Extreme Cyber-Attack Could Dwarf Natural Disaster Costs

A major global cyber-attack has the potential to trigger up to US$53 billion of economic losses – greater than some of Australia’s worst natural disasters combined.

The equivalent cost is more than five times the economic losses recorded for the devastating 2011 Queensland floods, one of the most damaging natural disasters recorded at an estimated cost of A$14.1 billion or US$10.7 billion.

The joint research undertaken by Lloyd’s and cybersecurity advisor Cyence examined the potential economic impact of two global scenarios:

A malicious hack that takes down a cloud service provider with estimated losses of up to US$53 billion; and
Attacks on computer operating systems run by a large number of businesses around the world, which could cause losses of US$28.7 billion.
The research acknowledged that economic losses could be much lower or higher than the average in the scenarios because of the uncertainty around cyber aggregation.

For example, while average losses in the cloud service disruption scenario are US$53 billion for an extreme event, they could be as high as US$121 billion or as low as US$15 billion, depending on factors such as the different organisations involved and how long the cloud service disruption lasts for.

The findings also revealed that, while the global demand for cyber insurance is on the rise, the majority of losses are not currently insured, leaving an insurance gap of tens of billions of dollars.

Cyber risk exposures
Asked about the implications for Australia, Lloyd’s general representative in Australia, Chris Mackinnon, said the implications were huge for local businesses of all sizes and across all sectors.

“Businesses today are interconnected by digital technology and services, meaning a single cyber event can cause a severe impact across an economy, triggering multiple claims and dramatically increasing insurers’ claims costs,” he said.

“This report gives us a real sense of the extent of damage a single, extreme cyber-attack could cause. An attack of that magnitude could create losses bigger than of some of Australia’s worst natural disasters combined.”

Putting that into perspective, the 2009 Black Saturday bushfires in Victoria cost an estimated A$7 billion; the 2011 Queensland floods cost A$14.1 billion and the 1989 Newcastle earthquake cost A$18.7 billion.

“Where a decade ago people would talk about preventing a cyber-attack, the reality today is that any business with proprietary information worth protecting is vulnerable to attack. The issue is how you mitigate against that risk,” Mackinnon said.

“These scenarios are designed to help both businesses and insurers gain a better understanding of their cyber risk exposures and better manage these complex and rising risks.”

Since its inception in 2014, there have been over 114,000 reports of cybercrime registered with the Australian Cybercrime Online Reporting Network (ACORN). Notably, 23,700 of these have been reported over the last six months, highlighting a growing occurrence of cyber-criminal activity.

Source: RFi Group

Ant Financial Cooperates With Fuzhou To Develop Cashless Society

Ant Financial, the financial arm of the Chinese e-commerce giant Alibaba has clinched an agreement with Fuzhou to develop a cashless society.

Fuzhou will be the third Chinese to develop a cashless shopping environment together with Ant Financial following Hangzhou and Wuhan. This cashless development will be supported by an alliance which has been formed between Ant Financial and over 20 institutions including Fuzhou Municipal Bureau of Commerce and State Grid Fujian Electric Power Company.

The campaign is expected to help over 90% of merchants and businesses in the city to operate cashless by the end of this year.

Currently, 95% of the taxi fleet, 85% of supermarkets and convenience stores and 80% of restaurants accept mobile payments and customers between 20 and 40 years old make up 80% of all these users.

In the partnership, Ant Financials, through its Alipay payment service, will aid the city in a few areas of development, namely transport, commercial and government services. These developments will set up the infrastructure which allows residents in Fuzhou to shop and travel simply with a smart phone.

According to RFi Group’s data on payments, Alipay is among the top 3 most important payment methods in China, with 74% of the banking population having used it in the last 12 months.

Safaricom Looks to PhotoID to Curb M-Pesa Fraud

Safaricom is set to give merchants access to photo identification technology in a bid to reduce fraud on its m-Pesa platform, Business Daily reported.

According to the newspaper, Safaricom is already distributing pre-programmed smartphones to m-Pesa agents to verify the identity of customers. These handsets have software built-in to enable verification against images taken when the SIM card was purchased and other nationally held data.

Vendors with the devices will also be required to take images of all new registrants, which will then be stored in a database for verification of future transactions. This is in addition to current procedures, which include recording the new user’s name, ID card number and postal address.

M-Pesa is Kenya’s dominant mobile payment service and become a blueprint for similar services across developing markets. However, its wide usage also made the platform and its users a target for criminals.

In addition to well-documented hacking attempts against the company, there are regular reports in the Kenyan media of scams targeted at users to extort money using the platform.

Announcing the new photo ID scheme, Safaricom corporate affairs director Stephen Chege told the publication the new system of registration would eliminate the use of stolen personal ID to commit fraud.

Source: Mobile World Live

Sumitomo Mitsui, MUFG Join Ripple’s Japanese Banks Consortium

Ripple, a US-based provider of financial settlement solutions, has added two new members to its Japanese banks consortium, Sumitomo Mitsui and MUFG.

As a result, the Asian consortium has 61 members, representing over 80% of total assets in Japan. SBI Ripple Asia created the consortium in August 2016, and consisted of 15 banks connected by a network, focused on Ripple’s blockchain technology for payments and settlement.

The consortium later grew to 47 banks that successfully completed a pilot implementation of the startup to enable real-time money transfers, both domestically and internationally.

The announcement said that three major banks, Sumitomo Mitsui Banking Corporation (SMBC), MUFG and Mizuho have joined the Japan bank consortium. Apart from these banks, Ripple also welcomes Japan Post Bank to the roster of the banks using Ripple for payments in Japan.

Furthermore, the startup said that it plans to launch a common mobile application later in 2017, for payments that will unite all the member banks’ customers worldwide.

Stripe Enables Merchants To Accept Alipay and WeChat Pay

Silicon Valley payments company Stripe has partnered with digital payment providers Alipay and WeChat Pay to enable merchants using its platform globally to accept payments from hundreds of millions of Chinese consumers.

Starting Sunday, the partnerships allows online merchants using Stripe to integrate the ability for Chinese users to pay with Alipay and WeChat Pay on their websites, the company said.

Stripe hopes the integration will help boost its revenues by allowing clients to tap China’s vast consumer market, where credit cards account for only a fraction of online spending, the company said.

See the full article here.