New ways – Artificial Intelligence in Cyber Security

Defense against cyber attacks through new technologies

Author: Jochen Werne – published by Der Bank-Blog – 15 February 2019

Cyber crime has become a serious threat to business, politics and private individuals since a long time. New technologies based on the use of artificial intelligence might offer more security.

The fight against cyber threats has become significantly more complex for global government organisations, businesses, and individuals in recent years. Technical protection of IT systems and infrastructures and thus data security in the narrower sense are no longer the only issues. Companies, for example, need to address the much broader concept of information security.

Solutions based on artificial intelligence could prove helpful in the fight against cybercrime. According to a study by the IBM Institute for Business Value, the spread of intelligent, AI-based security solutions will increase significantly in the coming years.

Technical protective measures have long since been based on machine learning, for example, to identify spam or phishing e-mails or to record trends and anomalies in large amounts of data – both in data traffic within the corporate network and in its external connections.

Jochen Werne
Jochen Werne

AI systems for the identification of cyber attacks

In future, for example, systems might also be able to identify hidden channels in the corporate network through which cyber criminals attempt to acquire data. AI’s greatest strength, pattern recognition, enables automated detection of a wide range of anomalies and security incidents. For this purpose, however, AI-based systems must also learn to distinguish between common IT failures and cyber attacks. In addition, self-learning algorithms need to take internal corporate processes into account to come up with precise results.

In the near future, according to a forecast by Christian Nern, former Head of Security Software DACH at IBM Germany and today Partner at the Consulting firm KPMG, AI-based security analysis systems will be able to detect and fend off attacks proactively. Then, according to the former IBM security software chief, the confrontation between cyber criminals and security officers could possibly take place directly between the AI systems they use.

Germany as a pioneer country

Germany, which considers itself a pioneer country in the fields of learning systems and artificial intelligence, has already launched a platform for artificial intelligence on this topic initiated by the Federal Ministry of Education and Research (BMBF): “Learning Systems”. The platform with its 200 members brings together leading experts from science, business and society and deals with technological, economic and social issues relating to the development and introduction of learning systems on an interdisciplinary and cross-sector basis.

One of the seven working groups deals in particular with IT security, privacy, law and ethics. The composition of the topics in this group shows the interwoven culture-specific discussions that will later lead to scenarios, recommendations, guidelines and roadmaps.

Intelligent combination of available modules

As often in cyber security topics, there is no patent solution for the numerous questions and challenges. A company-wide risk management system, which establishes appropriate technical and organisational measures and also takes into account findings from psychology and cultural studies, seems to be a sensible way forward.

The right balance between security awareness and security, individual freedom paired with increased personal responsibility as well as support through technology and organisational structure is probably the most promising approach in the current state of research and technology to effectively meet the challenges for information and IT security.

Tradition meets modernity: Why more and more banks are relying on artificial intelligence

Artificial intelligence is finding its way into the highly regulated world of banking. And not only GAFA Silicon Valley high-tech companies see it as the technology of the future, but also FinTechs and established banks. How it came to this, what possibilities and limits there are at the moment and why humans will remain irreplaceable not only when it comes to money – the commentary

by Jochen Werne, innovation and transformation expert
Munich private bank Bankhaus August Lenz

Original published in German in the IT-Finanzmagazin (31 July 2018). Translation by DeepL

After “FinTech”, “Blockchain” and “Crypto”, “AI” is the new buzzword in the banking world. Whether chatbots in the digital customer center or self-learning algorithms for highly complex investment strategies are being discussed – the omnipresence of the term suggests that the integration of artificial intelligence into one’s own business model seems to be virtually vital.

Artificial intelligence and big data are currently the strongest and most vibrant innovation trends in the financial sector …

… was also one of the guiding principles of Prof. Joachim Wuermeling, board member of the Deutsche Bundesbank, in his speech on “Artificial Intelligence” at the second annual FinTech and Digital Innovation Conference in February 2018 in Brussels.

The choice of the conference venue, which like rarely any other city combines both a belief in progress and a deeply rooted European tradition, can hardly be more symbolic of the forthcoming change. In fact, the topic is by no means new: the development towards an increased use of so-called non-human intelligence is based on approaches from the 1940s – with the invention of the first computers

Artificial intelligence: revolution as a reaction to mountains of data?

But what is now possible in times of exponential technologies is in fact nothing less than a revolution. The financial industry is sitting on a valuable mountain of data, the extent of which is currently difficult to estimate. The maturing AI systems would not only make the preparation and processing of this data easier, but also much more cost-effective, faster and more targeted. Data already collected could become the most valuable raw material and a resource due to the technological leaps in the field of AI, which, in combination with the enrichment of external, non-structured data, must be “usable” in a meaningful way.

The industry is asked to use private data in a sensitive way for the benefit of the customer, – a goal that should certainly apply to all AI-based approaches.

To find meaningful regulations for the handling and the effects of the use of AI on society, economy and thus on our life and the work of tomorrow is the task of politics. The fact that this topic is taken very seriously is evident not only in national initiatives such as the German Platform for Artificial Intelligence “Learning Systems”, but also in the European Artifical Intelligence shoulder-to-shoulder approach, which is being pushed forward by France and Germany.

“Digital hand holding” in the event of a financial crash is not enough

At present, it is still too early to say which operational areas of the financial world will sooner or later be supported – in part or even entirely – by the use of AI systems. However, the financial crises of the past have shown this time and again:

Trust is crucial when it comes to money. Trust in the markets, the banking system and the human contact as an intermediary in a complex issue”.

However, the banking industry knows very well from its own experience how easy it is to loose customer’s trust. An experience that Mark Zuckerberg and Facebook recently also had to make in connection with the Cambridge-Analytica scandal. As with every new technology and every new approach, the same applies to the topic of “intelligent” systems: a lot of trust, coupled with half-knowledge and a big dash of emotionality results in a popular trend cocktail, which, however, bears a certain risk of headaches on the following day.

Jochen Werne

Jochen Werne is the authorized signatory responsible for Marketing, Business Development, Product Management, Treasury and Payment Services at Bankhaus August Lenz & Co. After two years as navigator of the sailing training ship ‘Gorch Fock’, the international marketing and banking specialist completed his studies as client coverage analyst at Bankers Trust Alex. Brown International and in Global Investment Banking at Deutsche Bank AG, he has worked on numerous projects in other European and American countries. In 2001, he joined Accenture as a Customer Relationship Management Expert in the Financial Services Division before joining Bankhaus August Lenz & Co. AG in Munich, where he has since been responsible for various areas of the institute. As part of the Innovation Leadership Team of the Mediolanum Banking Group, a member of the expert council of Management Circle and the IBM Banking Innovation Council, Jochen Werne is a keynote speaker at numerous banking and innovation conferences.

The Cultural Dimension of Cyber Threats

Country-specific aspects of cybercrime.

The number of cyber attacks on businesses, governments and individuals is increasing worldwide. The human being in his cultural environment is an important element. Different cultures seem to be associated with different susceptibilities.

by JOCHEN WERNE – Original published in German on January 18, 2019 at Der Bank-Blog – Translation with DeepL.com



In its annual management report “The Situation of IT Security in Germany 2018”, the Federal Office for Information Security records a threatening scenario: The number of cyber attacks on the federal government, German industry and private individuals is increasing at an alarming rate. Germany, in particular, is being massively targeted by criminal hackers.

One thing is certain: almost 90 percent of all cyber attacks have a criminal background. Approximately ten percent of all cyber attacks are caused by state cyber warriors. The goal of criminals is either personal data (account connections, credit card numbers, passwords, etc.) or capturing the computer for new attacks via bot network or to extort ransom money for the renewed release of the computer. The ransomware “Wannacry” is an equally prominent and frightening example of this. If state systems become the target of hackers, this usually results in sabotage, espionage and the spying out of trade secrets. The BSI discovered 800 million malicious programs for computer systems last year. In the previous year, the figure was 600 million – around 400,000 malware variants are added daily.

Cyber Security and the Human-Cultural Factor

The view must be directed to an important dimension of the human factor: The influence of different cultures on the handling of technology and in particular on the behaviour of individuals in the context of cyber security. Cultural peculiarities influence preferences, prejudices and behaviours. In his renowned book “The Culture Code”, anthropologist and marketing expert Dr. Clotaire Rapaille explores how members of different nationalities have developed very different codes for the image of products, companies or countries.

These findings come from client assignments in which Dr Rapaille conducted extensive interviews with focus groups to identify cultural preferences, prejudices, idiosyncrasies and behaviors. In more in-depth analyses, a piece of generalized psycho-cultural characteristics is then derived from representatives of the countries studied.

Country-specific aspects of cybercrime

Questions arise as to what protective concepts and guidelines might look like that take this background into account appropriately? And what role do cultural and country-specific aspects play here, such as the famous “German Angst” and corporate cultural aspects, such as the comparison of a classical hierarchical system versus Holacracy models, which have become increasingly en vogue in times of digital transformation?

Some concise examples from the findings of Dr. Rapaille: Americans define themselves strongly through their work. In this culture, professional activity largely determines the image of one’s own identity. The importance of money in this culture is proof of diligence and success.

The author sees completely different meanings in European countries. In France, for example, work and money are regarded more as “necessary means to an end” – those who can afford it expect at least a certain amount of entertainment and comfort from their job there. According to Dr. Rapaille, quality and technical perfection play an important and in some cases even absolute role in Germany or Japan, while US-Americans, according to his analyses, in many cases content themselves with “It just works” and are even sceptical about excessive perfection.

The author recognizes the Germans’ tendency towards perfectionism, which is partly exaggerated from a foreign point of view, as decisive for the quality of “German Engineering” and the global economic success of the Germans in this field. Dr. Rapaille is convinced that US culture, on the other hand, is characterized by a widespread refusal to grow up, which in turn leads to a great competitive advantage in the field of innovation.

Conclusions for more cyber security

This raises the question what are the appropriate protection concepts in an increasingly complex threat situation. A classic approach is the definition and enforcement of policies, both on a technical and organizational level, which are intended to guarantee compliance with security measures. The more hierarchically and authoritatively a corporate culture is aligned, the more restrictive the corresponding guidelines usually become.

However, the approach of establishing security primarily through bans and restrictions on user freedoms has proven to be double-edged in practice. The more the possibilities of an individual user are restricted, the more this encourages the tendency to escape the corset of safety-related rules.

A typical consequence is the “Bring Your Own Device” (BYOD) problem with which many company IT departments have been confronted for years – if the functions and authorizations of their work equipment are too limited, users bring private end devices with them to the workplace. These are then often not integrated at all into the protection and security concepts of the company. If the BYOD escape route is also suppressed, such measures often result in a refusal attitude à la “The desired is not possible with the means available – if the IT department wants it that way, then this task cannot be solved”.

Flat hierarchies and personal responsibility as a solution?

Is the better way, then, in holacracy models, in flat hierarchies, or in “loose reins” in terms of security and a strengthening of employees’ personal responsibility?

For the reasons derived in the preceding sections, this approach is by no means a guarantee for higher IT and information security. A healthy middle course could lie in adequate risk management. Technical and organisational security measures take into account the hazard level of specific data and applications. Sensitive areas and particularly sensitive data are subject to more stringent security measures, business areas or processes with less sensitivity are also protected, but assign employees a higher degree of personal responsibility. All protective measures take into account the above-mentioned psychological and cultural-historical findings.