Is the latest Wikileaks story connected with the battle raging between the Trump White House and the country's intelligence community? Global media are agog this morning after Julian Assange and his fellow hackers released documents that purport to be a CIA manual for hacking and surveillance, often using vulnerabilities unbeknownst even to the vendor. The development suggests that the CIA — now back in the driving seat after years of news about the National Security Agency — has had to adjust as people began to favour more secure options such as the iPhone and WhatsApp. The documents imply that security services can no longer effectively hoover up all electronic communications, as suggested by the Snowden leaks four years ago, but have to target individual devices. While your WhatsApp message might be encrypted during transmission, there's still a time-window where surveillance can see what you type before it gets encrypted. As Edward Snowden pointed out yesterday, the leaks suggest that security agencies exploited critical vulnerabilities in software — including the iPhone's operating system — rather than sharing the information with manufacturers. The hacked information appears to fall under the purview of the CIA's recently formed Directorate of Digital Innovation, a fintech-influenced title if there ever was one.
Those of you who have seen the documentary Zero Days will know that cyberweapons, which are essentially lines of code and thus copiable at marginal cost, can easily escape into the digital wild, where criminals can then turn them to nefarious purposes. If Wikileaks is to be believed, critical cyberweaponry has escaped the clutches of American authorities. The leaks therefore raise enormous questions about global cybersecurity: insurers service banks and financial institutions based in part on adherence to standards such as those
created by the International Standards Organisations. (Checking this morning on the ISO20022 standard, Lafferty News noticed that Google has appended a note — see image — to its link to the ISO website warning that it may have been hacked.) In a perhaps unrelated development — bearing in mind that sowing confusion is a tactic of intelligence services — there is news this morning from Bloomberg that North Korea has been ejected from the SWIFT consortium.
Do the leaks have global implications for the finance and insurance industry? We will soon see. The 'Smart TV spies on you' headlines suggests that British intelligence is behind directives on how to enable a TV to be in 'off' mode and still spy on its owners. Yet all of this is already widely known or suspected. (Photos of Mark Zuckerberg surfaced last year revealing his Mac laptop bearing a piece of tape over its camera lens.) The movement to hype the Internet of Things has taken an enormous blow. How will the news hit Apple, the world's most valuable company? The integrated software and hardware for iOS has allowed Apple to take on even global banks because of its claims to impenetrability — with the FBI being forced to hire a foreign security company to crack an iPhone that Apple declined to open. Now we might ask: was this a charade?
UK retail and commercial challenger bank Shawbrook revealed yesterday that it had rejected an attempted takeover bid of £825 million from private equity groups Pollen Street Capital and BC Partners. Pollen Street Capital, which invests in financial services, was a major player in the listing of Shawbrook in 2015. In a statement, the board of the bank said: "Taking into account the terms of the revised proposal, the confidence the board has in Shawbrook's strategy and plan and the feedback from Shawbrook's major institutional shareholders, the board has concluded that it is not willing to recommend the consortium's revised proposal." The bank announced that "net operating income in 2016 grew to £209.6m from £166.9m in 2015," reports City AM. "Statutory profit before tax was up to £88.2m from £70.1m, and profit rose to £64.8m from £58.5m. Underlying pre-tax profit was £91.4m, compared with £64.1m in 2015."
Long keen to encourage the fintech business, Dubai regulators have approved peer-to-peer lender Beehive, which will operate out of the Dubai International Financial Centre (DIFC). "This should be interesting," said one of Lafferty's correspondents, who noted that there is already a good deal of social lending in Dubai, which has an enormous proportion of guest workers in blue and white collar jobs, not all of whom will be sending money home on a weekly or monthly basis. Beehive began in the marketplace invoicing space, after spotting a hole in the market for funding SMEs. The formalisation of the peer-to-peer lending sector might offer opportunities to those workers and even help to support start-ups. Salmaan Jaffery, an executive at the DIFC Authority, said in a statement: "I'd like to welcome Beehive to the DIFC. Their presence reinforces how the DIFC is leading the way in the region for innovation and developing the fintech sector."
News from the Australian banks' appearance before a parliamentary committee: "Soaring home prices in Australia's biggest cities don't necessarily mean the country is in the grip of a housing bubble, according to the heads of the nation's biggest banks," according to Bloomberg. The article cited a recent warning from the OECD that the biggest threat to the country's economy is a hard landing in the property market. "Testifying before a parliamentary committee, the chief executives of National Australia Bank, Westpac and Commonwealth Bank of Australia all said that while they are worried about elements of the housing market, prices aren't over-inflated."
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