The Importance of Cybersecurity for Currency

As we rolled into a new decade, people across the world were given a stark reminder of the importance of cybersecurity. Travelex, one of if not the largest foreign currency exchange companies were the victim of a cyber attack with hackers demanding £4.6million ($6million), while also threatening to release customers’ data such as card details and dates of birth. Fortunately, upon discovering the attack on New Year’s Eve, Travelex was able to contain the damage by shutting down their systems and no customer data was disclosed.

The attack from the hackers highlights the need for improved cybersecurity in an age where technology is beginning to rule society. The need for human intervention and action is slowly diminishing and companies around the globe are beginning to move their systems onto online platforms. But while this might cut costs and streamline operations, the risk companies are putting themselves at, especially if appropriate security measures aren’t in place, is ever increasing. Another problem, however, is not that Travelex, a company dealing with currency, was targeted, but the knock-on effect it had provided a huge headache for the banking sector in the United Kingdom especially. Banks such as Lloyds, Barclays, and HSBC were also required to take protective measures against the attack on Travelex which also put a halt to basic operational activities like processing transactions, at a time and day when people would lean on their banks most.

Although unsuccessful, this cyberattack provided a big wake-up call for companies and especially smaller companies who don’t have the turnover and resources that large conglomerates have at their disposal. But there are still simple precautions that can be implemented to keep a company safe. This brings humans back into the equation. The need for someone, non-technological, to oversee IT security is an expense worth having. This somebody can monitor the software itself, especially to check that it is current and the latest version. With technology moving so quickly, software updates are required on a more regular basis which is vital to keep track of, as having an older version of the software for even a minute could leave a company exposed to outside eyes. In the current climate, technology is a double-edged sword with regards to security. Unfortunately, the more you trust it, the more you could be made available to the world. The days of pen and paper are slowly disappearing into a digital mesh and the same can be said of currency.

We saw the above-mentioned example of Travelex being attacked by hackers, but another phenomenon very much aligned with currency is cryptocurrency and bitcoins. It is worth having the discussion about bitcoins as they could well be the future currency and with this mysterious, invisible new digital currency, we will also likely see new innovative security measures to protect cryptocurrency. In many cities around the world, we are already witnessing a shift in the use of paper banknotes and metal coins to plastic debit and credit cards so who’s to say that the next step won’t be a digital currency. Bitcoin, created in 2009 is a digital currency with no central bank or administrative entity, and as such, Forex brokers and those who offer trading of Bitcoin need to be extremely mindful of their security protocols. Bitcoins and other variants of cryptocurrency or altcoins, like NEO and Litecoin are housed in what is known as a digital wallet and there are no physical traces of bitcoin. The first question people should be asking is “Are bitcoins secure?”. The simple answer to that is like anything, “No, not completely.” It’s probably best to get the bad news out the way first. Although the system is encrypted, bitcoins and digital wallets can be a hacker’s dream if the individual’s private key can be obtained. Once stolen, funds can be transferred from one account to another immediately. One could assume that the two-step verification process is a secure one but if a hacker is cunning enough to steal your private key, imagine what he or she could do to obtain access to an individual’s phone or emails. And once accessed and as soon as funds are transferred, there is then no safety net, unlike with credit cards, where one can identify, notify and recover a fraudulent transaction straight away.

But there are positives to the currency and reasons why so many more people are getting involved in the digital buying game. Although accounts can be hacked, and private keys can be stolen, and even though there is no safety net, the path of the currency transfer can be tracked and is public to all. In a strange way, you can keep track of your stolen money; and even if stolen, it is difficult to have that currency converted into something more tangible. Plus, all accounts and personal details (apart from the public address) are anonymous and cryptographically secure which makes it even more difficult for hackers to get hold of your currency.

Regardless of whether you think cryptocurrency is secure or not, the introduction of digital money marks a significant step in cyber activity and with every advancement, there is a greater unknown factor. We saw only a couple of weeks ago with Travelex that hackers are still at large and with the increasing popularity of cryptocurrency, we will surely need to see a step up in cybersecurity to counter the forces that roam the world wide web.