Author: Dr. Philip Cao

The innovations in today’s digital world continue to advance at a tremendous pace, and 2016 didn’t fail to have its own impact on society. As a hobbyist in remote flight, the introduction of drones to deliver blood and medicines in Rwanda from a Silicon Valley startup was an amazing example of how the Internet of Things can have a hugely positive impact on society. I can’t wait for the completion of the $10 million Tricorder XPRIZE to be announced in early 2017, when fiction is expected to become fact, as a portable wireless device that is anticipated to be able to monitor and diagnose health conditions.

What can we expect in 2017 from a cybersecurity perspective? Personally, I believe 2017 and early 2018 will be the most exciting years in terms of evolving our cybersecurity capabilities as businesses prepare for the May 2018 deadlines imposed by upcoming EU legislation changes. This is a rare opportunity to step back and take stock of our capabilities and validate if they are still fit for their purpose, both for the approaching deadline and thereafter. This is a welcome driver to look to the future as security professionals are often so caught up in enabling the ongoing technology innovations and managing evolving cyber risks.

So here are my predictions for the next 12 months:

1. 2017 is the year businesses need to get prepared for the May 2018 deadline for upcoming EU legislation in the form of the GDPR and NIS Directive.

• This will mean that businesses finally have to gain control of the mountains of data they have gathered and generated, as well as to understand both the value and risks they create for the business.
• We can expect some early examples to be made, as the EU looks to ensure that businesses take their digital societal responsibilities
• Cybersecurity leaders will need to validate that their cybersecurity capabilities are relevant to the risk they face and that they leverage current best practices, referred to as “state of the art,” with clearly documented processes and measures. Too often security experts continue to hold on to legacy practices, perceiving that continuing to do the same things as before is enough; as such, 2017 will be the year for change.

2. Businesses will be vulnerable as they are immobilized by the confusion of what a good next-generation endpoint strategy looks like.

• With the growing volume of unique attacks, organizations have, for a long time, been looking for new solutions to either complement or replace signature-based approaches. However, with many different, new approaches to choose from, businesses are hesitating for too long while they look for validation to define their future next-generation endpoint strategies. With the growth of ransomware, one instance has become one too many, and now is the time when next-generation capabilities are needed.

3. We will see the cybersecurity landscape continue to change.

• Ransomware will continue to have business impact. Expect ransomware to target a broader range of platforms and further leverage historical cyberattack techniques, such as APT-style attacks, as those behind them look to increase their profits. While this threat remains lucrative, it will continue to be a focus for attackers, which could distract them from developing threats leveraging other areas of technology.

• DDoS will refocus on the retail space as retailers become increasingly dependent on online revenue streams.

• Targeted credential theft will allow attackers to move the attack out of the business network. As more businesses in Europe embrace cloud, credential theft – whether through social engineering or attack – will mean that adversaries have to spend little or no time in the business’s network to achieve many of their cyberattack goals.

4. While senior cybersecurity skills are in reasonable shape, practitioners are in demand, and outsourcing capabilities are not scaled for evolving demands (volume of work, hybrid cloud/on-premise services, incident response, next-generation SOC requirements, training and running AI/big data systems).

• With the continuing growth of information to draw on in order to prevent and protect against cyberthreats, we can only expect more security events that need to be managed. The scale of security experts has not and will not keep pace; therefore, businesses must rethink how and where human skills should be leveraged in cybersecurity. Today there are too many siloed human-dependent cybersecurity processes that, with evolving best practices, can and should be consolidated and automated. In a market with limited skills, usability and automation should be treated as equally important as capability.

5. Most companies will confirm whether cyber insurance will become a part of their investment strategy and realize that insurers are a valuable point for CISOs wishing to translate and validate risk to senior executives to help better understand their business’s cyber risks.

6. Cross-domain incidents will stop organizations siloing IoT/OT, and business/home systems, and help them start to realize it is actually one, big cyber mesh.

• It’s likely that essential services will suffer more outages, following the early examples in Ukraine, the recent Mirai bot DDoS attack, and others.
• In recent years, we have seen more attacks on automotive systems, so attackers inevitably will start to look at moving laterally into other autonomous systems, as they grow in popularity. These may vary from driverless city centers to the Amazon button to the increasing use of drones for commercial businesses.

It will be interesting to see how many of these predictions come true over the next 12 months. If experience has taught me anything, some will have been realized in half that time, while others may take a little longer – and, as always, I’m sure we’ll be thrown a few curveballs. The only near guarantee I can give is that the digital world will continue to have an amazing and positive impact on our lives, and I’m proud to be part of the global cybersecurity community that supports its enablement.

What are your cybersecurity predictions for 2017? Share your thoughts in the comments.

Greg Day

[Palo Alto Networks Research Center]

This post is part of an ongoing blog series examining “Sure Things” (predictions that are almost guaranteed to happen) and “Long Shots” (predictions that are less likely to happen) in cybersecurity in 2017.  

This year saw some notable cybersecurity events in the financial services industry, including thefts from a number of SWIFT (Society for Worldwide Interbank Financial Telecommunication) member banks and from malware-infected ATMs in Asia. As we look ahead to 2017, I predict that we’ll see the following cybersecurity trends in the financial services industry.

Sure Things

• Growing Adoption of Public Cloud – The financial services industry is the final frontier for public cloud computing. After years of saying it will never happen due to information security concerns, the industry has slowly warmed up to the use of the public cloud. Both Amazon Web Services (AWS) and Microsoft Azure already publicize a number of financial institutions as customers. Many organizations have been testing, evaluating, and conducting proofs-of-concept in 2016 with a critical eye on appropriate cybersecurity practices. A significant number of these institutions will finally adopt the public cloud for computing workloads in 2017. Initially, these may include applications that handle less sensitive data. Although there are still pockets of resistance out there in the financial services industry, they are definitely getting smaller. The appeal of agility, scalability, and cost-benefits offered by public cloud computing is irresistible, especially when security can be architected into the solution instead of bolted on.

• Common Use of Multi-Factor Authentication (MFA) – As we saw with the recent fraudulent transactions at several SWIFT member banks, legitimate login and password credentials were somehow stolen and used to initiate fund transfers. This basic authentication technique is prone to compromise and allows account takeover (ATO) attacks. Financial institutions will finally take note and adopt more robust MFA techniques – at least internally for critical applications and sensitive data, and certainly for privileged accounts, such as root, administrator. Although not all MFA techniques are created equally, any form will create another hurdle that the cyber adversary cannot easily clear. MFA techniques are based on presenting evidence – at least two of the following:
  • Something you know (e.g., login/password, PIN)
  • Something you possess (e.g., one-time password token, mobile phone)
  • Something you are (e.g., fingerprint, retina scan)

Long Shots

• Broad Implementation of Zero Trust Networks – Forrester Research first introduced the Zero Trust (ZT) model in 2009, but as of the end of 2016, implementations are still not widely seen. Conceptually, the information security value of restricting traffic to only known, legitimate flows between various portions of the network is difficult to refute. Any malicious activity will then be constrained by the nearest segmentation gateway.  However, the challenges with the ZT model include: difficulty in completely identifying the legitimate traffic patterns (both initially and in perpetuity); necessary cooperation across multiple disciplines (e.g., IT, security, business); and the potential for business disruptions, especially in brownfield environments. In spite of this, financial institutions will warm up to the idea of ZT for their networks and take some big strides in 2017. This will start off with pockets of network segmentation that limit traffic to/from more sensitive portions of each environment. These efforts will limit the exposure and restrict lateral movement after a compromise. In the end, it will be a question of how far down the ZT path a financial institution will go within its own network.

• Blockchain Opens Another Attack Vector – There continues to be significant buzz regarding blockchain technology within the financial sector. Blockchain is certainly bigger than Bitcoin and is a distributed ledger technology that is being considered for payment processing, trade settlement, virtual wallets, etc. In addition to start-ups, traditional financial institutions are actively working to understand this technology and the potential impact on their organizations. Some of the benefits include greater expediency as well as reduced costs for cross-border payments, securities trading, and settlement as a result of cutting out the intermediaries. Other benefits include greater transparency and audit trails for compliance officers, auditors and regulators. Even with the best of intentions in mind, early financial industry adopters of this technology will create another attack vector, despite the inherent mechanisms for cryptography and immutability. Vulnerabilities in nascent implementations of blockchain technology will be discovered by malicious actors who will exploit them in an effort to compromise the security and confidentiality of financial transactions in 2017. This provides a segue to the next prediction.

• Better Results from Coopetition – FinTech start-ups continue to challenge financial institutions for a share of their customers’ wallets. FinTech brings lower costs and innovative approaches to a segment of the banking and investing population. However, they often lack brand recognition, access to a large customer base, and experience with regulatory matters. On the other hand, traditional financial institutions clearly have those qualities, but often lack the agility and capacity for innovation. Traditional financial institutions are trying to embrace cloud computing to remove some of the drag, and some have even launched their own (autonomous) FinTech units. Others have embarked on collaborative efforts with FinTech companies as a means to marry the core competencies of both sub-sectors. This approach may very well be the best path to innovative solutions in 2017, which are industrial-grade in terms of scalability, enterprise architecture, cybersecurity, etc. Ultimately, this will provide lower cost financial products or services and improved customer experiences, but with safety, soundness, and regulatory compliance fully baked in.

What are your cybersecurity predictions for the financial services industry? Share your thoughts in the comments and be sure to stay tuned for the next post in this series where we’ll share predictions for EMEA.

Lawrence Chin

[Palo Alto Networks Research Center]