The rise of active

cyber defense

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ABOUT THE ANALYST

William Altman

Intelligence Analyst, CB Insights

@AltmanW | waltman@cbinsights.com

William is part of the intelligence unit at CB Insights, where he produces data-

driven research on emerging technology with a focus on cybersecurity and
identity technologies.

William's published industry research has been featured in The Wall Street
Journal, Bloomberg, and The New York Times. Before CB Insights, William
worked in the Middle East and North Africa where he conducted research on
entrepreneurship in the Wamda Research Lab.

William has a degree from Denison University, and a Master's Degree from the
Middlebury Institute of International Studies at Monterrey.
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Contents
9 Passive vs. active vs. offensive cybersecurity

13 The rise of active cyber defense in financial services

25 The future of active defense in financial services

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We are witnessing the early-signs of a
paradigm shift in enterprise cybersecurity

Passive Active Offensive

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Passive cyber defense strategies are critical but
do not involve direct action to counter threats

Passive Active Offensive

Examples:
- Encryption
- Application whitelisting
- Identity & access management
- UEBA systems
- Cyber education and training

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Active cyber defense does not violate U.S. law
but still takes direct action to counter threats

Passive Active Offensive

Examples:
- Attack attribution
- Disruption of ongoing attacks
- Monitoring threat intelligence

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Offensive cybersecurity tactics involve going
outside of your network to counter threats

Passive Active Offensive

Examples:
- Stealing-back data
- Reverse DDoS
- “Good guy” malware (Stuxnet)

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FINTECH IS UNDER ATTACK

Financial firms saw the highest volume of

cybersecurity incidents in 2017
27%
18%
13%
9%
1%

Financial services ICT Manufacturing Retail Professional services

Source: IBM X-Force Threat Intelligence Index 2018 13
THE WIDENING THREAT LANDSCAPE

Cyber attacks on financial firms are

increasingly sophisticated and diverse

Website attacks (DDoS) Fake $$ transfers ATM hacks Crypto theft

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 THIS IS WAR

“Our traditional defenses are no longer adequate to

protect ourselves as shared industry systems, companies
or individuals. This is war, and needs wartime, not
peacetime, urgency.”

John McFarlane
Chairman, Barclays

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FROM HUNTED TO HUNTER

Organizations are shifting from passive cyber

defense, to active cyber defense

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Financial firms are looking to military and
intelligence agencies for active cyber defense

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Some firms are launching ‘cyber war rooms’ to
coordinate threat intelligence and response

Image credit: Dr. Strangelove 18

Investment banks are mirroring military
‘war games’ to train for cyber attacks

Goldman Sachs enlists staff for

cyber security war games
- June 6, 2018

“The Wall Street giant, which famously describes itself as a ‘technology company’, is
offering its 8,000-strong technology workforce access to the platform, where they can
test their skills against colleagues and compete on a company-wide league table.”

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Financial firms are embracing white-hat
hackers to battle test cybersecurity systems

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Banks are tracking stolen financial data on
dark web markets to catch identity thieves
SURFACE WEB

DEEP WEB

~40% of the dark web is

DARK WEB financial fraud & leaked data…
Source: Intelliagg 21
 SYNTHETIC IDENTITIES

“Accounts being taken over is becoming a less

challenging threat than fraudulent accounts and
synthetic identity frauds, where stolen data is
attached to fabricated accounts and identities.”

Brian Krebs
Journalist and investigative reporter

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Financial firms are investing in AI armies that
uncover criminal behavior and hunt fraudsters

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Banks are investing in deception-based security
tools that trap hackers

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WHAT’S NEXT?

Game changing fintech-security

and cyber-regulations

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Consumers will
become active
defenders

#AhaCBI
Firms that champion proactive security will
put active defense in the hands of consumers

Polymorphic credit cards Self-destructing credit cards

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Active defense
could become
‘hacking-back’

#AhaCBI
Proposals to legalize ‘hacking-back’ allow
financial firms to retaliate against bad actors

(Introduced 10/12/2017)

“It is a defense to a prosecution under this section that the conduct

constituting the offense was an active cyber defense measure.”

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However, ‘hacking-back’ could open the
floodgates for endless tit-for-tat cyber attacks

GIF credit: Attassa Cabrera 30

Organizations
will need
quantum
strategies to
stay cyber-
secure

#AhaCBI
 THE QUANTUM GAME CHANGER

Quantum computers are ultra-fast and use

principles of quantum mechanics

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THE QUANTUM GAME CHANGER

Some of the world’s biggest companies know

the future is quantum

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THE QUANTUM GAME CHANGER

Investment banks are already getting into the

quantum game to ‘perform fast computations’

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THE QUANTUM GAME CHANGER

Quantum computers threaten all modern forms

of protecting sensitive data

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THE QUANTUM GAME CHANGER

However, quantum computing is also the key

to actively defending the future of fintech

Connecting to web services Authenticating payments Authenticating wire transfers Title transfers Identity management

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Questions?
Twitter: @AltmanW
Waltman@cbinsights.com

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cbinsights.com
@cbinsights

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