US, Oct 8, 2020, ZEXPRWIRE, Now is the time for regulators to step in and step up.
When talented individuals, bankrolled by rogue nations (the usual suspects being North Korea, Russia, and Iran), attack our financial, healthcare, and industrial players at an increasing rate and level of sophistication, the risk to our societies’ and economies’ stability is real. Regulators have to take charge of the issue and promptly lead a proactive discussion about cybersecurity in order to act swiftly and decisively. This cannot be another situation where it is urgent to wait; the stakes here are just too high for all of us.
The European Banking Authority has opened a consultation on support for the use of RegTech across the EU; cybersecurity is one of the topics that this consultation will cover. This is a timid step in the right direction and is already more than what is happening in many other regions.
Some of the actions that should be taken as quickly and proactively as possible to get in front of the problem are: setting up specifications, guidelines, and standards; establishing formal collaboration channels between countries; and implementing an overarching international body. Distributing fines a posteriori is not helping the industry much in protecting itself and its clients, but at least it should keep the industry honest (even though we had a suspicious 45% decrease in data breach reports in the UK in Q2 2020). It is important for countries to collaborate on this topic, despite many protectionism trends and posturing. At this point, if regulators are not stepping in, the industry needs to (wo)man-up and self-organize. China is launching its own initiative to set global standards on data security, aiming to counter the US Clean Network Program announced earlier this summer. This is an opportune time for countries to team up with other like-minded countries and weigh in on the topic. It is likely that most of the world would rather see data security standards coming from a coalition of countries than standards coming from only one country that are fraught with personal agendas.
In parallel, scaling up the re-training of employees within organizations and implementing new university programs in cybersecurity would provide much needed competence in the industry. “Jazzing up” the space would be beneficial to attract a more diverse talent set, as so far the space has not necessarily brought profiles with strategic mindsets, political savviness, or leadership skills. To be successful, cybersecurity experts need to have more than just the technical skill set; they need to undergo a transition similar to the one technology leaders underwent 20 years ago.
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- We’ll see more consolidation in the cybersecurity space, with companies either moving from point solutions to platforms or being acquired. Companies to watch: ReliaQuest, Stealthcare, Plurilock, Naoris.
- Cybersecurity valuations will continue to enjoy healthy multiples, with more money being directed towards the space directly and indirectly. Fund to watch: Evolution Equity Partners.
- FIs and Fintechs will have to support higher costs to fight cybercrime, putting pressure on their profitability; this creates a less attractive risk/return profile.
- Fintechs will require more capital to reach bank-grade security standards, increasing their barriers to entry.
- Financial Services investors will have to get smart about cybersecurity and increase their focus in this area during due diligence.
- A large FI or Cybersecurity player, whether in conjunction with regulators or not, should take the lead in launching an industry utility, commercializing “turnkey” protection in some areas for smaller players, and organizing the industry to better collaborate. Most likely movers: Blackberry, CarbonBlack, Fortinet.
About Peggy Van de Plassche
Peggy is a Senior Advisor to PE/VC funds, Fintechs, asset managers, and banks. She focuses on growth and transformation via strategic partnerships, sales process optimization, products & geographies expansion, product roadmap validation, and client procurement process navigation.
Peggy has spent close to 20 years in the IT and financial services industries as an advisor, executive, investor, entrepreneur, and board member in leading financial institutions, as well as software and IT services companies such as BMO, CGI, CIBC, FrontFundr, Invest in Canada, and Zoom.ai.
Her client base includes Fortune 500 companies and leading organizations such as BMO WM, HOOPP PE, Impak Finance, OMERS VC, Portag3 VC, and Wondeur AI.
For more information:
Linkedin profile: https://www.linkedin.com/in/peggy-van-de-plassche/
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Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Ireland Daily News journalist was involved in the writing and production of this article.