For the four founders of Alyne, predicting the future is merely another way of preparing for it – be it a zombie apocalypse, or the rise of Machine Learning. In the vast and ever-evolving landscape of data hacks, intelligent cyber attacks and bubbling-under-the-surface security threats, preparation will forever be your greatest asset. Here are trends and expert opinions from our founders that might also form part of your protection strategy in 2019.
IoT Advancements & Cloud Computing
Matthias Danner, CFO
The Internet of Things (IoT) enables cyber attacks to penetrate into the everyday physical world.
It is not sufficient to secure IoT devices since new business models based on centralised services across fleets of devices demand robust security for the services on top of the devices. In addition to rethinking their business models, traditional engineering companies will have to up their cyber security and information security management game if they want to play a role in this new world.
Ubiquitous usage of cloud computing frees resources – people, money, focus – or requires less resources in the first place. Some call it democratisation of computing, which creates a level playing field with IT capabilities and IT operations excellence no longer being differentiators. New market entry is cheaper and companies are enabled to fully focus on their core business. Survival in such a competitive landscape requires, among other things, building and defending a moat – think sustainable competitive advantage, monopoly –, reacting ever quicker to changing market conditions, looking ahead at what’s coming, and managing risks to the business on every level.
RegTech & Machine Learning
Karl Viertel, CEO
2019 will see a thinning of the herd in the RegTech market. Early players that are well funded and have developed a mature product will gain a sizeable share of the market with some large scale implementations. RegTechs that were Seed funded with VC focus on RegTech in 2017 and 2018 and were not able to establish product market fit will fail to raise follow-on funding in Series A or B and will run out of cash. Some of the emerging larger players will also become M&A targets from professional services firms or PE plays.
Machine Learning will change the way risk and compliance teams work in 2019 and 2020.
The capabilities will mature to a useful state and value will have been proven in initial engagements with RegTechs. This will industrialise certain tasks forever. At the same time, organisations will need to clearly identify the limitations of Machine Learning and redefine processes to hand over processing from Machine Learning to human expertise. Machine Learning will not be the silver bullet that “automatically makes me compliant”.
Blockchain Consolidation & Mass Data
Manuel Reil, CTO
2019 and beyond will bring an aggressive consolidation in blockchain services, products and technology.
In cases where blockchain technology is offered as a solution in search of a problem, it will just cease to exist. Blockchain solutions with a clear business value proposition and unmatched characteristics compared to traditional approaches will be successful. Less money will be pumped into experimental projects. Pragmatic blockchain technology like IOTA will gain, traditional bulky blockchain technologies with low number of transactions per second will be less attractive. IoT and pragmatic blockchain technology will benefit from each other regarding adoption rate and maturity.
Without the need to worry about data storage capacity, data will be stored more and more on a “maybe we can use it somewhen later” basis than on an actual “need to know” basis. While adding data privacy challenges, this enables answering the business questions of tomorrow without foreseeing them today. Given this availability of mass data, “Machine Learning First” will find its way even to very traditional businesses. Already today, this mantra is in the genes of every computer science student. Machine Learning models built on this precious data will be traded between businesses. Multiple Machine Learning models and data pools will be combined across companies and will augment existing solutions for new insights, scenario-based and predictive analytics. RegTech solutions will adapt this approach to predict the risk and compliance posture better for their customers.
GDPR Enforcement & Cloud Services
Stefan Sulistyo, CCO
Regulators across the world will embrace cloud service providers and create guidance on how to outsource core services to them. In the year ahead, there will be a big uptake in IoT based-security incidents.
We can also expect the first significant GDPR enforcement actions across EU states and the UK, with GDPR-like legislation copied and implemented into other regions.
In 2019, the value of Artificial Intelligence and Machine Learning will still not be fully there, yet. In the cyber security and compliance fields, however, we will see it increasingly being used by bad actors, such as using Machine Learning to optimise phishing attacks.
Analysing trends over the past year provides necessary clues into what can be anticipated to form part of the RegTech and cyber security landscape in 2019. In an industry characterised by rapidly evolving advancements, predicting and planning for the year ahead becomes an essential part of survival. So ask yourself, how protected is your business?