The Power of Smartphones: Taking the ‘Red Pill’
Mobile phones, once simply tools for making voice calls, are now fully connected and versatile devices, placing all the power of a computer in your pocket that most of us can’t imagine life without. With the power of increasingly tiny microprocessors, smartphones have completely transformed the way we generate, consume and share data about ourselves and the world around us.
Already today, your smartphone is enough to run virtual meetings, edit documents, view presentations, email clients, schedule appointments, trade shares, take a picture or video, and send these to the other side of the world in an instant. In other words, smartphones are so unbelievably powerful that for a lot of people, they can run their business from their pockets, not to mention engaging in Day Trading on-the-go!
Currently, nearly 5 billion people in the world own a smart and a feature phone, making up just over 62% of the world’s population or 90% of the adult population in developing countries. Smartphone use is growing at 9% per year with an estimated 7.2 billion in use by 2023, five times the number of PCs. Today’s smartphones are faster than the mid-’80s Cray-2 Supercomputer, faster than the computer onboard the 2014 Orion spaceship NASA tested to go to Mars and, perhaps most significantly, faster than the laptops most of us are carrying around.
Without a doubt, smartphones have made our lives very convenient indeed, which as with any convenience has a flip side to the coin. Mobile devices are a huge security risk and come with a long list of associated security threats ranging from data leakage through mobile apps, using unsecured WiFi to targeted phishing and other attacks. Mobile phones have been the most frequently deployed espionage devices since the mid-80’s, when they were commercially first introduced.
To the bad actor on a trading floor, all this makes smartphones the perfect tool of the trade – discreet, powerful and openly hiding in plain sight. Financial firms spend millions each year on protecting information by securing emails, conversations and information access. In comparison, securing personal mobile devices and the communications space in which they operate is largely ignored.
Mobile device security by far exceeds all the risks from ecomms, work phones, chat-rooms and emails combined, yet no meaningful controls are applied by a majority of financial firms in the personal communications space. Unfortunately, this drives a trading floor culture where it is acceptable to share some form of MNPI in an unmonitored manner using personal devices. This catch-22 situation is further exacerbated by the regulators’ inactivity in the personal communications space which has led the market to develop a position that something will be done only if there is an incident followed by a regulatory enforcement.
The stark reality of this situation is that largely due to the pandemic, an increasing number of financial firms are allowing powerful personal smartphones back into their restricted areas, and with the ‘silent backing’ of the regulators, do virtually nothing to address the associated mobile security risks beyond soft policies. Without appropriate controls, the banks and regulators really have no visibility and therefore no idea of personal device usage and MNPI abuse on their trading floors, and the current ‘status quo’ that has lasted for over 10 years is perhaps not surprising.
The increasing power of our smartphones should really have ‘the Matrix effect’ and remind the firms and regulators just how vulnerable their organisations and markets are without proper tech controls. It’s high-time for the banks to ‘get some eyes’ by taking ‘the red pill’ and start visualising the wireless mobile traffic on their trading floors, thereby ending the era of blissful ignorance.