A truism about technology is that the fun stuff gets invented first. Incredible technologies that inspire us to work and play in new ways always go to the front of the queue. Fun is easy to sell, especially when – as in the case of virtual reality, which is so big in 2016 – we’ve never experienced it before.
Just take the sudden buzz surrounding Pokémon GO! It’s hard to round a corner without walking into another person that’s looking into the augmented reality within their phone instead of where they’re going.
Our ‘fun impulse’ means it’s much easier to sell betting apps, through which most people lose money, than long-term savings plans like pensions and ISAs, where they stand a very good chance of making a tidy little sum.
So it comes as no surprise that in the tech space cyber security is not a major area of public interest, and the development of cyber security solutions lags far behind that of more interesting digital tools.
And yet the ubiquity of digital devices and sensitive personal data means the world has reached a turning point. There is an unsaid ultimatum hanging over us, which goes something like this: create proper security solutions or face a global digital meltdown.
The Internet of Things
The problem, in a nutshell, is that the more technology blends into everything we do from driving our cars to heating our homes, the greater the potential threat posed by viruses and computer hackers.
In a world driven by the Internet of Things, failing to protect your devices is as bad as leaving your front door open with a welcome note inviting in burglars and squatters.
The situation is moving so quickly it’s hard to use hyperbole about the potential consequences facing people and businesses. A string of cyber attacks and data breaches in the last few years affecting huge multinational companies underlines the problem: if they can’t protect themselves, how can the average Joe on the street?
Criminals get inside organisations using clever – although often not particularly technological – tricks. They know a company’s IT system will have an array of defences, so they concentrate on human error, targeting instead the HR function, invoice processing or payroll.
In several documented cases they have hacked a system and instead of taking money, changed the details of major recurring invoices to suppliers. Now the money channels to their bank account instead of the intended recipient.
The beauty of this fraud is that no one finds out until the supplier phones up six months later asking where their money is. Accountancy professionals working in back office roles aren’t prepared for the cyber threat, so they don’t necessarily know what to look for.
Cyber baddies target individuals by removing small amounts of money from large numbers of bank accounts in scams that are hard to spot. They even trade personal details on the dark web.
In future, experts worry that scammers will look to other areas of our daily lives where it isn’t obvious how they could steal money, perhaps via commodities or property ownership. There is plenty of innovation in criminal communities and security firms are left playing catch-up.
Criminals operate in territories where there is very little recourse to the law, far away from where the crimes have their impact – and they may even be sponsored by rogue states. They are hard to track and even harder to catch. If one door is slammed shut by a security update, they simply open another one.
A famous thief once said he robbed banks because ‘that’s where the money is’. Now it’s in computers and the potential profits are as big as the companies that are exposed.
All companies have a vested interest in finding solutions, from those that create the gadgets, to the software vendors, to the old world businesses such as banks, accountants and lawyers that have now thrown open their digital doors to the world – whether they realise it or not.
For this reason, the next technology unicorn may not be a social network, phone manufacturer or communications provider, but a business that sorts out the unholy mess that fundamentally threatens global digital networks.
Plenty of companies are working on solutions but no holistic silver bullet has been uncovered – the blockchain is perhaps our best attempt so far. A solution must also be able to keep up with criminal innovation and prevent new tricks for compromising systems.
Investors, take note: in future truly enormous returns may not come from the fun stuff, but from products and services that make the fun stuff safe.
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