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Saturday, October 1, 2022

THE FIGHT AGAINST CYBERCRIME IN FINANCIAL SERVICES

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As losses to scammers mount, users and service providers such as banks need to drastically raise security levels.  

There is a need for heightened awareness and education about scams among the public

ONLINE banking fraud is a hot topic of the day. Not only are the case numbers rising, the amount of money being scammed is reaching eye popping levels.

Many Malaysians with online banking facilities are increasingly worried about cybercrime.

In the first seven months of 2022, Malaysians have lost about Rm415mil to scammers. 

The problem had become so bad that Bank Negara stepped in this week to issue a strict directive to all Malaysian banks to migrate away from the use of Sms-based authentication in online banking services.

The police are getting more vocal about the problem, providing updates on arrests being made and constantly dishing out advice to the public on ways to avoid getting scammed.

The banks, in the past few days, have also issued statements, talking about how they are raising their defences against cybercrime.

But, what went wrong in the first place for the situation to reach this level?

And, will the new steps that banks are taking help stem the problem?

Datuk Khairussaleh Ramli, the group president and chief executive officer of Malaysia’s biggest bank, Malayan Banking Bhd (Maybank) tells Starbizweek this: “With the rise in ecommerce activity spurred by the Covid-19 pandemic, and as more consumers prefer to transact online, fraudsters are taking the opportunity to find new ways to scam unsuspecting users.

“The increasing risk of cyber attacks and the potential impact on banks and their customers is a top concern. This has been elevated with the rise in more sophisticated scams such as ‘smishing’ (phishing via SMS) and malicious software (malware) scams impersonating banks recently.”

Ho Siew Kei, cyber risk leader of Deloitte Malaysia, reckons that 70% of commercial crime cases now can be categorised as cybercrime cases.

It appears that the problem lies with the usage of SMS in online banking transactions.

Many Malaysian banks have been using SMS one-time passwords or dubbed OTPS for online financial services.

Users need to key-in authentication OTP codes, obtained through SMS, to a browser or a mobile application to carry out their online banking transactions.

However, fraudsters have been able to get control of these codes from the devices of some customers.

It all starts when a user unknowingly downloads malicious applications or clicks on links that eventually leads to the installation of malware.

Such users are enticed to follow such links sometimes due to a promise of receiving a reward or other benefits.

Fraudsters, through the malware, will then be able to intercept sensitive information, including banking credentials and credit card numbers.

It also allows fraudsters to intercept messages being sent to the device such as the OTPS received for online transactions.

Upon obtaining the OTPS, fraudsters may also delete the SMS from the device, which often leaves victims believing they did not receive any SMS.

With this method, fraudsters are able to get control over users’ bank accounts. This can lead to financial scams that often occur without the knowledge of the victims

Sea: The better technology is widely available ranging from the use of QR codes to the use of external dongles

According to Sea Chong Seak, chief technology officer of cyber security firm Securemetric Bhd, the problem seems to lie not so much with attacks against banks’ systems or networks but rather due to the weaknesses that exist in the security of end users’ devices.

Users that download suspicious apps or go into questionable links through their mobile devices create an entry point for the fraudsters, owing to the low security control, he says.

“This is why banks need to move away from the usage of SMS OTPS in the authentication processes. The better technology is widely available ranging from the use of QR codes to the use of external dongles,” says Sea.

Sea cites the case of Citibank Malaysia that uses QR codes and biometrics in it authentication processes as an example.

Meanwhile, Maybank points out that it has introduced the usage of Secure2u since April 2017 for an alternative secure authentication method.

“It is a safer and more convenient way for Maybank customers to authorise transactions relating to account opening, fund transfers and payments on its online banking services mobile applications, using onetap approval and a six-digit transaction authorisation code (TAC) number generated on its applications,” says Khairussaleh.

For better protection against cybercrimes, Khairussaleh says: “Currently, we only allow one Secure2u device per account holder to prevent fraudsters completing financial transactions without authorisation from the registered device.”

However, it should be noted that while more secure authentication technologies have been available to banks, the usage of SMS OTP has been largely used because of the ease of use for customers. This also helped banks migrate its customers into online banking. The usage of dongles or other technologies would have also meant higher costs to the banks.

Ho Siew Kei, cyber risk leader at Deloitte Malaysia, says that while Bank Negara’s decision to nudge financial institutions towards more sophisticated authentication methods is a step in the right direction, there will be challenges due to the widespread use of more traditional devices at this point in time.

“However, as older devices are replaced by devices that are affordable yet are more advanced and able to support the latest technology, we should see adoption of the advanced security features become commonplace,” he says.

In replies to questions from Starbizweek with regard to the usage of SMS OTP in online financial transactions, Mohd Rashid Mohamad, group managing director and CEO of RHB Bank Bhd, says: “It takes into account the needs of various segments of customer demographics, including those who do not own smartphones or do not have access to data and Internet connections.”

Rashid says RHB Bank views fraudulent activities and financial scams very seriously, and is consistently enhancing its security measures.

However, he believes there is a need for heightened awareness and education about scams and frauds among customers.

“It is equally important that customers are kept informed on the latest scam and fraud trends so that they are aware of potential threats and therefore able to avoid becoming victims,” he says.

RHB Bank uses Secure Plus for its customers’ transaction authorisation process, which uses QR codes and biometrics for authentication.

Rashid notes that RHB Bank plans to fully migrate all transactions into Secure Plus by next year.

Technology firm Marco Kiosk Bhd, which provides Sms-based OTP services to banks, shares a different view. CEO Datuk Kenny Goh, says: “Cyber criminals target individual consumers or financial institutions irrespective of the authentication method or the underlying technology deployed.”

Despite welcoming the central bank’s decision to get financial institutions to move out of the SMS OTPS, Goh says: “There is nothing insecure about using SMS OTPS as experience has shown that often the gaps were in either compromised devices, scammers tricking consumers to download apps or getting unsuspecting users to forward SMS OTPS.”

Goh says that knowledge on scam prevention for the public is more crucial.

“Educating and instilling knowledge of how to prevent cyber-based scams is key rather than discarding a long-standing tool that has been proven effective,” he says.

Goh adds that Bank Negara’s decision to nudge banks to migrate away from SMS OTPS will not have any significant impact on Macro Kiosk’s earnings because of its wide product base and the fact that Sms-based services are only a small portion of its earnings.

Notably, Bank Negara has also directed financial institutions to implement other measures.

These include further strengthening of fraud detection rules and triggers for blocking suspected scam transactions and a cooling-off period to be observed for the first-time enrollment of online banking services or secure devices.

Additionally, the central bank said customers should be restricted to one mobile device or secure device for the authentication of online banking transactions and banks will be required to set up dedicated scam hotlines.

Meanwhile, Securemetric’s Sea refers to Fast Identity Online (FIDO) Authentication, which is a security standard that is increasingly recognised internationally for its capability to replace password-only logins with a more secure and fast login, owing to its multi-factor authentication.

According to Sea, FIDO Authentication is simpler for consumers to use, easier for service providers to deploy and is more secure than passwords and SMS OTPS.

Its multi-factor authentication includes the use of biometrics, QR codes as well as unique PINS.

FIDO Authentication is not new in Malaysia, as the National Cyber Coordination and Command Centre (NC4) was the first to adopt it, Sea points out.

Clarence Chan, partner, digital trust and cybersecurity at PWC Malaysia, adds that FIDO’S passwordless authentication stemmed from the goal of minimising phishing attacks, as passwords are the root cause of most data breaches based on various studies.

Ubaid Mustafa Qadiri, head of technology risk and cyber security for KPMG in Malaysia, says: “FIDO is a more secure approach compared to Sms-based OTPS.”

“With FIDO, customers can be restricted to using only one registered device for authentication and online transactions and as a result, will help in reducing financial frauds and scams while performing online transactions,” he adds.

Deloitte’s Chan adds that FIDO standards are seeing greater adoption in recent years, including Malaysia.

Nevertheless, even something like FIDO will not be able to totally eradicate cybercrime.

“Overall security for online transactions is still heavily dependent on the security of the user’s device. So, no authentication method can guarantee 100% safety,” Chan adds.

Meanwhile, Malaysia’s InspectorGeneral of Police Tan Sri Acryl Sani Abdullah Sani has been providing constant updates of the online fraud situation.

He said this week that the Rm415mil losses from January to July this year is the result of 12,092 online fraud cases.

For the whole of last year, losses accumulated to about Rm560.8mil coming from 20,701 cybercrime cases.

For 2019 and 2020, there were a total of 13,703 and 17,227 cybercrime cases with losses of Rm539mil and Rm511.2mil respectively, according to the IGP.

“From 2019 to July 2022, a total of 33,147 suspects in cyber fraud cases were arrested, with 22,196 cases charged in court,” he said.

It should be noted that online banking fraud is not limited to Malaysia.

Globally, cybercrime is the common type of fraud in most industries, based on a survey by PWC titled “Global Economic Crime and Fraud Survey 2022”. (see table)

PWC also notes that cybercrime poses the biggest threats across organisations of all sizes, followed by customer fraud and asset misappropriation.

Additionally, a recent report by S&P Global, titled “Asia-pacific Banks’ Digital Opening Raises Cyber Risks”, notes that threats of cyberattacks are soaring in the Asia-pacific region and globally too.

The report says that for banks, data breaches not only create a direct monetary loss but also damages the reputation of a bank and can hit a bank’s credit profile.

“To prevent attacks, Asia-pacific regulators will need a dogged determination to understand and manage risks. This points to the need for collaboration, and cross-border information sharing to build cyber resilience across entities to prevent systemic risk,” the report notes.

In a separate report, the global rating agency says data breach appears to be the biggest cyber risk for banks, with association to high losses, for both emerging and developed markets. (see table).

Hence, in all likelihood, cybercrime is likely to remain part of the risks that will always exist, more so as online transactions keep growing.

KPMG’S Ubaid points out that the increasing audacity of cybercriminals will keep this threat on an upward trend.

It is left to be seen if the rising tide of cybercrime in the Malaysian financial landscape will reduce following the wide publicity it is getting and the actions being taken by all concerned. 

-  StarBiz Stories by kirennesh Nai

 

Cybersecurity experts share their views

 

THE rise in cybercrime especially in financial services is a huge talking point today.

But is it something that was predicted to happen considering the rise of online banking services?

And is Malaysia being particularly hit hard?

Does the problem lie with the usage of less secure authentication methods such as Sms-based onetime passwords (OTPS) and what can banks do to fix the problem?

Some consultants share their views on these issues.

On the rise of online banking fraud. Ubaid Mustafa Qadiri, head of technology risk and cyber security for KPMG in Malaysia:

Cybercrime in banking or any other sectors will only continue to grow due to technological changes (including digitalisation) and organisational advancements with the introduction of new technology to improve process efficiencies.

Further, the increasing audacity of cybercriminals will also keep this threat on an upward trend.

With the accelerated rate of digitisation as a result of the pandemic, cybercrime has grown more rapidly than it would have, and criminals have evolved their techniques to target more enterprises and individuals to the point that banks have to implement more effective controls.

  Ho Siew Kei, cyber risk leader of Deloitte Malaysia:

 

This is an expected result, not only because of financial institutions’ rapid shift to online banking but a general trend as organisations continue to move towards digital transformation.

It is estimated that 70% of commercial crime cases now can be categorised as cybercrime cases.

Clarence Chan, partner, digital trust and cybersecurity at PWC Malaysia:

 

There is a difference between cybercrime originating from a successful customer scam, and a cybercrime due to lapses in banking IT infrastructure.

Generally, most of the cybercrimes reported lately are due to the former, rather than the latter.

Most of these crimes, if not all, were only successful because the customers gave away their OTP or credentials via the scammer’s phishing attempt.

However, it is fair to assume that local banking customers may eventually be targeted after a similar modus operandi was used against a leading bank in Singapore, which amounted to more than S$13mil (Rm42.07mil) in losses.

Is Malaysia being particularly hit hard?

Ubaid: Online banking fraud is happening everywhere in the world, and it is expected to grow as criminals keep evolving new techniques.

According to the latest statistics, online fraud accounts for 68% of commercial crime in Malaysia. As the use of financial technology (fintech) and e-wallets have rapidly increased over the last four years, online fraud cases have also risen as the rate of adoption increased.

Ho: As a whole, banking fraud is definitely a global phenomenon – various countries have reported a general upward trend in banking fraud over the recent years, and this would apply to Malaysia as well, as Malaysian banks continue down the path of digitisation.

Chan: Online banking fraud is prevalent throughout the banking industry globally where industry players are constantly faced with the challenge of combating constantly evolving fraud techniques.

Looking closer to home, Singapore faces similar challenges as the scamming scene is largely similar. Anti-scamming divisions within the Malaysia and Singapore police force have been actively collaborating in tackling transnational scamming syndicates, participating in Project Icons (International Cooperation On Negating Scams).

In 2019, Bank Negara also introduced the Risk Management in Technology (RMIT) Guidelines, one of the most comprehensive technology and cyber risk management guidelines in this region, with the aim of elevating the banking industry’s security measures and standards, to ensure that online banking services are kept safe and secure for customers.

Since then, plenty of efforts have been made by banking institutions to improve their cyber resilience.

Does the problem lie with the usage of less secure authentication methods such as Sms-based OTPS and what can banks do to fix the problem?

Ubaid: Yes, but it also depends on the central bank’s guidance and the banks’ capability to develop secure mobile banking applications (which requires investment to produce) that would be able to authenticate and authorise transactions more securely.

Recently, the central bank of Malaysia announced that financial institutions should take additional measures to block suspicious transactions, and customers to be asked to confirm if the transactions are genuine before they are unblocked.

Some of the advanced features include:

> Secure TAC

> QR code scan

> Mobile app authentication/ approvals for transactions

> Facial recognition/biometric authentication through banking application

> Device fingerprinting

Ho: OTP and Sms-type authentication is widely supported by most devices, especially older devices. Banks tend to focus on a wider userbase, and rightly so, so as to not cut out different market segments, notably those without access to more modern devices.

Bank Negara’s recent push for financial Institutions to migrate away from SMS OTP toward more sophisticated authentication methods is a step in the right direction. However, there will still be challenges for certain market segments who use the more traditional device at this point in time.

However, as older devices are replaced by devices that are affordable yet are more advanced and able to support the latest technology, we should see adoption of the advanced security features become commonplace.

We are seeing a shift towards soft tokens on mobile devices, where transaction authorisations are sent through push notifications. This means that transactions can only be authorised from a customer’s registered device, and only after the customer has authenticated, typically with their biometrics.

These methods will also see certain restrictions such as customers authentication being bound to a specific registered device.

Chan: In general, there is a visible trend in financial institutions adopting multi-factor authentication technologies which are no longer reliant on SMS OTP.

This includes in-app, certificate-based or biometric authentication, which provides a more secure authentication mechanism and prevents potential OTP hijacking or other phishing and scamming attempts.

With Bank Negara’s directive of moving away from SMS OTPS by 30 June 2023, we can only expect the adoption of these measures to be accelerated.

Is cost holding back Malaysian banks from enhancing their level of security?

Ubaid: Any upgrades, enhancements or technology integration, be it security or others, will always have a cost component as well as skills requirements attached to it.

Typically, each organisation has its technology plans and budgets based on its business strategy, and banks will follow their approved business plans along with budgets in accordance with the guideline from the central bank.

Ho: There is certainly a cost element to enhancing security. However it should be noted that cyber risk and customer fraud have in recent years become a top risk for banks and doing well to combat these risks can also be seen as a competitive differentiator.

While cost is a consideration, I would think that this is an area that banks are fully prepared to spend on given the focus around regulatory expectations, consumer protection and preventing cybercrime.

Chan: We don’t believe that cost is a particular factor holding Malaysian banks back from enhancing their level of security.

If we consider the results of Pwc’s 2023 Global Digital Trust Insights survey, in which banking and capital markets make up the second highest proportion of Malaysian C-suite respondents, 19% of respondents say that their organisation’s cyber budget is increasing by 6% to 10% in 2023.

Also worth noting, 49% of Malaysian respondents agree to a great extent that their cybersecurity budget is allocated well against the risks they face in the next 12 months.

However, banks can continuously explore and enhance their security posture to aid in curbing scams, focusing on educating customers to combat online banking fraud.

To build customer trust, banks should invest in continuous awareness efforts to ensure that their customers remain informed and updated on the latest scam tactics, and modus operandi observed in the industry. - StarBiz 

 

Related posts:

 

Cybercriminals beware: public must be aware of how scams work, Putting the brakes on cybercrime

Wednesday, September 28, 2022

Cybercriminals beware: public must be aware of how scams work, Putting the brakes on cybercrime

 A day after The Star’s page one story on the increasing number of online financial crimes, Bank Negara announces it is joining forces with the police to stem the rising tide. The central bank is instituting tighter security controls while the cops are intensifying efforts to make the public more aware of cybercrimes. 

https://www.thestar.com.my/news/nation/2022/09/27/putting-the-brakes-on-cybercrime?dmplayersource=share-link

  Public must be more aware of how scams work

KUALA LUMPUR: Cybercriminals are very good at quickly adopting and exploiting new technological changes to stay ahead of law enforcement while they scam millions from the public.

This is why the number of online financial crimes is rising around the world and in Malaysia, according to Inspector-general of Police Tan Sri Acryl Sani Abdullah Sani.

Such crimes can have terrible consequences, he pointed out in his speech before he and Bank Negara governor Tan Sri Nor Shamsiah Mohd Yunus launched a virtual Financial Crime exhibition yesterday.

“Financial crimes can devastate the victim and lead to more mule accounts being created for the purpose of scams. It can also have a negative impact on the nation’s economy in the long term,” said Acryl Sani.

Loan scammers and Ah Long (loan sharks) use social media sites and chat applications to advertise their loan offers with fast approvals.

“The syndicates will deal with the victims online and demand various documents and fees before duping them,” he explained.

Bukit Aman expects the syndicates will still employ similar tactics, but they will focus on a younger victim pool – students and youths – to pull off illegal money lending and mule account scams now.

“We are cooperating with banking institutions to ensure investigations, especially those involving mule accounts, can be completed faster,” Acryl Sani said.

Fraud in online purchases, loan and investment scams, the Macau and African scams, business email hacks and SMS scams are the main types of financial crimes and such cases have been on the rise from 2019 to 2021 (the last full year on which statistics were collected), the IGP said.

In 2019, there were 13,703 cases recorded with Rm539mil in losses; followed by 17,227 cases in 2020 and Rm511.2mil in losses; and 20,701 cases last year with Rm560.8mil lost. As at July this year, 12,092 cases had been recorded, resulting in Rm414.8mil in losses, he said.

Bukit Aman has rounded up 33,147 suspects between 2019 and July this year, while 22,196 cases have been prosecuted.

While there is some awareness among members of the public of such crimes nowadays, it is still not strong enough to prevent increasing numbers.

The Royal Malaysia Police has various programmes and campaigns to raise awareness about cybercrimes among the public, such as the “Let’s Fight Scammers Together” campaign.

“We will step up such activities this year,” Acryl Sani added.

The IGP advised the public to safeguard their personal information and avoid downloading files or applications from unverified sources onto mobile devices.

Account holders who encounter suspicious transactions involving their bank accounts should immediately notify their banks, contact the CCID infoline via Whatsapp at 013211 1222, or the CCID Scam Response Centre at 03-2610 1559/1599 or BNMTELELINK at 1-300-88-5465.

“They should also lodge a police report to facilitate the investigation,” said Acryl Sani.

The virtual Financial Crime exhibition by Bank Negara Malaysia Museum and Art Gallery, which can be accessed at bit.ly/bnm_ crime, lays out various types of financial crimes and how they have evolved over time.

It features interactive exhibits that allow the public to simulate financial scam scenarios. Through the various exhibits, the public will be able to learn strategies – such as Spot, Stop and Share, aka 3S – to protect themselves and others from becoming victims. 

 

Putting the brakes on cybercrime

 Banks to further tighten security control to stay one step ahead of scammers

KUALA LUMPUR: If you notice your online banking transactions taking a little longer in the future, don’t complain. It’s a sign that your bank is trying to protect you from cybercriminals.

Concerned by the rising number of scams and online financial crimes globally and in Malaysia, Bank Negara is directing the banking industry to undertake tighter security controls, its governor Tan Sri Nor Shamsiah Mohd Yunus said.

ALSO READ:  Public must be more aware of how scams work

The level of concern is great enough to bring about a rare high-level meeting between Nor Shamsiah and Inspector-General of Police Tan Sri Acryl Sani Abdullah Sani yesterday, when they also launched a virtual Financial Crime Exhibition.

“Bank Negara requires banks in Malaysia to adopt high standards of security, especially for Internet and mobile banking services,” Nor Shamsiah said in her speech at the event.

ALSO READ:Watch out! There are many ways in which we get duped

This will include measures such as migration of SMS one-time-passwords (OTPs) to a more secure form of authentication; further tightening of detection rules and triggers for blocking scam-related transactions; and subjecting first-time enrolment of online banking services and secure devices to a cooling-off period.

Customers will also be restricted to one mobile device or secure device for authenticating online banking transactions, and banks will also be required to set up dedicated scam hotlines.

ALSO READ: Consumers must become more aware of scams

While the control measures may entail some inconvenience, they are important to protect customers.

“These controls may lead to some friction or inconvenience in the online banking experience of customers.

“For example, online banking transactions might take a little longer to process. Financial institutions will also conduct more checks when customers request to change or register a new phone number,” Nor Shamsiah said.

Fighting crime: Bank Negara Governor Tan Sri Nor Shamsiah Mohd Yunus and Inspector General of Police Tan Sri Acryl Sani Abdullah Sani at the virtual launch of Bank Negara Malaysia Museum and Art Gallery’s ‘Financial Crime: Scan Before You’re Scammed’. — Bank Negara

Fighting crime: Bank Negara Governor Tan Sri Nor Shamsiah Mohd Yunus and Inspector General of Police Tan Sri Acryl Sani Abdullah Sani at the virtual launch of Bank Negara Malaysia Museum and Art Gallery’s ‘Financial Crime: Scan Before You’re Scammed’. — Bank Negara

However, she said, when implementing these measures, Bank Negara and the financial industry will continue to carefully balance between security considerations and customer convenience.

She also said that financial institutions have been directed to be more responsive to scam reports lodged by customers and to facilitate efforts to recover and protect stolen funds, including working with relevant agencies to prevent further losses.

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“Bank Negara will also continue to monitor and take appropriate action with financial institutions to ensure that the highest levels of controls and security standards are observed.

CLICK TO ENLARGECLICK TO ENLARGE 

 https://cdn.thestar.com.my/Content/Images/cybercrime.jpg

“We will also continue to take effective preventive measures against ever-evolving financial scams.”

Together with the financial industry, Bank Negara will continue to ensure that banking and payment channels remain secure and equipped with the latest security controls, she said.

Acknowledging that criminal tactics change all the time, she said that Bank Negara continuously intensifies deterrent efforts and introduces additional controls as well as safeguards and collaborates with other stakeholders to keep ahead of scammers.

These include rolling out preventive measures, pursuing more effective and coordinated enforcement actions, and raising public awareness.

“The effort to eradicate financial scams requires cooperation and concerted action from all parties – not just from Bank Negara and the financial industry, but also from law enforcement agencies and relevant ministries and agencies, as well as the public,” she added.

Bank Negara, together with the police, Malaysian Communications and Multimedia Commission and National Anti-Financial Crime Centre, will work together to further elevate the Commercial Crime Investigation Department’s Scam Response Centre into a more systematic information-sharing platform that will enable quicker action to prevent further losses.

Nor Shamsiah said the cooperation of law enforcement agencies is key, especially in sharing information and intelligence.

The public also has a role to play in protecting themselves by making sure to be aware of scams.

“An important aspect of dealing with financial scams is raising public awareness about tactics used by criminals and the steps that the public can take to avoid becoming victims.

“In this regard, Bank Negara, the financial industry and law enforcement agencies will continue efforts to enhance the effectiveness of awareness programmes and improve on the dissemination of information to the public,” she said.

The virtual Financial Crime Exhibition launched yesterday is an example of such efforts as it seeks to educate the public about financial scams. It can be viewed at bit.ly/bnm_crime. 

By FARIK ZOLKEPLIRAGANANTHINI VETHASALAM    

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PUTTING THE BRAKES ON CYBERCRIME - PDRM

United States: Putting Brakes On Cybersecurity Threats

Sunday, December 16, 2018

More than just a trade war, US in skirmises with China over IT, trade and 'national security'

https://youtu.be/pSHOSumep9E
https://youtu.be/4fJKlEyEOEg https://youtu.be/N5Ta_RhsXYY


American economist Jeffrey D. Sachs says Canada is doing the Trump administration's bidding in its handling of the Huawei case. To read more: https://www.cbc.ca/1.4947966


Nobody is supposed to win any war, and the US is anxiously proving that true in skirmishes with China over IT, trade and ‘national security’.

CHINA will not have Ivanka Trump arrested if she were to transit through Hong Kong airport, even now.

Beijing does not have the intent or capacity for that – nor the recklessness required for it, particularly in the throes of a trade war.

But US authorities had Sabrina Meng Wanzhou arrested while transiting through Vancouver airport. Ivanka and Sabrina are prominent businesswomen, but there are also differences between them. Ivanka is the daughter of President Donald Trump. In China and elsewhere, Sabrina is the daughter of modern China and its historic rise.

Critics of Sabrina’s arrest call it a kidnapping. The charges against her are unclear, the intent lacks transparency, and the action itself is unprecedented even for US double standards and a maverick president.

British politician George Galloway condemned Sabrina’s arrest as piracy, a death wish and an act of war. Prof Jeffrey Sachs calls it almost an act of war on China’s business world exposing Washington’s “supreme hypocrisy.” He finds the official pretext lacking credibility. Sachs says that in the past nine years alone, the US penalised 25 other companies from almost as many countries for violating unilateral US sanctions on doing business in third, fourth or fifth countries.

Yet in all these cases the US held the company responsible rather than an individual officer of the company. The case against Huawei had taken an unprecedented and disturbing character from the start.

Jack Ma says the trade war itself is only part of the complicated and now troubling relationship between the US and China. It is so messy that he sees any resolution only in another 20 years.

At one level, today’s US phobia about doing business with China relates to what Washington calls security concerns. Huawei founder and Sabrina’s father Ren Zhengfei was reportedly an elected official of the Communist Party of China (CPC) in 1982.

What would that mean for Ma of Alibaba, confirmed only two weeks ago as a current card-carrying member of the CPC? Nobody outside Washington seems too bothered.

Business, especially international trade, is supposed to be above petty political differences in a very diverse world. But apparently, pettiness matters in a trade war scenario veering towards a cold war. The trade war mindset and the persecution of Huawei are situated within global superpower and geopolitical rivalry between the world’s two biggest economies.

China is still a developing country despite its many achievements, and is determined to press ahead with more growth to develop its poorer regions. Huawei is in the forefront of this national resurgence.

The US remains the world’s technology leader and sole superpower – and intends to stay that way. Since a hyper-competitive international environment does not always favour it, it has resolved to block any challenge while complaining about trade with China.

Owing to China’s population size, significant GDP growth per capita would mean development on a massive scale. And because of reliance on international markets and global supply chains, connectivity makes infrastructure and IT vital.

The current US position on China consists of the phobias and manias of senior administration officials around Trump.

Among the most prominent is economics hawk Prof Peter Navarro, head of the White House National Trade Council. The author of Death By China was conspicuously left out of Trump’s cordial visit to China last year.

Since then, Navarro has moved closer to the Oval Office. So have other hawks circling China.

John Bolton is a Bush-era neo-conservative savouring entry into Trump’s inner circle. That did not happen in the first year, but now he is National Security Adviser. Bolton is notorious as instigator of the Iraq invasion. Now he has focused his foreign aggression on a trade war, indicating he had more to do with Sabrina’s arrest than Trump himself.

US Trade Representative Robert Lighthizer is another hawk eager to target Beijing. He regards China as a “trade threat” and has grown personally close to Trump.

The Economist called US Commerce Secretary Wilbur Ross a protectionist, and he has submitted to the hawkish trend against China. His shares in some China companies are no longer an issue, especially after he has turned his China experience to serve US nationalist interests.

Yet for all their devices, the attack on China by targeting Huawei will not dampen – much less stop – China’s rise. It will teach China to be more vigilant about trade partners, steel it for future pitfalls, and redouble its efforts to grow stronger.

Already there are signs of Sabrina’s arrest being counter-productive, with other forms of blowback against US interests virtually assured.

First, Beijing’s support for Chinese firms like Huawei operating internationally will grow. Even greater state-industry collaboration in China’s national interests, particularly when abroad, can be expected.

Second, China’s corporate sector will offer even greater support for the Government and the CPC in return. As this happens at multiple levels, China’s international competitiveness can only heighten.

Third, public support in China for Chinese companies has also grown, fuelling the rise of Chinese nationalism. Even before Sabrina’s arrest, a nationwide survey found majorities in 300 Chinese cities would boycott US companies.

Fourth, public support for the Chinese state and the CPC continues to accumulate. Whenever the national interest is threatened, all sectors close ranks against the common foe.

Fifth, the action against Huawei has provoked China and triggered its people’s national pride. The extent to which this will multiply is still uncertain, but a clear sense of it is evident in social media.

Sixth, international support for China and its campaign for free trade are set to grow. This involves more than just companies fearful of similar actions for violating US sanctions, since the US has alienated itself from even its allies.

Seventh, the Chinese diaspora in Canada has come out in support of Sabrina and other unfortunate Chinese nationals caught in such a situation. It has become more than just a national or criminal matter.

Eighth, Chinese Americans may also feel the racist pinch of US policy and act similarly. Will they then become suspects to their own Government?

Malaysian entrepreneur and Harvard MBA Tan Hock Eng’s Singapore-based Broadcom was supposed to take over California-based Quallcom in the biggest IT deal in the world. But in March this year the US scrapped the deal in the name of “national security interests.” To many ethnic Chinese that was a racist move.

Ninth, while some countries may sympathise with China over Huawei, others may just be put off by the US action and attitude. The result would be a net loss for US standing and prestige.

To provoke a rising China and get away with it requires consistently deft handling and masterful strategies. Both are lacking in Washington.

Trump has not been focused enough to even make senior administration appointments after two years. Melania Trump has also been pressuring her husband to dismiss the Deputy National Security Adviser.

The departure of senior staff has already been peaking on its own, many for personal reasons. Then Robert Mueller’s continuing investigations and indictments will add further to the dismissals.

All this is what comes of a “trade war” that is about more than just trade, involving more than any conventional notion of war.


Bunn NagaraBehind The Headlines

By Bunn Nagara, a Senior Fellow at ISIS Malaysia.
G2 becomes more pivotal




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Tuesday, May 3, 2016

Jack Ma, Asia's richest envisions the newspaper to leverage Alibaba's technology & resources

Ma: 20 more years of enviable growth for China


In an interview with the South China Morning Post, Alibaba founder Jack Ma shares his views on the Chinese economy and the importance of entrepreneurship in supporting development.


CHINA’S economy will face “a difficult three to five years” but the slowdown will be good for its long-term development, Alibaba executive chairman Jack Ma told the South China Morning Post (SCMP) just before the e-commerce giant’s takeover of the 113-year-old newspaper.

Ma said the Chinese economy was indeed grappling with structural problems and that the authorities were working hard to steer it onto a new growth path.

But he dismissed fears that China would follow Japan’s route to stagnation, saying the country still had huge potential waiting to be tapped.

The rapid growth of China’s Internet economy and consumer culture could help the country through its temporary difficulties, Ma said.

China would likely continue to grow at a rate “enviable to most other major economies for 15 to 20 more years”, he said.

Ma gave the two-hour interview in Hangzhou, eastern Zhejiang province, during which he also discussed his vision for the SCMP, cultural differences between the east and west, and his concerns for Hong Kong’s next generation.

Commercial and residential buildings in Guangzhou, Guangdong province.

China’s economy has been grappling with structural problems but Beijing is working hard to steer it onto a new growth path.

On China’s economy, the businessman said it was unrealistic to expect an economy of such scale to maintain double-digit growth indefinitely.

“There is no reason to expect that an economy of such size can maintain such a growth rate indefinitely, nor is it good for China to continue to grow at such speed,” Ma said.

“After more than 30 years’ growth, spending a few years to adjust its course is reasonable.

“Some say the actual (growth) number could be just 5%. But even with 5% growth, there is no other economy of such size growing at that speed in today’s world.”

Comparing China with an ocean liner, Ma said the Chinese leadership understood that the country’s old growth model was unsustainable and that they needed to chart a new course.

“It is easy for a small boat to change its course. But as the world’s second-largest economy, China is like an ocean liner... we have to choose either to not slow down and overturn the ship, or to slow a bit to make the turn,” he said.

The key was to create enough jobs to keep the economy stable and buy time so the country could complete its much-needed transformation, Ma said.

Fortunately for China, he said, the rise of its Internet economy happened at the right time.

China’s gross domestic product grows 6.7% in first quarter – a good start to 2016

“The traditional industries are struggling, but we also see growth in domestic consumption, the services industry and the hi-tech sector, and young talents are flocking to these areas,” he said.

“The logistics and delivery industries create plenty of jobs for low-skilled workers. We still have a lot of room for growth.”

Ma said the deciding factor in a true economic transformation would be the country’s ability to unleash the entrepreneurial spirit among the young and create an environment to help it flourish.

“I believe there will be some great enterprises arising from China,” he said.

“The monetary policy and supply-side reforms are very important and can help rejuvenate China’s economy.

“But to me, the most important thing is entrepreneurship. If this can flourish in China, China will become successful.”

China’s slowdown had triggered panic among foreign investors, with some choosing to leave the country.

But this actually created fresh opportunities, Ma said.

History had proven that those who bucked the trend to invest in China during difficult times always received good returns, he added.

“China needs to develop its rural areas; China needs to develop its cultural industry. It is also shifting focus to services and IT industries. There are still plenty of opportunities around,” Ma said.

Global media agency in the making



http://www.thestar.com.my/business/business-news/2016/05/03/global-media-agency-in-the-making/

In the second part of an interview with SCMP, Ma says he envisions the newspaper to leverage on Alibaba’s technology and resources.

JUST why does Jack Ma want to own a newspaper, and what will he do with it?

Those are the biggest questions that have confronted readers of the South China Morning Post (SCMP) since news broke of Alibaba Group’s acquisition of the 113-year-old English-language newspaper late last year.

Now, for the first time since the Chinese e-commerce giant’s takeover earlier this month, Ma has outlined his vision for the newspaper.

The acquisition has raised eyebrows, with some suggesting that the SCMP – which has for decades been reporting aggressively on China – would change its direction.

A few even believed the newspaper might henceforth gloss over sensitive or controversial issues that risked incurring the wrath of the Chinese leadership.

In a face-to-face interview with the SCMP in Hangzhou, eastern Zhejiang province, Ma addressed these concerns, explaining why he believed in having a narrative on China that was different from that of both the mainstream Western media and Chinese state media.

“I don’t see it as an issue of (coverage) being ‘positive or negative’,” the Alibaba executive chairman said. “It is about being impartial and balanced... We should offer a fair chance to readers (to understand what is happening in China), not just a fair chance to China.”

China’s growth will remain enviable for the next 20 years, says Ma.

As a reader, Ma said, he valued the importance of obtaining unbiased information in order to draw his own conclusion based on the undistorted facts presented to him.

“I believe the most important thing for the media is to be objective, fair and balanced. We should not report a story with preconceptions or prejudice,” he said.

With its access to Alibaba’s resources, data and all the relationships in its ecosystem, the SCMP can report on Asia and China more accurately compared with other media who have no such access.

“Sometimes, people look at things purely from a Western or an Eastern perspective – that is one-sided. What the SCMP can do is to understand the big ‘why’ behind a story and its cultural context.

“I want to stress the importance of being fair to our readers. You should not impose your own view and prejudice on the readers and try to lead them to a conclusion. As a reader, I understand what a fair report is.”

The tech tycoon said his vision was to transform the SCMP into a global media agency with the help of Alibaba’s technology and resources.

Alibaba, the world’s biggest online trading platform, is aggressively developing big-data and cloud technology. Every day, it analyses and processes a massive volume of data that can provide powerful insight into the world’s second largest economy.

Ma reiterated his promise that Alibaba’s management would not take part in the SCMP’s newsroom operations. Rather, it wanted to represent readers’ interests and give feedback on how to improve readers’ experience, he said. “As I said to Joe (Tsai), you are going to the SCMP as a representative of its readers. You don’t have to represent shareholders. You speak for the readers,” Ma said, referring to Alibaba’s executive vice-chairman who is now the chairman of the SCMP. Ma, who last year unveiled a HK$1bil fund to help Hong Kong’s young entrepreneurs start up their businesses, said he invested in the newspaper because he “loves Hong Kong”.

Hong Kong was stuck in a rut and in danger of losing its direction, the billionaire said, urging Hong Kong’s youth to hold on to the city’s uniqueness and have faith in its future.

“The city has lost its can-do spirit. The big businesses are less willing to take risks. I talked to some young people in Hong Kong and they said they are lost. Young people indeed have fewer opportunities than before. But is it true that there are no more opportunities for them? No!” he said.

Hong Kong had many strengths that were unique to the city, Ma said.

“It has the best location. The ‘one country, two systems’ allows it to enjoy the good things from China’s growth and the best things from the West... The quality of Hong Kong’s graduates can match the finest from any other city. Its services industry is first class,” he said.

“Hong Kong people say Hong Kong needs to preserve its uniqueness. I say Hong Kong’s uniqueness is in its diversity, its tolerance of difference cultures... China does not want to see Hong Kong in decline. I have full confidence in its future.” – SCMP

By Chow Chung-Yan The Star

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In talks: A photo illustration shows the South China Morning Post website displayed on a computer in Hong Kong. Jack Ma is in talks to buy a stake in the publisher of SCMP. – Reuters icon videoLet our readers see China from more angles and perspectives’
Bearish market: An employee is seen behind a glass wall with the logo of Alibaba at the company’s headquarters on the outskirts of Hangzhou. Alibaba is trading below its initial public offering price of US68 after plunging 20 in the past year as it grapples with slowing growth, the result of its reliance on a decelerating Chinese economy. — Reuters



Jack Ma’s potential entry lends fire to SCMP

Wednesday, April 27, 2016

Cloud storage for personal files made safe

Utilise various services: As different Cloud services are suited to different types of files, it makes sense to spread your files out over several different Cloud storage providers. — Illustrations: MUHAMMAD HAFEEZ AMINUDDIN/The Star

Find the best space for your personal files on the Cloud.


In the movie Creed, Sylvester Stallone’s Rocky Balboa character looks baffled when a young boxer snaps a picture of a handwritten exercise regime with his smartphone instead of just keeping the paper.

Balboa gets even more confused and looks skywards when the young boxer tells him it’s stored on the Cloud so that the information won’t be lost even if he loses his handphone.

It’s hard to deny the rising importance of Cloud computing in our daily lives, as most of the content, services, apps, and even enterprise systems today reside on the Cloud.

Most of us are probably aware of or have used services such as Google Drive, Dropbox and OneDrive.

These services, also known as public Cloud, requires little effort from you other than having to sign up for them.

Most are free and offer up to 15GB of space – if that’s not enough you can subscribe for a nominal sum to bump up storage space.

As these services are mostly operated by tech giants, you don’t have to worry about any of the technical stuff, but on the flipside, you don’t have much control over it.

If you wish to create your own Cloud, it’s now easier than ever as the price of devices and components ­needed to set up such a service have fallen a lot.

Also known as private Cloud, it allows you to keep your files within your own servers and manage them as you see fit.

It takes a bit of investment and know how – our accompanying story will help you decide if you should go for public or private Cloud.

Here we will explore the best public Cloud services so that you can pick one (or two or three) that meets your needs best.

Free and easy

Almost all the public Cloud offerings have a free option – they differ mostly in the size or additional services offered.

Our pick for the best free Cloud service is Google Drive, as you get 15GB without having to spend a single sen.

More importantly, Google has tied Drive to its online services such as Gmail, Photos and Keep, as well as ­productivity tools like Docs, Sheets and Slides.

So all your photos and documents will be synced automatically and will be available from one place.

If 15GB option is too limiting then you can opt to subscribe. For US$1.99 (RM8) a month, you get 100GB of ­additional space.

If you just want sheer volume then try out Mega which offers a whopping 50GB of space for free.

It doesn’t set a limit on file size like most of the other services, but we found the data transfer speed to be a bit slow.

Space for shutterbugs

It goes without saying digital cameras and smartphones in particular have made it easier than ever for everyone to shoot photos.

The real problem, however, is in managing your photos and finding a place to store them.

Most back them up to a desktop or laptop and while it’s better than not backing up at all, is not a good solution as all hard drives have a finite lifespan.

If you don’t have redundancy then you need to find a better solution in the Cloud and we recommend Flickr.

It gets our vote because it offers 1TB of space for free, which should meet the requirements of most users.

Photo size is capped at 200MB while video at 1GB for a single file which is reasonable.

It also has smart photo management which will automatically sort out ­images according to groups such as animals, people and buildings.

Free users will, however, see ads and will not be able to access the ­desktop app for uploading photos.

Like most services, it doesn’t support the uncompressed RAW file format which is preferred by photographers who use DSLRs.

If you like keeping your file as RAW, you will need a service like Amazon Cloud Drive which allows you to upload an unlimited number of ­photos, including RAW files.

Its Unlimited Photos plan will cost you US$11.99 (RM50) a year which is not too bad as RAW files take up a lot of space.

The unlimited offer doesn’t extend to other files, including video – for these files you are limited to only 5GB.

If you need to find space for your videos then you will have to opt for the more expensive plan called Unlimited Everything which costs US$59.99 (RM240) a year. This service, while expensive, lets you upload to your heart’s content.

Cross platform

Nowadays it’s not uncommon to own multiple devices running on different platforms.

If you have, say a MacBook Air for work, Windows PC at home and Android smartphone, you need a Cloud service that supports as many platforms as possible.

While the dominant operating systems – Windows, OS X, Android and iOS are usually supported, other operating systems such as Windows Phone and Linux are often overlooked.

Thankfully Dropbox doesn’t do that – it supports almost every platform, including the ones mentioned above. If you want an alternative, try Box, as it also works on many platforms except Linux.

By Lee Kah Leng The Star

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