often lead to technology breakdowns.

Despite a third (30%) of SMEs admitting that they had lost at least one full working day due to technology issues and over two-fifths of them (42%) admitting that have lost income due to IT issues, the research highlighted that over half (54%) of SMEs across the UK don’t have annual IT check-ups that could identify and prevent potential system issues.

The survey from the specialist SME and small business IT support service indicated that Facebook is the biggest draw on time for SME business owners employees, with 33% saying their staff accessed it during their working day, compared to 14 per cent for Twitter and 10 per cent Instagram.

The findings follow the launch of A&O IT’s specialist SME and small business IT support service in the UK market. The new technology enables SMEs to tap into the same levels of expertise and experience enjoyed by big businesses across the globe. This includes a complete managed IT service through to crisis recovery, cyber security, remote data back-up, annual IT reviews, hardware management and cloud services.

(Source: A&O IT Group)

Cyberattacks have been widespread, common, and even expected now at firms worldwide. Many companies have been affected by cyber hacking, ransomware and threats, with reports emerging almost weekly about new attacks. It is now acceptable to be worrying about cybersecurity at a priority level, and if you aren’t, well you should be.

Finance Monthly, in this week’s Your Thoughts, asks what might be the long-term impact of cybersecurity attacks and similar cyber damage, not just to the individual firms and their pockets and operations, but to the markets they trade in, the economy of the countries they reside, and the overall global fluidity of markets.

Our guests this week answer questions such as: What are cyberattacks, the effects and impacts, doing to markets, the economy and our countries? How is trade affected in certain sectors? Do you have stats to show this? How do you think companies will react to cyber threats?

Dr Benjamin Silverstone, course leader for computing and quantitative business, Arden University:

The recent ransomware attacks have very publicly demonstrated vulnerabilities in business IT security. Firstly, the direct impact is that the business infrastructure is affected. Companies can be left unable to process orders, causing their operations to shut down, which directly affects their finances along with those of stakeholders. This leads to a second impact on business; consumer confidence.

A number of cyber-attacks in recent years have focused on obtaining personal details of customers and, where possible, defrauding them by pretending to be a familiar company. Rather than blaming the faceless cyber-criminals, consumers will increasingly turn to the company that is being impersonated to ask how this sort of thing could happen in the first place. The readiness to share details online, even with legitimate companies, is being affected and this will damage their business in the long term.

Ultimately, businesses need to consider the cost/benefit of investing in better security systems and changes in practice, to reduce the impact on their business-critical processes. Investment in these approaches may be seen as disproportionately high given the likely impact of an attack; but as we’ve seen successful attacks can, and do, negatively impact reputation in significant ways, and it is these intangibles that are hard to regain. Rather than an expense, improving security should be viewed as an investment, and insurance against brand damage to help ensure future longevity.

Oz Alashe, CEO, CybSafe:

When WannaCry struck in May, shares in cybersecurity and anti-virus companies surged. Once bitten, twice shy is the old adage, and being crippled by a cyber-attack makes for an uncomfortable AGM. The logical outcome from a global cyberattack is that companies invest in the latest cyber technology to prevent themselves being the next victim.

However, cyberattacks cover many facets. It can also include embarrassing phishing attacks that pranked the Morgan Stanley CEO, James Gormley, and the Bank of England’s Mark Carney recently. Phishing, albeit only one attack vector available to cyber criminals, is particularly noteworthy at present. A recent government survey suggested three-quarters of medium to large businesses in the UK had discovered at least one cybersecurity breach or attack, and a vast majority of these attacks were phishing emails or websites. The report also stated that a “sizeable proportion” of businesses didn’t have “basic protections” in place.

The National Crime Agency recently said that “many businesses failed to report attacks for fear of damaging their reputation.”

One of the biggest phishing incidents in recent history affected Google and Facebook, which both were scammed out of over $100 million in a sophisticated attack. This is concerning because it affects the supply chain and trade relationships. Trade is driven by trust, and if you can’t trust who you are trading with, it undermines the relationship.

What is the answer? Build trust; if you can equip staff with the skills to detect and prevent phishing and other cybercrime attempts you can empower everyone to be the first line of defence for cyberattacks.

Inga Beale, CEO, Lloyd’s:

Cyber-crime already costs an estimated $450 billion a year[1], and that figure is going to rise as more and more devices are connected to the internet and the sophistication of attackers grows.

This is having – and will continue to have – a huge impact on businesses. Lloyd’s new report on cyber risk, ‘Closing the Gap’, produced in association with KPMG and legal firm DAC Beachcroft, shows that as well as the immediate costs caused by cyber-attacks, slow-burn costs such as, litigation, loss of competitive edge and reputational damage can substantially increase the final bill. In today’s multi-media world, it can be the reputational fallout from a cyberbreach that kills modern businesses.

At the same time, more stringent regulations are being put in place, such as the EU’s General Data Protection Regulation – or GDPR – that will increase the penalty for companies that fail to protect European data from cyber threats. When this comes into force in 2018, the courts will be able to fine companies up to EUR20m or 4% of global turnover, whichever is higher, if they fail to comply with the new rules.

Despite these growing implications, it’s clear that many businesses are not facing cyber risk head-on. Recent Lloyd’s research shows that while 92% of respondents said their company had suffered a data breach in the past five years, only 42% are worried about suffering another breach in the future.

Nicola Whiting, COO, Titania:

The annual cost of cybercrime to the global economy is estimated to be between $375 billion and $575 billion (Mcafee, Net Losses - Estimating the global cost of cybercrime, June 2014) . Unsurprisingly the richest countries are hit hardest, with G20 nations suffering the bulk of losses. Low-income countries currently have smaller losses, partly due to their infrastructure and reliance on mobile Internet.  However, this may change as richer countries continue to invest more in their cyber security and as criminals find new ways to exploit mobile platforms.

The impact on countries is just as important when it comes to international relations. Just look at the hack of the Democratic party and the publication of confidential emails during the 2016 US presidential election, which elevated cyber security in the context of international affairs to a new level around the world.

Hackers will target any industry they can profit from, thus is highlighted by the wide range of nations and industries impacted by the ransomware attack last month. Aside from any financial loss the biggest impact can be on reputation and share price.

However, analysis shows that some sectors are potentially more at risk than others. For example, according to PricewaterhouseCoopers’ 2014 Global Economic Crime Survey, 39% of financial sector respondents said they had been victims of cyber-crime, compared with only 17% in other industries. Other research from Trend Micro assessed breaches that took place between 2005 and 2015 and showed health care as the most highly targeted industry for data breaches.

Any industry that stores customer information, such as credit card details, is a potential target. In 2015 Hilton Hotels, Starwood Hotels & Resorts, Mandarin Oriental and the Trump Collection all admitted that their payments systems had been compromised. Hilton and Starwood said guests’ personal details had been taken after hackers gained access via payment systems.  Hackers may have turned their attention to hotels after retailers began improving their security following a series of high-profile attacks on US chains in late 2013 and 2014, including breaches at Target and Home Depot. So any business that handles or stores sensitive data is at risk and once one sector builds its defences hackers will target another one they perceive to be weaker.

Most companies are not doing enough to secure the assets they’re creating. Large organisations can have incredibly complex networks and ‘border control’ issues as they can struggle to secure their IT infrastructure & supply chain. Smaller organisations find it easier to understand where their system borders are, but may lack resource and expertise to secure them.

In both there is inevitably more to be done in two key areas; reducing ‘human errors’ through security training and ensuring the ‘security basics’ are followed. The number of costly breaches that occur through basic training and security failures is astonishing – most of which could’ve been averted.

We’ve worked with everyone from the Department of Defence to small SME’s in creating tools to automate these security basics. Security automation is something all businesses should look at, humans beings make mistakes and when that inevitable ‘wrong click’ happens, it’s your next line of defence.

Patrick Martin, Cyber Security Specialist, RepKnight:

According to Forbes, Financial Services are in the Top-5 targeted by cyber-crime. This is borne out by the huge amount of data relating to the financial sector on the dark web. We put some of the UK’s leading financial services companies into BreachAlert, our software tool for searching and monitoring the dark web, and uncovered over 5,000 results. Each find contains thousands of pieces of information about financial services — most are as a result of a data breach one way or another.

Right now, cyber-criminals and bad actors are busy stealing data from within corporate networks and listing it for sale on the dark web. Most organisations neither know about it nor are they equipped to detect or do anything about it. Employee names, addresses, logins, and corporate credit card information is readily available, and companies carry on completely unaware of any illegal activity.

According to the 2017 IBM Ponemon report this year’s study suggests the global average cost of a data breach is down 10% over previous years to $3.62 million, due in large part to a strong US dollar. In the UK they assess £2.48 million to be the average total cost of a data breach. In addition, victims can suffer 5% drop in average stock price the day a breach is announced; 7% loss of customers and 31% of consumers discontinue the relationship. But things are about to get much worse next year when the EU enforces the General Data Protection Regulation (GDPR) with costs for organisations that suffer a data breach to be £20 million or 4% of their annual turnover, whatever figure is higher.

For most businesses, it can be next to impossible to find out if its information is on the dark web. So what can businesses can do to protect themselves? The key is for all businesses is to improve their understanding of how the dark web works, how criminals are using it to buy and sell their data and to put a plan in place to mitigate the damage once their data has been posted on the dark web.

The trick lies in acquiring advanced automated search technology and innovative data management processes. It’s vital for businesses to invest in this type of software that can monitor hundreds of dark web pages and filter and extract information based on things like card numbers and domain names. It’s even more essential to use software which can instantly alert you when your data is being shared or discussed on the dark web. The good news is that this type of software is already on the market and investing in it can save your business from receiving hefty fines from GDPR.

Pascal Geenens, EMEA security evangelist, Radware:

Today there are vibrant online marketplaces where just about anyone—even those with very limited technical knowhow—can buy tools to execute an attack. Cryptographic currencies enable untraceable digital payments, while old-fashioned economics is driving the growth of these marketplaces. Demand for services now outpaces supply, and DDoS-as-a-Service providers can bring in more than $100,000 annually.

Purchasing an attack can be surprisingly inexpensive. On the Clearnet, for as little as $19.99 a month, an attacker can run 20-minute bursts for 30 days utilising a number of attack vectors like DNS, SNMP, SYN and slow GET/POST application-layer DoS attacks. All an attacker has to do is create an account, select a plan, pay in Bitcoin and access the attack hub to target the victim by port, time and method. More advanced and larger botnets are also available for sale on the Darknet.

The motivation for people to pay for such attacks has different drivers, but profit is the most prevailing through the use of Ransom DDoS attack campaigns. The responses from nearly 600 enterprises world-wide confirm this through Radware’s annual ERT report: Ransom is the #1 motivation for cyber-attacks suffered by the respondents: 41% global average, 49% in Europe (half of the businesses!).

Recent trends such as cloud migration, digital transformation, automation (IoT, IoE) and serverless computing increase the number of targets for cyber-attacks. As our economies are becoming more dependent on these online technologies and dark marketplaces, dark marketplaces and economies will thrive on the potential of ransom DoS.

We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!

[1] http://www.cnbc.com/2017/02/07/cybercrime-costs-the-global-economy-450-billion-ceo.html