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Australia explores prohibiting ransom payments to cybercriminals – Industry roundup: 14 November

J.P. Morgan increases presence in Greece with new office and payments team 

J.P. Morgan plans to establish a new office in Athens, Greece, to aid in the expansion of its operations in the country. The bank aims to hire a local payments research and development team of approximately 50 people, including product and engineering specialists, to create a new Payments Innovation Lab. Employees from J.P. Morgan's corporate, investment banking and asset and wealth management businesses who are currently based in Athens are also expected to relocate to the new office.  

The new lab is expected to conduct research and development for the bank's global payments processing operations, as well as collaborate with Onyx, J.P.  Morgan's business unit that uses sophisticated technologies such as blockchain. The primary focus of the lab will be to assist in the advancement of distributed ledger technology, artificial intelligence and cryptography in relation to payment systems. The Payments Innovation Lab is expected to start hiring immediately, including a division head. 

RBI considers centralized databases over blockchain technology for CBDC 

The Reserve Bank of India stated that its preference is to operate a more centrally controlled and traditional database infrastructure for CBDC as opposed to DLT (distributed ledger technology), which is said to have various limitations. 

Reports indicate that while both traditional and DLT-based infrastructures store data multiple times and in different physical locations, the main distinction is how data is updated. Data in traditional databases is reportedly stored across multiple physical nodes that are controlled by a single authoritative central entity, providing adaptability. In DLT-based systems, in contrast, the ledger is reportedly managed collectively by various entities in a decentralized environment, requiring each update to synchronize across all entity nodes. This reportedly necessitates additional operating costs and lowers transaction volumes, according to the RBI's CBDC concept note last month.  

The central bank stated that “given the above, DLT at this point of time, is not considered suitable technology except in very small jurisdictions, given the probable low volume of data throughput.” Additionally, the RBI stated that DLT could be taken into account for indirect or hybrid CBDC configurations, as several levels of the CBDC technology platform may be located on centralized systems while the remaining levels will be on distributed networks.  

Both mechanisms reportedly pose cybersecurity risks, as public blockchains preserve visibility but do not offer additional safeguards. On the contrary, reports claim that while centralised systems are safer, they still share the same cyber security issues as the current fast payment systems. 

The RBI also stated that the CBDC must be built as a large-scale, enterprise-class digital platform that is highly scalable to facilitate high transaction volumes and rates. Additionally, in order to ensure the financial ecosystem's stability, the infrastructure must have secure access control protocols, cryptanalysis for data security, multiple platform support, integration with other IT platforms and a highly developed fraud management system. 

Research advancements on accelerating corporate digital transformation in 2023

MuleSoft's latest research found the following most significant trends and developments for digital transformation in 2023 and beyond, with emphasis on adaptability, efficient growth and sustainability. 

  • Companies plan to invest more in automation as they strive to do more with less. Businesses expect to expedite digitalization and drive efficient growth in order to better navigate the economic disruptions. 
  • Composability will reportedly become a key component of business strategies in order to promote innovation and adaptability, specifically under the rapidly evolving market pressures. Companies expect to promote composability by enabling their team members to reuse existing capabilities and reduce time to value. 
  • Non-technical users plan to accelerate transformation by using low-code and no-code tools, as well as automation. Proper tools will become critical to avoid IT inefficiencies in accelerating transformation. Using tools that enable them to drag and drop digital capabilities and data are expected to optimize processes and support the development of new products and services. 
  • Businesses expect to invest in total experience (TX) strategies in order to increase customer and employee loyalty and advocacy. The combination of customer (CX) and employee (EX) experience initiatives are reportedly critical to increasing revenue and retaining talent, resulting in robust business outcomes. 
  • To lessen the high costs of missed opportunities, organizations expect to automate data-driven decision intelligence, with efforts to create a composable strategy to reduce lost business opportunities caused by delayed decision-making from compartmentalized data. 
  • Cybersecurity protection measures are becoming more complex and integrated in order to protect against security risks. Investments in distributed architectures and edge technologies will reportedly increase, with complex evolving cybersecurity methodologies supported by universal API management. 
  • Sustainability initiatives are expected to increase. Data-driven insights and enhanced supply chain integration can reportedly support the worldwide initiative to reduce carbon emissions. Businesses aim to deliver value through more effective and sustainable working practices.

The London Stock Exchange Group and Mizuho form an alliance to promote environmental sustainability 

The London Stock Exchange Group (LSEG) and Mizuho Financial Group, Inc. (Mizuho), a Japan-based global financial institution, have partnered to provide corporate clients with sustainability solutions. The collaboration will reportedly enable Mizuho to enhance its customer offering by combining LSEG's expertise in innovative ESG and other sustainability solutions with Mizuho's extensive network and knowledge. Sustainability, including climate change, the environment, governance and human rights, has become a growing management concern for the bank’s clients.  

In accordance with Japan's "Guidelines for Respecting Human Rights in Responsible Supply Chains", which was released by the regime in September 2022, Mizuho aims to assist its clients in addressing governance and human rights issues by introducing services such as World-Check One and Due Diligence reports. The guideline would reportedly help customers identify and evaluate the risk of human rights violations in their business operations, as well as confirm whether or not their suppliers and other business partners have a history of having an adverse impact on human rights.  

The government of New Zealand launches open banking 

The New Zealand government has reportedly directed financial institutions to commence data exchange with competing firms as part of a new open banking framework. The government established a consumer data right framework (CDR) in July 2021 to oblige data owners to make sure customers in New Zealand have access to a broader variety of goods and services that effectively fulfil their requirements. Last week, the government announced that the banking sector will implement the CDR framework in the next two years. 

David Clark, Minister of Commerce and Consumer Affairs, stated that the implementation of open banking will enable customers to compare prices and find better deals, necessitating more effort on the part of banks to compete with new providers' services. 

Australia explores prohibiting ransom payments to cybercriminals 

In light of the recent cyber-attacks that reportedly affected millions of Australians, Clare O'Neil, Minister of Home Affairs of Australia, stated that the government may consider ransom payments made to cyber hackers illegal.  

As Australia continues to struggle with an increase in hacks, the country's largest health insurer, Medibank Private Ltd, became the target of a significant cyberattack in October 2022. Additionally, Optus, Australia's second largest telco, and at least eight other companies have been compromised since September.  

In efforts to outlaw ransom payments to cyber criminals, O'Neil further stated that the government expects to carry out this rule within the framework of their cyber strategy, a new cyber-policing model involving the Australian Federal Police (AFP) and the Australian Signals Directorate, which monitors electronic communications from other nations. The model aims to implement more stringent enforcement of cybercrime.  

The new collaboration between the two federal agencies would include approximately 100 officers, expected to function as a joint ongoing operation against cybercriminals on a daily basis. The AFP reported earlier this week that Russia-based hackers were fully accountable for the Medibank attack, which reportedly compromised data from approximately 10 million current and past clients. 

In the interim, Anthony Albanese, the Prime Minister of Australian, stated that the government has established a communication line for affected customers to seek assistance from both the government and Medibank. 

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