Silicon Valley-based Menlo Security is entering the Australian market, targeting high-risk clients in the banking and financial services industry.
The cybersecurity company will open offices in Sydney and Melbourne with a starting presence of five full-time employees, led by former Symantec and Linksys executive Stephanie Boo, the firm’s Asia-Pacific managing director.
The Australian launch comes as part of a global expansion funded partly by a $110 million Series D capital raise, which was led by JPMorgan Asset Management and included allocations from JPMorgan Chase, HSBC and American Express Ventures.
Menlo Security chief executive Amir Ben-Efraim told The Australian Financial Review that the financial services industry faces heightened risks of cyber attack.
“Our technology is a proven security platform used by some of the largest banks in the world,” he said. “The largest Australian banks are global, and they face many of the same issues as Menlo’s existing customers.”
Mr Ben-Efraim said he has landed a contract with an undisclosed “major bank” in Australia pre-launch, and JPMorgan in Sydney and Melbourne is using its technology.
While many financial institutions are investing heavily in security efforts, Mr Ben-Efraim said they’re largely going about it the wrong way.
“Most banks around the world have invested heavily in prevention and detection,” he said. “The problem is that the average time to detect a breach is six months. In six months they could have lost millions of credit card numbers.”
Instead, Menlo’s technology takes a different approach to battling phishing and ransomware threats, by allowing corporate customers to disconnect from the internet completely.
The technology disconnects and isolates company networks from the public web, while providing cloud-based access to all the information on the internet. Menlo claims its solution is “100 per cent effective”.
“The best way not to be attacked is to disconnect,” Mr Ben-Efraim said. “The problem is that the internet has become a critical part of modern society. So you need a method to still realise the benefits of the internet without being connected to it.”
‘Australia is not immune’
Menlo’s entry into the Australian market comes as watchdogs including the Australian Prudential Regulation Authority have chastised banks and financial services companies for not taking cyber risks seriously enough.
In its corporate plan released in August, APRA said boards and company directors specifically need to take responsibility for the burgeoning online threat.
“Cyber attacks are increasing in frequency, sophistication and impact globally. Australia is not immune to this,” the corporate plan stated.
“Capabilities across APRA’s regulated institutions, and their key service providers, are variable with a range of cyber exposures and preparedness observed.
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The Australian Cyber Security Centre, a federal government agency, recommends that organisations adopt the “highly effective” strategies of network segmentation and segregation.
Mr Ben-Efraim claims Menlo’s technology complies with this Australian government edict, and said banks around the world are being pressured by regulators and consumers to take this approach.
“Large banks literally have billions to lose, and they know that cybercriminals are working tirelessly to attack them,” he said.
“Strong and effective cybersecurity is becoming synonymous with stability in our financial services industries.”
In addition to Ms Boo, Menlo hired Keith Symons, a former Oracle business development manager, in May. Mr Symons will lead the Australia and New Zealand sales team from Melbourne, with a focus on clients in banking and the defence and intelligence industry.