The Customer Effect

How Citi’s latest cybersecurity bet veers from the usual model

  • Citi Ventures participated in a $12 million investment in Dyadic, a startup that helps companies manage their cryptographic keys
  • The area of cyber defense startups that studies analytics to find patterns is getting crowded, Citi says
close

Email a Friend

How Citi’s latest cybersecurity bet veers from the usual model

Financial technology trends come and go but three are here to stay: Everyone has a mobile phone, large businesses are moving their data to cloud systems — and threats to cybersecurity are evolving with and around both behaviors.

As the threat cybersecurity poses for financial services – or any company, since they’re all collecting customer data – isn’t going away, these companies are heavily invested in analytics firms that monitor breaches, defenses and other activity to try to make sense of user behavior and identify patterns to help prepare for the next attack. That space is getting kind of crowded though, which is part of why Citigroup’s startup venture capital arm just invested in a newer cryptographic solution by a company called Dyadic.

“There are established vendors of hardware security models and systems we all buy from. They’re trying to prevent or detect threats. We’ve invested in that,” said Arvind Purushotham, global head of venture investing at Citi Ventures. “The Dyadic opportunity came along and was fairly unique, there are not 10 startups in their area.”

Dyadic is a software company that helps companies manage their cryptographic keys, a long string of numbers required to encrypt private information. Citi Ventures participated in a $12 million growth investment in Dyadic along with Goldman Sachs Principal Strategic Investments and Eric Schmidt’s Innovation Endeavors.

In many current systems, there is a key to encrypt and one to decrypt. Dyadic’s solution effectively splits each key into two and allows them to be stored in different places – one half on a company server and the other on a mobile phone, for example, or one half in the cloud and the other in a data center. This way, even if a hacker somehow obtained the part of the key stored in the cloud, it couldn’t use it to decrypt information without finding its pair. The solution isn’t completely unhackable, but it creates an additional challenge for nogoodniks.

The technology is also easy to implement at the types of large financial institutions that would benefit from the product, he added, which counts for a lot when deciding to invest in a company. It’s rarely ever about how innovative an idea is. Most companies using Dyadic’s solution probably already employ cloud storage and have an increasingly large mobile customer base.

“[Dyadic] plays to the trends of cloud, mobile and enables us to make mobile offerings even more powerful not just at Citi but at any enterprise,” Purushotham said. “It is lowering the complexity and cost of a cryptographic system and if you can make it cheaper and easier to use, enterprises will use it more, and more commerce can happen online more securely.”

However, defending a bank and its customers against cyberattacks is as much – if not more – about how companies identify and verify their customers when asking them to hand over sensitive information as it is about identifying the attackers. Many websites now require numbers, capital letters and special characters of their users’ passwords, in order to make their accounts harder to breach. Some have employed fingerprint authentication and let customers store credit card information so they neither have to enter their credit card information or their password.

But financial services is one of the most highly regulated industries, and it has many reasons for requesting certain sensitive information. Some are business-related, but many come back to regulatory compliance.

“Security is sort of a murky problem,” Purushotham said. “We need to collect what we need to collect for a variety of reasons but it’s also our job to ensure the data stays secure inside the enterprise and make it simple for customers to use our services while still making it secure.”

0 comments on “How Citi’s latest cybersecurity bet veers from the usual model”

The Customer Effect

Who led banking app downloads in 2021?

  • Challenger bank Chime led the banking app download charts, ahead of established brick-and-mortar banks like Chase and Bank of America.
  • The top three crypto apps totaled 145 million downloads in 2021, up significantly from 18 million in 2020.
Subboh Jaffery | January 14, 2022
Sponsored, The Customer Effect

The increasing role of personalization in retail wealth management

  • In a recent survey by ThoughtLab and Publicis Sapient, 49% of investors put simple, intuitive digital experience as top priority – but only 18% are very satisfied with their current advisor’s digital experience.
  • With 44% of respondents planning to move their funds over the next 2 years, better personalization has never been more important.
Publicis Sapient | January 06, 2022
The Customer Effect

With only 5% of Americans confident in their financial health, what are their generational resolutions for 2022?

  • A survey found only 5% of Americans see their financial health as ‘rock-solid’. One in four describe it as out-of-shape, while almost half call it a work in progress.
  • With 59% wanting to focus on increasing their savings, it is the most popular financial resolution among Americans for 2022.
Subboh Jaffery | December 29, 2021
Modern Marketing, The Customer Effect

Gens under the lens: The Gen Z consumer

  • Generation Z, also known as Zoomers, represents individuals born between 1997 and 2012, following Millennials.
  • They grew up with the internet, computers and smartphones, are tech-savvy and all about digital finance.
Iulia Ciutina | December 16, 2021
Modern Marketing, The Customer Effect

Gens under the lens: The Millennial consumer

  • With 72 million people, the millennial generation is the biggest in the history of the U.S., and also the most racially diverse. Growing up with high student loans, and to a high inflation economy, their unique needs will guide financial innovation of today and tomorrow.
  • The U.S. is set to go through the largest inter-generational transfer of wealth in history, with $30 trillion set to change hands over the next few decades, and millennials will be at the receiving end of it.
Subboh Jaffery | December 15, 2021
More Articles