Fac­ing the im­pact of the Sony scan­dal

Financial Mirror (Cyprus) - - FRONT PAGE -

To say that the hack­ing of Sony En­ter­tain­ment was not the company’s finest hour would be an un­der­state­ment. Along with four un­re­leased films and the per­sonal data of 47,000 em­ploy­ees, the hack­ers ex­posed sev­eral gossip col­umns worth of in­for­ma­tion about ac­tor scan­dals and back-stab­bings. The on­line world is prov­ing to be a risky place. Can we ever trust Sony and other cor­po­ra­tions and gov­ern­ments again?

After the hack­ing on Novem­ber 24, the stock crashed, los­ing over 10% in just one week. What’s in­ter­est­ing though is that mar­ket trends dic­tate that the company will in all like­li­hood re­cover.

This may be the worst in­ci­dent that’s gone vi­ral in a while, but it’s not the first time sen­si­tive data has been leaked and it won’t be the last. Where cus­tomer de­mand for the prod­uct has been strong and com­pa­nies have promised to tighten up their se­cu­rity, they have typ­i­cally en­joyed a re­bound in the mar­kets. To Sony’s ad­van­tage is the fact that it stores rel­a­tively small amounts of con­sumer fi­nan­cial in­for­ma­tion, and the pic­tures di­vi­sion which fell vic­tim to the cy­ber-at­tack ac­counts for only 10% of the company’s over­all sales.

How­ever, the Sony scan­dal is the most re­cent in a line of at­tacks on banks and pub­lic cor­po­ra­tions that are start­ing to sow panic among the pub­lic. Cus­tomers may be able to for­give their favourite brands once, but our pa­tience won’t last for­ever. Eco­nomic strength re­quires trust. Gov­ern­ments, in­ter­na­tional con­glom­er­ates, and even small and medium sized business own­ers are re­al­is­ing that they have to step up their game.

It’s no co­in­ci­dence that within weeks of Wash­ing­ton blam­ing North Korea for the Sony at­tack, Pres­i­dent Obama will out­line his ini­tia­tives to pro­tect Amer­i­can busi­nesses from cy­ber-crimes. In his State of the Union ad­dress on Jan­uary 20, Obama is ex­pected to dis­cuss iden­tity theft, pri­vacy and cy­ber­se­cu­rity. On a much smaller scale, ad­mit­tedly, Banc De Bi­nary plans to host a con­fer­ence here in Li­mas­sol in a cou­ple of months on the same is­sue. We want to lead by ex­am­ple and raise aware­ness and stan­dards in the fi­nan­cial-tech sec­tor.

For in­vestors won­der­ing how to cap­i­talise on this trend, it’s a solid es­ti­ma­tion that many firms pro­vid­ing se­cu­rity soft­ware, hard­ware and ser­vices will be soar­ing high this year. Firms like FireEye, Cy­berArk,

Proof­point, and LifeLock were en­joy­ing gains in De­cem­ber and the trend is likely to con­tinue. For broad ac­cess to the mar­ket, you could have a look at the new ISE Cy­ber­se­cu­rity Ex­change Traded Fund which cur­rently holds 30 com­pa­nies in the in­dus­try.

As our world be­comes ever more con­nected, and our phones and apps and on­line ac­counts hold in­creas­ing amounts of data, in­ter­net se­cu­rity will prove vi­tal in or­der to en­able tech­no­log­i­cal ad­vances in the fu­ture. It’s a topic that has fi­nally won centrestage and isn’t leav­ing us any time soon.

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.