The November Forex Summit interviewed Dr. Anders Corr for his insights into the state of global Cyber security and the founders of URQUI who have come up with a new alternate to secure passwords. We’ve also covered important news items, trends and issues that impact the forex world including major global bank reaction to stiff fines for forex manipulation. ~ The Editors
The State of Cyber Security
Is There a Dark Cloud Over Forex Trading?
Whether swiping your credit card at Target or managing a billion dollar hedge fund, most of us have a gnawing feeling that our information is no longer safe in cyberspace. To find out about the state of cyber security we asked Anders Corr, Ph.D. Dr. Corr is a global authority on Cyber security and founder of Corr Analytics, a risk advisor to government and industry.
Q. Tell our readers about your Corr Analytics and how you got into the Cyber Security business
A. As security moves from physical structures to algorithms in the cloud, we believe there will be tremendous growth in cyber-security technologies, budgets, and contracts. We are exploring teaming agreements with lawyers and technologists who specialize in cyber-security, cyber-insurance, and actuarial approaches to cyber-risk.
Q. We’ve heard of Cyber-War. Is it really a war? A. Yes. The United States, China, and Russia are putting extensive resources into cyber-defense. An estimated 3% of the US defense budget is spent on cyber-defense, including public and black-budget expenditures. The US almost certainly has the most powerful cyber capabilities of any government. The military possibilities of cyber strategies are barely known, even to the government. However, military use of cyber strategies will grow exponentially in the coming decades. The US and Israel developed the Stuxnet virus, which they used to take control of and overheat Iranian centrifuges sometime before 2010. Stuxnet was thought to have destroyed up to 20% of Iranian uranium enrichment capacity. Attacks like this could take control of nuclear arsenals or trading algorithms, with potentially disastrous results.
Q. What motivates cyber attacks and who are the players?
A. Cyber attacks are launched by governments, criminals, terrorists, and teenagers. Unfortunately, these categories overlap. The motivations for cyber-attacks range from stealing data to disruption of enemy processes. Algorithmic traders need to protect their processes and intellectual property from disruption and theft, whether that is from competitors or enemies seeking to disrupt the economy in which the traders do business.
Q. What can the US do to protect us from cyber attacks?
A. The US and NATO needs to spend much more on cyber defense — on the order of 5 to 10% of total defense spending — to both defend against cyber attacks and to take the offensive if necessary. We need to get ahead of the Chinese and Russians, and determine whether cyber is an offense-dominant technology in warfare. If it is offense dominant, then the first mover has an advantage, and we need to consider going on the offensive rather than passively building cyber defenses as the French built the Maginot line prior to WWII. At the very least the US needs to hit back against offending countries for not keeping their cyber-criminals and cyber-troops under control. If a cyber attack emanating from Russia results in a major loss to the United States economy, then cyber tactics can be used to recoup those costs, plus penalties, from Russia. No penalty invites further attacks.
Q. What about out and out theft?
A. On July 25, 2013, the worst cyber theft to date was announced — a loss of $300 million. Ukrainian and Russian hackers stole 160 million credit card numbers from Visa, J.C. Penney, Jet Blue, and Carrefour, selling the data for $10 to $50 per card. The costs were never recouped from Russia or Ukraine.
Q. What is out government doing to thwart attacks?
A. The U.S. needs to do more against autocratic regimes that are targeting the United States and our allies. Russia has flown nuclear bombers near Europe recently, and China frequently harasses Japanese planes and ships in their own 200-mile Exclusive Economic Zone. The U.S. should be using its cyber superiority to degrade the abilities of the Russian and Chinese militaries, and bring them to the negotiating table on issues that matter to us — including nuclear proliferation, the China Seas, and Ukraine.
Q. Retailers, financial institutions, governments and the rich and famous have become cyber targets. Can an FX broker or small trader expect to fly under the radar?
A.Small businesses need to educate themselves on cyber-hygiene, and practice due diligence by asking their partners, suppliers, and contractors to disclose their cyber-security practices and preparedness. Small businesses, however, need to team with larger businesses to lobby government and provide greater cyber-security protections to the companies that compose the U.S. economy.
URQUi Makes Passwords Passé
Whether running a big forex brokerage firm, or trading solo, cyber security comes down to personal computer hygiene, which includes having to remember more and increasingly complicated passwords.
But if Ken Jennings has his way, you’ll never have to remember another password again. Jennings is co-founder and vice president of URQUi an innovative Canadian startup He believes his company will make passwords obsolete. URQUi, pronounced your key, is a patented, secure network or SaaS password alternative.
URQUi one-time passwords do away with transmitting and storing static passwords on servers as well as having to remember them. URQUi guarantees users security, anonymity and privacy. Identity theft today costs businesses around the world over $221 billion annually and the failed paradigm of user names and static passwords is at the root of the hacking and ID theft pandemic.
With URQUi’s app, one can securely log into multiple websites using a mobile phone without exposing personal information. So individual online identity will always be safe.
URQUi is free to individuals, non-profit organizations, government agencies and anyone with critical information to protect. Installation and registration is as easy as 1-2-3. It even works on most non-smart phones. Password alternatives like biometrics put fingerprints and iris scans all over the Internet.
Hardware tokens are expensive and need to be shipped. Vaults cannot protect one if the vault or the servers being used are hacked. And Out-of-Band-Authentication falls apart if there is no cell service or Wi-Fi available. In this environment, URQUi offers real benefits for server customers and users.
Even though the company is still in its early stages, URQUi is already an official ambassador of Privacy by Design, the international de facto standard for privacy.
The more information that is stored online, the greater is the risk that information will be compromised. URQUi, a security technology of the future, eliminates that risk. To learn more, please visit URQUi.
Bank Fine Fallout
Lessons of Forex Trading: Learn From Your Losses
HSBC sets aside $378m for potential forex-rigging fines
HSBC became the sixth bank worldwide to confirm a potential penalty for rigging the £3.5tn-a-day currency markets but was the first to give a clear picture of the scale of the fine likely to be imposed by the Financial Conduct Authority, the UK regulator that is aiming to announce a coordinated settlement. for more.
London Forex Fix Moves to Five Minute Window
London’s benchmark foreign exchange “fixings” will move to a five-minute calculation window from one-minute currently as of 2200 GMT on Sunday, December 14, the WM Company said in a memo sent to banks on Monday. The move by WM, a unit of State Street Corp, follows the levying of the first fines on banks in a row over alleged manipulation of foreign exchange markets and the fixings, used to set reference values for thousands of contracts world-wide. Business Recorder
Mideast Reaction to Big Bank FX Scandal
… some major investors have said this latest costly scandal makes them wary of holding bank shares. The affair could also lead to more interest in banks that are based in places like the Gulf with tighter regulations and enforcement. For more on that point Business Middle East’s Daleen Hassan spoke to Nour Eldeen Al-hammoury the chief market strategist with ADS Securities in Abu Dhabi. DH: “How much does this sort of thing undermine trust and worry people in the industry?” NAH: “Well this is not the first or the last scandal. However, this year has been the most expensive for the banks due to the fines from the regulators. Of course it affects the trust in the banking sector further, especially that these banks have also a bad record on this kind of manipulations. However, the regulators need to come up with strong measures to cap these acts.” For the rest of this Q&A.
FX Events and Webinars
iFXEXPO Asia by Forex Magnates and ConversionPros
This January 27-29 in Hong Kong—The iFX EXPO is the premiere retail finance business to business expo. Forex Magnates has consistently increased the size each year since its first show. The organizers states, “We have always maintained a high standard providing both the delegates and the exhibitor’s value. We expect to achieve over 2,000 delegates that attended our previous expo making this not only the largest expo of its kind.” Register for free
Get Into The Chinese FX Market
on December 9-10 is a premier event for introducing global brokers, solution providers, money managers to the Chinese FX and binary option market. In-depth information on the local market as well as networking opportunities. Co-hosted by FXShell, the leading FX B2B portal in China, and Shift Forex, a New York-based FX consulting firm.Details and Registration.
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