According to the Crime Survey of England and Wales there were 5.1m online fraud incidents and 2.5m cybercrime offences in the past 12 months.
It’s in response to the rapid growth of cybercrime that Alastair Paterson and James Chappell founded Digital Shadows – a small but fast-growing cyber security company with a very different approach to cyber security.
different approach to cyber security. The two were working for a security company that is now part of BAE Systems when they began to realise that the industry was changing rapidly – and those in charge of cyber security were all too often behind the curve. Companies concentrated too much on guarding the “perimeter”, for example through the use of firewalls and were hoping that information wouldn’t leak or get hacked when the reality was that the threat had already become more complicated and pernicious than first realised.
It was partly because employees were sharing more information than they should have been on social media such as Facebook and Twitter. As they were using their own devices at work it was inevitable that information would be leaked. So what should a company do if such a thing happened? Few had any idea.
It was to answer this question that Paterson and Chappell spent months building a solution. Digital Shadows provides what it calls “cyber situational awareness.” This helps organisations protect against cyber-attacks, loss of intellectual property and loss of brand and reputational integrity – an increasingly important consideration for many.
Most organisations leak information online to some extent, the two pointed out. For instance, employees sharing information over insecure social networks or a system being hacked so as to sell the organisation’s data on the underground economy. Digital Shadows helps firms to mitigate and manage that risk via SearchLight – a proprietary data analysis platform that provides a single view of an organisation’s digital footprint and the profile of its attackers.
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The system analyses 100m information sources in 27 languages. This is then complemented with human security analyst expertise from the company’s Canary Wharf office, where it employs native language speakers. The system is designed to eliminate “false positives,” in other words where it might look as if there’s a problem even when there isn’t one, while providing security professionals with only alerts that really matter. By knowing the risks that are out there, firms can take action.
“I’d always worked for someone else but knew that in the right circumstances and with a good idea I’d want to run my own company – especially when I found a vision I believed in,” said Paterson. “Currently, no other company can provide ‘cyber situational awareness.’”
He and Chappell started the company with their own savings and subsequently became part of the FinTech Innovation Lab and set up on the L39 Accelerator. They’ve grown rapidly and earlier in 2015 joined David Cameron and Boris Johnson on trade missions.
“Discussing Digital Shadows with David Cameron before he met Obama felt particularly surreal but it was a great moment for the company,” said Paterson. At about this time he and Chappell also raised $8m in funding and opened an office in San Francisco – which is scaling up quickly as it becomes a transatlantic business.
The biggest challenge has been recruitment. “Finding good data scientists, cyber security professionals and developers specific to our area is tough and we are in competition with a lot of other organisations for the best talent,” he said. “Managing across five time zones with eight hour differences is hard but manageable with the latest remote working tools.”
Digital Shadows are pursuing what they describe as “a high growth strategy but [one that is]sensibly managed”. Paterson said: “The UK and US remain our focus for now, however longer term there is nothing to say we won’t look at other geographies. We already have clients throughout Europe and elsewhere. We may also look at other vertical sectors with a greater focus.
“Although we started off in financial services, we soon saw demand from other sectors, particularly those where guarding intellectual property is a key a focus. For instance, we are now working for a Swiss watch manufacturer, media companies, pharmaceuticals, retail and fashion providers. There is substantial opportunity for developing other vertical sectors and expanding the business that way.”
As cybercrime continues to rise and attackers become ever more sophisticated Digital Shadows has clearly tapped into a growing market.