CEO ‘disconnect’ a cyber concern

BY Richard Summerfield

Though cyber security is one of the biggest issues of our time, a misalignment between CEOs and technical officers, including CIOs, CTOs and CISOs, is weakening many organisations’ cyber security postures, according to a new report from Centrify titled ‘CEO Disconnect is Weakening Cybersecurity’.

The report, which saw over 800 executives surveyed by Centrify and Dow Jones Customer Intelligence, suggests that discord among C-suite leaders is leaving companies increasingly vulnerable to attack. The report claims that “the CEO response to cybersecurity is misaligned with reality”.

Sixty-two percent of CEOs cite malware as the primary threat to cyber security, compared to only 35 percent of technical officers. Only 8 percent of all executives stated that anti-malware endpoint security would have prevented the “significant breaches with serious consequences” that they experienced. Technical officers believe that identity breaches – including privileged user identity attacks and default, stolen or weak passwords – are the largest threat companies face, not malware.

Poor investment decisions made by CEOs – 60 percent of CEOs are investing the most in malware prevention and 93 percent indicate they already feel ‘well-prepared’ for malware risk – and poor communication between CEOs and technical officers are further cause for concern. Eighty-one percent of CEOs believe that they are most accountable for their company’s cyber security strategy, while just 16 percent of technical officers agree. Seventy-eight percent of technical officers believe that they are most accountable for the company’s strategy.

“While the vast majority of CEOs view themselves as the primary owners of their cybersecurity strategies, this report makes a strong argument that companies need to listen more closely to their Technical Officers,” said Tom Kemp, chief executive of Centrify. "It’s clear that the status quo isn’t working. Business leaders need to rethink security with a Zero Trust Security approach that verifies every user, validates their devices, and limits access and privilege.”

To bridge the gap between CEOs and technical officers, the report suggests that all parties must share their perspectives on the issues surrounding cyber security, but ultimately CEOs must alter their understanding of the threats they face. While malware is an issue, CEOs must change their mindsets, realign their cyber security spending and focus more heavily on the importance on combating identity breaches.

Report: CEO Disconnect is Weakening Cybersecurity

AI fears abound

BY Richard Summerfield

Artificial intelligence (AI) and machine learning have the potential to revolutionise many aspects of our professional and personal lives. In the decades to come, the potential benefits to be gained from embracing technology solutions will be remarkable. That said, the negative impact of AI and machine learning is widely debated, and it may have unintended consequences.

The risk of immoral, criminal or malicious utilisation of AI by rogue states, criminals and terrorists will grow exponentially in the coming years, according to 'The Malicious Use of Artificial Intelligence: Forecasting, Prevention, and Mitigation' report. The report is authored by 26 experts in AI, cyber security and robotics from universities including Cambridge, Oxford, Yale, Stanford and non-governmental organisations, such as OpenAI, the Center for a New American Security and the Electronic Frontier Foundation.

Yet despite the potential risks posed by malicious actors, many institutions are wholly unprepared. For the authors, over the course of the next decade, the cyber security landscape will continue to change and the increased use of AI systems will lower the cost of a cyber attack, meaning that the number of malicious actors and the frequency of their attacks will likely increase.

“We live in a world that could become fraught with day-to-day hazards from the misuse of AI and we need to take ownership of the problems – because the risks are real. There are choices that we need to make now, and our report is a call-to-action for governments, institutions, and individuals across the globe,” says Dr Seán Ó hÉigeartaigh, executive director of Cambridge University’s Centre for the Study of Existential Risk and a co-author of the report.

In response to the evolving threat of cyber crime and the potential misappropriation of AI, the report sets forth four recommendations. First, policymakers should work with researchers to investigate, prevent and mitigate potential malicious uses of AI. Second, researchers and engineers in AI should take the dual-use nature of their work seriously, allowing misuse-related considerations to influence research priorities and norms. Third, organisations should identify best practices where possible in research areas with more mature methods for addressing dual-use concerns, such as computer security, and imported where applicable to the case of AI. Finally, companies should actively seek to expand the range of stakeholders and domain experts involved in discussions of these challenges.

Report: The Malicious Use of Artificial Intelligence: Forecasting, Prevention, and Mitigation

Oil & gas M&A outlook optimistic despite five-year low deal volume, says new report

BY Fraser Tennant

An optimistic 2018 is the outlook for mergers and acquisitions (M&A) in the oil & gas sector, despite deal volume last year being at a five-year low, according to a new EY report.

In  its ‘Global oil and gas transaction review 2017’, EY reveals that global oil and gas deal volume hit a five-year low in 2017, with total global transaction value falling to $343bn from $390bn in 2016. Furthermore, while 2017 saw a 21 percent increase in megadeals (deals of more than $1bn), a lack of blockbuster deals (deals of more than $50bn), meant overall deal value fell.

In terms of upstream transactions, deal value climbed to $172bn in 2017, characterised by a strong first quarter and outpacing average deal value across the rest of the year by more than 82 percent. North America dominated upstream activity, with deal value up 19 percent to $94bn. Last year also saw Europe’s best performance in more than five years at $27bn.

Furthermore, increasing activity among private equity players and the adoption of more innovative transaction structures are expected to drive upstream M&A in 2018, as joint ventures between independents become increasingly common and healthier balance sheets encourage growth.

“Risk sensitivity and a continued focus on internal performance improvement may have delayed the uptick in deal volume we expected in 2017,” said Andy Brogan, EY global oil & gas transactions leader. “But the need to demonstrate appropriate returns is now pushing companies to reposition their portfolios and seek economies of scale, which in turn we anticipate will underpin more M&A activity in 2018.”

The report also states that midstream deal volume was up 14 percent in 2017, but deal value contracted to $84bn, down 43 percent relative to 2016. Turning to downstream transactions, deal value declined 12 percent to $59bn in 2017, with the number of transactions also dropping 16 percent compared with 2016. That said, deal values in 2017 were more than $14bn higher than the average recorded over the last five years. The US led other regions in both deal volume and value, with 43 transactions totalling $32bn.

“A lack of blockbuster deals in 2017 highlights the industry’s sense of caution in the post-downturn era,” added Mr Brogan. “But buyer and seller expectations have been narrowing and a robust pipeline of actionable M&A opportunities is now available, underpinned by an increase in the oil price, decreasing valuation gaps and improving market sentiment.

“We expect these trends to continue to prevail in 2018, with M&A activity flowing from portfolio optimisation, increased access to capital markets and value chain integration,” concluded Mr Brogan.

Report: Global oil and gas transactions review 2017

FinTech market in Asia-Pacific to hit $72bn by 2020, new data suggests

BY Fraser Tennant

The FinTech market in the Asia-Pacific region is growing significantly and set to reach a value of $72bn by 2020, suggests new data from Frost & Sullivan.

According to the firm, the positive outlook for the FinTech industry in the region is being fuelled by a growth in digital payments, such as increasing adoption of cashless payments by small and medium sized enterprises (SMEs). Also, there is more widespread awareness of the viability of using P2P financing as well as new methods of crowdfunding using Blockchain, which Frost & Sullivan believes will lead to growth in the personal and business financing segment.

Furthermore, new innovations are expected to radically transform the way consumers shop, pay, perform banking transactions and purchase insurance. The wave of new FinTech technologies is also changing customer behaviour and interactions today.

Speaking at Frost & Sullivan’s annual review and outlook for the FinTech industry in Asia-Pacific, Spike Choo, consulting director in the firm's ICT Asia-Pacific practice, outlined the emerging trends in FinTech for 2018, making special mention of his expectation that more innovative FinTech services will be launched in the areas of financial investments and advisory services, as well as insurance due to advances in Big Data analytics, artificial intelligence (AI) and blockchain.

Much of the growth being seen in the region’s FinTech ecosystem is a result of the active support and initiatives provided by financial regulators such as the Monetary Authority of Singapore (MAS), Bank Negara Malaysia (BNM) and Bank Indonesia (BI), noted Mr Choo.

A major feature of Frost & Sullivan’s review and outlook was the future of cashless payments in Singapore. According to Quah Mei Lee, industry principal, ICT, Asia-Pacific, the mobile payments market in Singapore was estimated to be worth $1.4bn in 2017. Although the market is still small, Ms Mei Lee there are many supportive regional and local regulations and initiatives that will help Singapore move towards a cashless society. Ms Lee was also keen to stress that mobile payments of the future needs to be global first, inter-operable and secure, with global alignment being key to mobile payments going mainstream.

Rounding out the firm’s FinTech industry outlook was a focus on customer experience (CX) in the banking, financial services and insurance (BFSI) industry. According to Nishchal Khorana, Frost & Sullivan’s consulting director, ICT, Asia-Pacific, a successful CX strategy would be based on an integrated approach to people, processes and technology in the digital era.

Transformative, informative and innovative, it promises to be an exciting year ahead and beyond for FinTech in Asia-Pacific.

News: Asia-Pacific fintech market to reach US$72 billion by 2020, finds Frost & Sullivan

General Dynamics to acquire CSRA for $9.6bn

BY Richard Summerfield

US defence contractor General Dynamics Corp is to acquire CSRA Inc. for about $9.6bn – including the assumption of $2.8bn in CSRA debt. The deal will see General Dynamics pay $40.75 per CSRA share – a 32 percent premium to its Friday closing price of $30.82. The transaction is expected to close in the first half of 2018.

The acquisition of CSRA is General Dynamics' largest ever deal, easily eclipsing the $5.3bn the company paid for Gulfstream Aerospace Corporation in 1999.

“The acquisition of CSRA represents a significant strategic step in expanding the capabilities and customer base of GDIT,” said Phebe Novakovic, chairman and chief executive of General Dynamics. “CSRA’s management team has created an outstanding provider of innovative, next-generation IT solutions with industry-leading margins. We see substantial opportunities to provide cost-effective IT solutions and services to the Department of Defence, the intelligence community and federal civilian agencies. The combination enables GDIT to grow revenue and profits at an accelerated rate. It will allow us to deliver even more innovative, leading-edge solutions to our customers.”

Larry Prior, chief executive and president of CSRA, said, “Our combination with General Dynamics represents an excellent outcome for CSRA’s stockholders, employees and customers. It builds on strong shared values, culture and a passion for serving our customers’ missions. We believe that this combination creates a clear, differentiated leader in the Federal IT sector, with a full spectrum of enterprise IT capabilities, including unique depth in Next-Gen offerings in conjunction with our commercial IT alliance partners.”

The deal for CSRA comes at a delicate time for General Dynamics. The company’s revenue over the last two quarters has disappointed investors. General Dynamics reported sales of $31.35bn in the year ended 31 December. CSRA generated revenue of $4.99bn in the fiscal year ended 31 March. Ninety-four percent of CSRA’ revenue last year was derived from US government contracts.

CSRA provides IT, mission and operations-related services to the Department of Defence, the intelligence community and homeland security. With defence spending expected to rise in the coming years, the timing of the deal for CSRA will likely be advantageous for General Dynamics.

News: General Dynamics to buy federal services provider for $6.8 billion