AI Takes Cybersecurity vs Cybercrime Fight to Whole New LevelNov13

Daily Intelligence Briefing

Monday, November 11, 2019

Cybersecurity

Research finds 2019 increase in breaches and cybersecurity spending

A new Ponemon Institute survey of nearly 3,000 security professionals in nine countries found steep increases in cybersecurity spending yet corresponding rises in the number and scale of attacks. Respondents saw a 17% growth in cyberattack volume and a nearly 30% increase in attack severity.

On average, organizations are now having to spend 34% more of their budget per week on patching alone compared to last year. Annual spending on vulnerability management activities increased to $1.4 million, an increase of an average of $282,750 from 2018.

This year also saw an increase in the number of companies affected by attacks. Nearly half of organizations in the survey had been hit by at least one cyberattack in the last two years. More than 50% of respondents from the Healthcare and Energy & Utilities industries said their enterprise experienced a breach while the Public Sector and Services had the least.

One of the biggest problems security departments are dealing with involved automation, or lack thereof. Respondents told Ponemon cybercriminals were increasingly automating their attacks while security teams were not using all of the available AI and machine learning defense tools on the market. Eighty percent of those who spoke to Ponemon said that with the help of automation they have been able to cut the amount of time it takes to respond to vulnerabilities.

Read the full article from TechRepublic +

Cybersecurity

Cybercrime, meet AI

One of the eternal truisms about cybersecurity is that it’s a cat and mouse game – and cybersecurity often seems to be behind the ball. Now, however, with artificial intelligence (AI) – essentially advanced analytical models – coming onto the market, cybersecurity actually has the edge.

The value of AI in this model is that it lets companies take large volumes of information and find clusters of similarity. It can whittle down vast quantities of seemingly unrelated data into a few actionable incidents or outputs at speed, giving companies the ability to quickly pick out potential threats in a huge haystack.

The ability to quickly turn large amounts of data into actionable insights is something that cybersecurity teams are going to need in the coming years, because AI could become a formidable enemy. Unlike malware, which is purely automated, AI is beginning to mimic humans to a worryingly accurate degree. It can draw pictures, age photographs of people, write well enough to persuade people of truths – or lies.

This means that AI could theoretically industrialise the reproduction of human hacking tactics, which are currently the most damaging but also the most time-consuming form of attack for hackers. The best, most difficult hacks to detect are those performed by humans – digging into systems, watching user behaviour and finding or installing backdoors.

An AI program could find clusters and patterns in the data set and use them to work out who could be a good target for a future attack. You could connect their families, their health problems, their usernames, their federal projects – there are lots of ways to use that information.

While it’s likely that AI-powered hacking will begin its life as the preserve of nation-states, it’s only a matter of time before this sort of attack becomes commonplace in the regular market.

Read the full article from TechNative +

Cybersecurity

An innovation war: Cybersecurity vs. cybercrime

EBSCO Industries started using a cybersecurity tool that uses artificial intelligence (AI) to hunt down and help eliminate breaches. Soon after, security analysts at the information services company found failed login attempts the product had ignored. Thinking the unsuccessful sign-ons might signal a cyberattack, the security team launched a manual investigation.

“It was an employee who put his password in wrong,” says John W. Graham, global chief information security officer at EBSCO, a $2.8 billion conglomerate. It took the team two hours to research the issue; they won’t waste time on that again. Instead, they’ll trust the tool.

Graham’s experience is typical of how AI technology buys back security analysts’ time and resources. Some 61% of corporations can’t detect breaches without AI-driven cybersecurity technology, according to a study from Capgemini.

But for every advance in cybersecurity that puts organizations ahead, there are new cybercrime enhancements that set them back again. Cybercrime tools that incorporate AI are outstripping their cybersecurity counterparts―malware today can pinpoint their targets from millions, generate convincing spam, and infect computer networks without being detected.

Read the full article from MIT Technology Review +

Cybersecurity

FBI stresses cybersecurity amid rash of scams

The Federal Bureau of Investigation has issued a warning to Portland residents about cyber crime after a family was scammed out of a down payment on their house.

The Portland FBI office has received more than 2,000 victim complaints about computer-enabled crimes in just the last 9 months. One of the growing crimes is from thieves hacking into company email accounts and then posing as the business, communicating with customers and intercepting payments.

One victim of this scam said he wired $123,000 for a house down payment to what he thought was the bank in directions from what he thought was the title company. The email looked like all the other correspondence he had with the title company. It even included familiar names and phone numbers of people he had been working with at the title company. However, the final email with instructions on where to wire the money was a sophisticated scam.

It’s the same type of crime that happened to the Portland Public Schools a few months ago. Almost $3 million was wired by the district to a fake contractor. Scammers have moved on from the days of misspellings and strange domain names, according to the FBI.

Read the full article from KOIN +

Cybersecurity

Cybersecurity scam called ‘formjacking’ on the rise

A new cybersecurity scam called “formjacking” is on the rise. Hackers are injecting malicious code into websites and capturing your sensitive information which can be sold on the dark web for other people to use. The worst part? It can make you a victim on even the most secure websites.

You could be shopping or even filling out a job application, but as you enter personal information into an online form, a cybercriminal could actually be taking it in real-time. The scam is stealthy and hidden from plain sight, said Fortalice security expert Mike Holland. Hackers are getting into mainstream websites through third parties like customer service chatbots.

Read the full article from WCNC +

Cybersecurity

AI will now watch for fraudsters on the world’s largest stock exchange

As the world’s largest stock exchange by volume, Nasdaq must be constantly monitored for attempts to illicitly beat the system. These can include manipulations to inflate a stock’s closing price; churning to give the false impression of a lot of activity; and spoofing (placing a large buy or sell order with no intention of actually executing) to create artificially high demand.

That monitoring is now being aided by artificial intelligence. Nasdaq just announced that a new deep-learning system is working in tandem with human analysts to keep watch over roughly 17.5 million trades per day.

Unlike the existing software surveillance system that uses statistics and rules to flag any signs of manipulation, the new system has been trained to detect particular subsets of abuse by learning from historical examples. Every time it detects similar suspicious activity, it will alert a human analyst with the appropriate expertise. After investigating the case, the analyst enters the outcome back into the system.

In this way, the deep-learning algorithm continuously refines its understanding. Crucially, the system should be able to adapt more quickly to new patterns as fraudsters’ tactics change and become more sophisticated.

If the system is a success, the company plans to roll it out globally. Nasdaq also operates 29 total markets across North America and Europe and provides market surveillance technologies to 59 other marketplaces, 19 regulators, and over 160 banks and brokers.

Read the full article from MIT Technology Review +

SHORT

Airlines

LONG

CRISPR

LONG

Robotics & Automation

LONG

Solar

SHORT

Aviation

LONG

Electric Utilities

LONG

Silver

SHORT

U.S. Asset Managers

LONG

Vietnam

Week Ahead

This week important releases include:

• US inflation rate, industrial output and retail sales
• UK Q3 GDP data, trade balance, jobless rate, inflation and retail sales
• Eurozone industrial production and trade balance
• Germany Q3 GDP growth
• China industrial output, retail sales and fixed asset investment
• Japan Q3 GDP growth and machinery orders
• Australia consumer and business morale, and employment figures
• India inflation and industrial output

Central banks in New Zealand, the Philippines and Mexico will be deciding on monetary policy.

Click here to access the data +

China Inflation Rate Rises to Near 8-Year High

China’s annual inflation rose to 3.8% in October 2019 from 3% in the previous month and above market expectations of 3.3%. This was the highest inflation rate since January 2012, mainly due to persistently high pork prices following an outbreak of African swine fever. On a monthly basis, consumer prices increased by 0.9% in October, the same as in September, and higher than market estimates of 0.7%.

Click here to access the data +

Moody’s Changes UK’s Rating Outlook to Negative

Moody’s Investors Service revised the United Kingdom’s sovereign credit rating outlook to negative from stable and affirmed the debt grade at ‘Aa2’, citing as main factors behind the revision 1) UK institutions have weakened as they have struggled to cope with the magnitude of policy challenges that they currently face, including those that relate to fiscal policy, and 2) the UK’s economic and fiscal strength are likely to be weaker going forward and more susceptible to shocks than previously assumed.

Standard & Poor’s credit rating for the United Kingdom stands at AA with negative outlook. Fitch’s credit rating for the United Kingdom was last reported at AA with negative watch outlook. DBRS’s credit rating for the United Kingdom is AAA with stable outlook.

Click here to access the data +

Brazilian Real Drops on Supreme Court Ruling

The Brazilian real dropped against the USD on Friday, after the Supreme Court ruled to end the mandatory imprisonment of convicted criminals after they lose their first appeal on Thursday, a decision that may lead to the release of former President Lula da Silva. Lula da Silva was sentenced last year to 12 years in prison for the so-called “Car Wash” corruption case, a term which was reduced to nine years. On Friday, the country’s Justice Minister Moro said that the decision must be respected, in the first comments after the ruling. The real fell 1.3% to $4.15 around 02:20 PM Brasilia time.

Click here to access the data +

Moody’s Upgrades Iceland’s Rating to ‘A2’

Moody’s Investors Service upgraded on Friday 8 November 2019 Iceland’s sovereign credit rating to ‘A2’ from ‘A3’ and the outlook to stable from positive, citing as key drivers behind the revision 1) Iceland’s sizeable debt reduction gains will be sustained, positioning the country favourably relative to A2-rated peers; and 2) improvements in economic resilience reduces the country’s inherent vulnerability to shocks. Standard & Poor’s credit rating for Iceland stands at A with stable outlook. Fitch’s credit rating for Iceland was last reported at A with stable outlook.

Click here to access the data +

Commodities: Bitumen +7.98%, Steel -4.86%

Top commodity gainers are Bitumen (7.98%), Cocoa (2.62%) and Sugar (1.45%). Biggest losers are Steel (-4.86%), Palladium (-3.43%) and Lumber (-2.18%).

Click here to access the data +

Markets

Bonds

Yields Soar as Bets on Fed Cuts Slashed

Signs of progress in U.S.-China trade talks helped push the 10-year Treasury yield up to around 1.94%. The 30-year rate topped 2.44%, also a three-month high, as the government auctioned $19 billion of the maturity. At the short-end, traders now doubt that the Fed will ease again at any point in the next two years.

In Europe, rates on benchmark 10-year French and Belgian securities climbed back above 0% for the first time in months, while globally the stock of bonds with sub-zero yields has shrunk to around $12.5 trillion, from about $17 trillion in August.

The current mood is a stark contrast to a few months ago, when investors were willing to accept negative yields to insulate their portfolios from the economic harm of the trade war. With yield curves steepening of late, the market is signaling optimism that progress on the trade front and this year’s Fed rate cuts may have helped stave off a U.S. recession.

The cheerier economic outlook is a threat to the Treasury market’s top-performing trade. U.S. government debt due in a decade or more has returned about 16% this year through Nov. 6, on pace for its biggest annual gain since 2014. But the performance is now faltering, with the measure extending declines to a third straight month.

Read the full article from Bloomberg +

Politics & Policy

Tax Reform

OECD proposes global minimum corporate tax rate

Technology giants and other large multinationals could soon face a global minimum level of corporate taxation under new proposals from the OECD, even if they have successfully and legally shielded their profits in tax havens. The Paris-based international organization oversees global co-ordination of taxes.

The OECD last month proposed that governments should tear up a century of tax history by allowing countries to tax operations in their jurisdiction even if companies have no physical presence there. It is now consulting on this second set of proposals, on setting a global minimum corporate tax level.

Together the two proposals aim to eliminate the huge advantages some companies enjoy by shifting profits around the world to minimize their tax bills ― a strategy that has become particularly common among those involved in digital technologies. The proposals would also reduce the incentives for countries to lower their tax rates in an effort to attract such footloose businesses.

For example, the first proposal would give France the right to tax Google on part of its sales to French advertisers. The new proposals outlined on Friday would augment this rule by enabling the US to ensure that Google paid a minimum level of tax on its global profits ― if for example France chose not to exercise its rights or Google was still able to shield its profits in other low-tax jurisdictions such as Ireland.

The proposals would not only apply to tech giants such as Facebook, Apple, Amazon, Netflix and Google, but also other multinationals that make significant sums from intangible assets such as brands.

Read the full article from the Financial Times +

Construction & Real Estate

Housing

Young Homebuyers Are Vanishing From The U.S.

The median age of first-time home buyers has increased to 33, the oldest in records dating back to 1981. The median age of all buyers also hit a fresh record, 47, increasing for a third straight year ― and well above the median age of 31 in 1981.

As buyers’ ages have increased, so have their incomes. The typical income of purchasers rose to $93,200 in 2018 as a lack of affordable options squeezed lower-income potential buyers out of the market. Nearly a third of first-time home buyers said they used a gift from a relative or friend to fund their down payment.

Builders have cited a shortage of affordable lots and labor as reasons to build fewer or bigger single-family homes, leaving America’s growing population to consider more of the existing housing stock. New homes as a proportion of all purchases fell to a low of 13% in records dating back to 1981.

Read the full article from Investor’s Business Daily +