How safe is our personal information on the web really?

24

October

2016

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A lot of us rarely think twice about making online transactions these days. It has certainly become a part of our daily lives as we exchange information over the web. By transactions, I refer to both financial transactions, in terms of online shopping or using food delivery service, as well as non-financial transactions, where we simply provide personal information in exchange of information that we seek from the website. With its ability to make life easier and better, we have become extremely reliant on IT for a number of reasons. Due to the advancement in online security and encryption systems, most people have stopped paying attention to the consequences of a (deliberate) failure in this system.

Information sensitive platforms such as Google, Facebook or major banks use highly sophisticated data encryption infrastructure that promises to protect our data from getting into the wrong hands and even government (Google, 2016). By promising to use our personal data to improve their services and offer more personalized services, these companies encourage us to share more data that makes us vulnerable.

The number of cybercrime cases are on an all-time high. Billions of dollars are lost each year throughout the world due to such cyberattacks ($525 million in US itself), and this doesn’t even consider the non-financial consequences (loss of identity, depression, suicides, bullying, etc.) (Statistica. 2011). The risk of fraud and identify theft only becomes larger as the network grows, the increase of fingerprint protection systems on mobile devices potentially provides access to people’s fingerprints all over the world. Considering that fingerprints are one of the most unique feature that can be used to identify humans, the risk of fraud only increases further.

In February 2016, a hacker group tried to steal almost a billion dollars from Bangladesh’s central bank account held at New York’s Federal Reserve and eventually managed to get away with $81 million using a loophole in the SWIFT code system (Al Jazeera. 2016). The cyber-attack at Sony Entertainment in 2014 further provides proof to the intensity of the problem as it cost the studio as much as $100 million in financial costs itself (Richwine, L. 2014). On a smaller scale, consider how using VPN and cloud services, we can access our data from any part of the world and how risky it could be if it was someone else.

Consider the string of emails related to Hilary Clinton retrieved and published by WikiLeaks recently. Thinking about the kind of classified and secretive information these emails seem to have contained and their importance to the current elections, it is fair to say that these emails must have been deleted using the best and most sophisticated systems in the world. If an outsider, such as WikiLeaks, could still manage to obtain and publish information that was deleted using the highest standards, it should really be considered as a topic to think about. It is often talked about that big companies try to shut down and absorb smaller companies/ inventions that might potentially challenge their place in the industry in the future and it’s obvious that they are making use of the data.

To sum it up, it is important to consider the consequences and know the right trade-off. The fact that people are willing to be vulnerable and take the risk gives us an estimate of our dependence and the impact of IT in our lives. It seems like an extremely important challenge of the 21st century that bounds to have extremely consequences and it is likely that a lot of companies will be increasing their investments and offerings in this area. Until then, the only way to keep ourselves safe is to not become overly reliant on big companies and watch our own back.

 

If you’re interested to know more about how to keep our personal data more safe, feel free to check out the following articles:

 

References:

Al Jazeera. 2016, ‘How safe is your personal information on the internet?’, Al Jazeera Inside Story, 28 April, viewed 22 October 2016, http://www.aljazeera.com/programmes/insidestory/2016/04/safe-personal-information-internet-160428170937283.html

Google. 2016, ‘You have the controls to manage your own privacy.’, Google Take Control, viewed 22 October 2016, https://privacy.google.com/take-control.html

Richwine, L. 2014,’ Cyber attack could cost Sony studio as much as $100 million’, Reuters, 9 December, viewed 22 October 2016, http://www.reuters.com/article/us-sony-cybersecurity-costs-idUSKBN0JN2L020141209

Statistica. 2016, ‘Statistics and Market Data on Cyber Crime’, Statistica, viewed 22 October 2016, https://www.statista.com/markets/424/topic/1065/cyber-crime/

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Industry Disruptions in Currency Exchange Business

3

October

2016

5/5 (3)

I am sure everyone has once in a while criticized institutions and banks for exploiting their customers by overcharging customers during currency exchanges. Banks typically set their own exchange rates much above the real exchange rate and have several hidden costs that are not so apparent at the offset. A typical currency exchange through major banks could cost as much as 13% for a round trip exchange.

Enters TransferWise

TransferWise is a British peer to peer money transfer service established in 2011. It takes sharing economy concept to a different level as it allows the sharing/ exchange of multiple currencies directly between users of different countries, eliminating the need of banks. A person wishing to exchange Euros for Pounds can use TransferWise, which will find another person looking to convert his Pounds for Euros. Since the money never really leaves the country and is paid out from the local euro or pound account, users can avoid the costs associated with money transfers and banking fees. For example: Transferring from Pounds (£) to Euros (€), a typical £1000 transfer would result in the recipient receiving €1139.70 as compared to €1099.17 received while using one of the major banks. TransferWise charges customers 0.5% per transaction which is substantially lower than the transaction costs charged by major banks worldwide and takes lesser time as well for transactions.

TransferWise is a typical example of an industry disruption technology that challenges the power of long established institutions and forces them to change in order to compete. Since the transfer through TransferWise does not really initiate a transfer between countries and simply uses algorithms and technology to redirect money transfers locally, users are able to make use of this crowdsourced currency exchange and avoid currency values lost during conversion and transfer across borders. The company has seen huge growth recently and is currently moving over £500 million every month globally and covering 59 countries and 504 currency routes.

The TransferWise system can be compared to the traditional ‘hawala’ money transfer system that is still the primary source of money transfers abroad in Middle East, Africa and the Indian subcontinent. Under this system, ‘hawala brokers’ have an established network worldwide based on reputation and performance, and these brokers handle transfers without the actual transfer of money. For example: Consider a resident sitting in New Delhi wants to transfer a sum of ₹500,000 to his son studying in Rotterdam for his education, the hawala broker in New Delhi would simply call his contact in Rotterdam who will provide the Euro (€) conversion of ₹500,000 to the student. Note that no actual currency transfer is involved and the Rotterdam broker will simply get reimbursed in another transaction that goes the other way. However, there is very limited or no use of technology involved in this hawala process and has been working efficiently in these countries informally through an honor system for decades.

TransferWise has successfully replicated the same strategy and made use of Information Technology to its maximum potential. Just like Airbnb has turned every homeowner into a hotelier, TransferWise has been successful in turning every person into a broker (without them even thinking of themselves as broker). This particular example shows the power of disruptive technology to make use of existing methods and challenge the established methods with effective use of technology.

 

Future-of-Money-Transfer

References and interesting articles to look at for further insight:

http://www.telegraph.co.uk/money/transferwise/how-does-it-work-and-is-it-safe/

http://www.forbes.com/sites/amyfeldman/2015/10/04/disrupting-fx-exchange-talking-with-transferwise-as-it-hits-1-billion-in-u-s-transactions/#5bd6bdb83d5f

http://www.n2moneymatters.com/2011/03/what-is-hawala-all-you-want-to-know.html

https://transferwise.com

TransferWise: Rebel, What is Your Cause?

Crazy High Currency Exchange Fees: How to Stop the Banks from Taking Advantage of You

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