China's battle for mobile security

The current readiness to deal with mobile-accessed internet-related security threats is low, but things are beginning to happen

Mohammad Chowdhury
Published: 05, Jul 2016

Mohammad Chowdhury is PwC's Telecom, Media and Technology consulting leader across Australia, SE Asia and New Zealand. Until recently he built the practice in India where he became one of the most quoted industry experts in the country. Mohammad has served as an adviser to telecom sector reform in Saudi Arabia, Zimbabwe, Ethiopia, Slovakia, Poland and Slovenia and during 2015 as national telecommunications adviser to the Government of Myanmar. Previously in his career he has conducted significant strategic roles at Vodafone and IBM. He is quoted regularly by the Financial Times, Wall Street Journal, BBC, CNBC, TV-18 and NDTV. Mohammad has worked in 83 countries, lived in 7 and speaks 6 languages. He has a BA in Politics, Philosophy and Economics from Oxford University, an MPhil in Economics from Cambridge University, and strategy training from Harvard Business School. He was born in London, has family origins in Bangladesh, and is married with two sons.

Mobile is the primary channel for internet access and internet-based transactions in China, and for this reason the challenge of mobile security is becoming a priority for individuals, enterprises and government ( Photo: Shutterstock)
Mobile is the primary channel for internet access and internet-based transactions in China, and for this reason the challenge of mobile security is becoming a priority for individuals, enterprises and government ( Photo: Shutterstock)

The pervasiveness of the internet in China surpasses that of any other country on earth. China has 668 million internet users, more than anybody else by a long way. But it isn’t just a numbers game in China; it is the propensity of internet users to use the access to the net to do stuff that is compelling in China:

  • Some 80 percent of retail customers use their mobiles while shopping to check for deals and alternative options online: The phenomenon that is referred to as “O2O” or online to offline
  • WeChat eCommerce customers in China average 50 transactions per month online, compared to 25 transactions per month for US debit card users
  • The 450 million customers who use Alipay, China’s leading online payments service provider, between them transacted, saved and transferred over $1 trillion in value in 2015
  • Internet advertising by value in China surpassed TV advertising value in 2014, and this year is forecast to surpass 50 percent of all advertising revenue
  • Of the top seven retailers in the US, the highest ranked pure-play ecommerce firm is Amazon, at number five; whereas in China, the top two retailers nationwide are pure-play ecommerce, Alibaba and JD.com

Mobile is the primary channel for internet access and internet-based transactions in China, and for this reason, the challenge of mobile security is becoming a priority for individuals, enterprises and government. Mobile devices are highly personalised, used almost 24x7, very accessible, contain multiple sensors, carry data which provide individual context, are frequently used on publicly accessible networks (example, unsecured Wi-Fi hotspots), and many are used as BYOD (bring your own device) at work. On top of that, China is forecast to have over 5 billion Internet of Things (ioT) devices by 2020.

So while the demand for mobile-accessed internet is high in China, the security risks associated with it mean that the readiness to use the internet safely is low. Globally, the threat levels from security breaches are escalating. According to PwC’s latest Global State of Information Security Survey, during 2015 we saw:

  • 25 percent increase in the compromise of customer records online from the previous year
  • 45 percent increase in detected security incidents from the previous year
  • 45 percent escalation in the value of financial losses from security breaches

When Talk Talk, a UK mobile service provider, had a customer data breach in late 2015, within a few days of disruption, the operator saw 157,000 customer records hacked, 28,000 customers’ credit or debit card details compromised, around an GBP 80 million loss from the hack, and a stock price fall in the same week of 7 percent.

What I saw at Mobile World Congress in China this week http://www.mwcshanghai.com/speaker/mohammad-chowdhury/) is that whilst the current readiness to deal with the threats is still low, things are beginning to happen.  The Government has published the first draft of an eCommerce law, companies are beginning to think seriously about cyber security, security-based frameworks and threat assessments.  A number of security firms and consultancies are coming up who are skilled at the identifying and handling the latest hacking and threat issues, and in driving awareness.

Given China’s love affair with the internet and the quiet determination of both public and private sectors to harness the growth of the internet and keep the growth sustainable, there is no doubt that China will get on top of mobile security, though we may expect some hiccoughs along the way.  Other countries in developing Asia, especially India, Bangladesh, Vietnam, Indonesia and Myanmar need to take note: this is a challenge that is coming to mobile screens in these countries soon.

Sources: Mary Meeker’s Global Internet Trends 2016; PwC Global State of Information Security Survey, 2016

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