British banks target Israeli security technology

British banks are working with former Israeli military cyber security specialists to secure the banking infrastructure against cyber attacks, as London seeks to boost its position as a global financial centre in the run up to Brexit, according to a British-Israeli research organisation.

Israeli cyber security companies are providing security expertise to at least three of the top four UK banks, according to the report by the British Israel Communications and Research Centre (Bicom), which conducts research into Israel and the Middle East.

The introduction of European Union (EU) regulations requiring authentication of digital financial transactions – known as the European Revised Payment Service Directive – has led to closer cooperation between companies in the UK and Israeli firms that specialise in biometric and other forms of authentication, Bicom claims.

HSBC opened a cyber hub in Tel Aviv last year. Barclays and Royal Bank of Scotland have also set up research and development (R&D) centres in the country to tap into Israeli technology, including cyber security, biometric authentication, data analytics and payment technology.

Last year, Aviva Insurance, BT, Goldman Sachs, RBS, Visa and others hosted Israeli cyber security startups for a series of events in London.

“As London looks to bolster its position as the world’s global financial centre in the build up to Brexit, we expect this partnership to deepen and expand with more Israeli cyber security companies working in London, and we expect more British financial services companies to establish research and innovation centres in Israel,” said James Sorene, CEO of Bicom.

There are close links between Israel’s cyber security companies and the Israeli Defence Force (IDF). The majority of firms are employing graduates from Israel’s signals intelligence organisation, Unit 8200, which has expertise in protecting cyber infrastructure against attacks from state-sponsored hackers.

According to Bicom, the British and Israeli governments have collaborated closely on cyber security since signing a memorandum of understanding in 2014. This includes academic research on cyber and physical security, and sharing of threat information between computer emergency response teams (Certs) in both countries.

Israel claims to have the largest concentration of cyber security companies. The numbers have grown from 148 in 2011 to 420 at the end of 2017. Half are startup companies established in the past five years, while several are traded on the NASDAQ stock exchange, including Cyren, Checkpoint, Forescout and Varonis.

Some 32 Israeli high-tech companies have set up operations in the UK following the Brexit referendum, bringing the total 337. They have invested £152m and created more than 800 jobs, the report said.

The CEO of of the UK’s National Cyber Security Centre – a branch of GCHQ – Ciaran Martin, has held bilateral meetings with Eviatar Matania, head of the National Cyber Bureau in the Prime Minister’s office of Israel, to discuss technological collaboration, policy and managing responses to cyber security incidents.

The NCSC has built links with the cyber security industry in Be’er Seva in Southern Israel, home to an Advanced Technology Park with more than 70 startups and a campus of Ben Gurion University, which runs a cyber security research centre.

The Israeli Defence Force is building a two million square foot telecommunications research centre next to the park, which also houses Israel’s Cert.

The Israeli Export Institute has identified the UK as a primary export target for Israeli companies. However, cyber security experts in both countries are divided over the impact of Brexit, with some Israeli companies choosing to prioritise the US over the UK.

The number of UK companies that have R&D operations in Israel is relatively small compared with Canada, China and the US, according to the report. One exception is the chip company, ARM, which has an R&D centre employing more than 200 engineers.

Other UK companies to have set up R&D centres in the country include Johnson Matthey, financial technology company ShareGain, and technology company Spirent.