A backdoor is a typically covert method of bypassing normal authentication or encryption in a computer, product, embedded device (e.g. a home router), or its embodiment (e.g. part of a cryptosystem, algorithm, chipset, or even a "homunculus computer"—a tiny computer-within-a-computer such as that found in Intel's AMT technology). Backdoors are most often used for securing remote access to a computer, or obtaining access to plaintext in cryptosystems. From there it may be used to gain access to privileged information like passwords, corrupt or delete data on hard drives, or transfer information within compromised networks. In the United States, the 1994 Communications Assistance for Law Enforcement Act forces internet providers to provide backdoors for government authorities. In 2024, the U.S. government realized that China had been tapping communications in the U.S. using that infrastructure for months, or perhaps longer; China recorded presidential candidate campaign office phone calls—including employees of the then-vice president of the nation, and of the candidates themselves. A backdoor may take the form of a hidden part of a program, a separate program (e.g. Back Orifice may subvert the system through a rootkit), code in the firmware of the hardware, or parts of an operating system such as Windows, for example, device drivers. Trojan horses can be used to create vulnerabilities in a device. A Trojan horse may appear to be an entirely legitimate program, but when executed, it triggers an activity that may install a backdoor. Although some are secretly installed, other backdoors are deliberate and widely known. These kinds of backdoors have "legitimate" uses such as providing the manufacturer with a way to restore user passwords. Many systems that store information within the cloud fail to create accurate security measures. If many systems are connected within the cloud, hackers can gain access to all other platforms through the most vulnerable system. Default passwords (or other default credentials) can function as backdoors if they are not changed by the user. Some debugging features can also act as backdoors if they are not removed in the release version. In 1993, the United States government attempted to deploy an encryption system, the Clipper chip, with an explicit backdoor for law enforcement and national security access. The chip was unsuccessful. Recent proposals to counter backdoors include creating a database of backdoors' triggers and then using neural networks to detect them. == Overview == The threat of backdoors surfaced when multiuser and networked operating systems became widely adopted. Petersen and Turn discussed computer subversion in a paper published in the proceedings of the 1967 AFIPS Conference. They noted a class of active infiltration attacks that use "trapdoor" entry points into the system to bypass security facilities and permit direct access to data. The use of the word trapdoor here clearly coincides with more recent definitions of a backdoor. However, since the advent of public key cryptography the term trapdoor has acquired a different meaning (see: Trapdoor function), and thus the term "backdoor" is now preferred, only after the term trapdoor went out of use. More generally, such security breaches were discussed at length in a RAND Corporation task force report published under DARPA sponsorship by J.P. Anderson and D.J. Edwards in 1970. While initially targeting the computer vision domain, backdoor attacks have expanded to encompass various other domains, including text, audio, ML-based computer-aided design, and ML-based wireless signal classification. Additionally, vulnerabilities in backdoors have been demonstrated in deep generative models, reinforcement learning (e.g., AI GO), and deep graph models. These broad-ranging potential risks have prompted concerns from national security agencies regarding their potentially disastrous consequences. A backdoor in a login system might take the form of a hard coded user and password combination which gives access to the system. An example of this sort of backdoor was used as a plot device in the 1983 film WarGames, in which the architect of the "WOPR" computer system had inserted a hardcoded password-less account which gave the user access to the system, and to undocumented parts of the system (in particular, a video game-like simulation mode and direct interaction with the artificial intelligence). Although the number of backdoors in systems using proprietary software (software whose source code is not publicly available) is not widely credited, they are nevertheless frequently exposed. Programmers have even succeeded in secretly installing large amounts of benign code as Easter eggs in programs, although such cases may involve official forbearance, if not actual permission. == Examples == === Worms === Many computer worms, such as Sobig and Mydoom, install a backdoor on the affected computer (generally a PC on broadband running Microsoft Windows and Microsoft Outlook). Such backdoors appear to be installed so that spammers can send junk e-mail from the infected machines. Others, such as the Sony/BMG rootkit, placed secretly on millions of music CDs through late 2005, are intended as DRM measures—and, in that case, as data-gathering agents, since both surreptitious programs they installed routinely contacted central servers. A sophisticated attempt to plant a backdoor in the Linux kernel, exposed in November 2003, added a small and subtle code change by subverting the revision control system. In this case, a two-line change appeared to check root access permissions of a caller to the sys_wait4 function, but because it used assignment = instead of equality checking ==, it actually granted permissions to the system. This difference is easily overlooked, and could even be interpreted as an accidental typographical error, rather than an intentional attack. In January 2014, a backdoor was discovered in certain Samsung Android products, like the Galaxy devices. The Samsung proprietary Android versions are fitted with a backdoor that provides remote access to the data stored on the device. In particular, the Samsung Android software that is in charge of handling the communications with the modem, using the Samsung IPC protocol, implements a class of requests known as remote file server (RFS) commands, that allows the backdoor operator to perform via modem remote I/O operations on the device hard disk or other storage. As the modem is running Samsung proprietary Android software, it is likely that it offers over-the-air remote control that could then be used to issue the RFS commands and thus to access the file system on the device. === Object code backdoors === Harder to detect backdoors involve modifying object code, rather than source code—object code is much harder to inspect, as it is designed to be machine-readable, not human-readable. These backdoors can be inserted either directly in the on-disk object code, or inserted at some point during compilation, assembly linking, or loading—in the latter case the backdoor never appears on disk, only in memory. Object code backdoors are difficult to detect by inspection of the object code, but are easily detected by simply checking for changes (differences), notably in length or in checksum, and in some cases can be detected or analyzed by disassembling the object code. Further, object code backdoors can be removed (assuming source code is available) by simply recompiling from source on a trusted system. Thus for such backdoors to avoid detection, all extant copies of a binary must be subverted, and any validation checksums must also be compromised, and source must be unavailable, to prevent recompilation. Alternatively, these other tools (length checks, diff, checksumming, disassemblers) can themselves be compromised to conceal the backdoor, for example detecting that the subverted binary is being checksummed and returning the expected value, not the actual value. To conceal these further subversions, the tools must also conceal the changes in themselves—for example, a subverted checksummer must also detect if it is checksumming itself (or other subverted tools) and return false values. This leads to extensive changes in the system and tools being needed to conceal a single change. As object code can be regenerated by recompiling (reassembling, relinking) the original source code, making a persistent object code backdoor (without modifying source code) requires subverting the compiler itself—so that when it detects that it is compiling the program under attack it inserts the backdoor—or alternatively the assembler, linker, or loader. As this requires subverting the compiler, this in turn can be fixed by recompiling the compiler, removing the backdoor insertion code. This defense can in turn be subverted by putting a source meta-backdoor in the compiler, so that when it detects that it is compiling itself
CatDV
CatDV is a media asset manager program for handling multimedia production workflows developed by Square Box Systems. Quantum Corporation acquired Square Box Systems in 2020. == Versions == The full family of CatDV Products is as follows: CatDV Standalone Products CatDV Professional Edition CatDV Pegasus CatDV Networked Products CatDV Essential - entry level server product CatDV Enterprise Server - for MySQL databases and most common server platforms including Linux, Windows and Mac OS X CatDV Pegasus Server - adds features such as high performance full-text indexing, access control lists, and more CatDV Worker Node - automated workflow and transcoding engine CatDV Web Client - provides access to the CatDV database via a web browser. There is no need to install special software on the desktop, making it easy to deploy to a large number of users. CatDV Professional Edition & Pegasus Clients - designed to support the multi-user capabilities of the CatDV Enterprise and Workgroup Servers from the desktop Using plugins and scripting, which often require additional professional services support to set up, complex integrations with a wide variety of third party systems (including archive, cloud storage, and artificial intelligence) are possible. == Awards == CatDV won two awards in 2010, a blue ribbon from Creative COW Magazine and a "Best of Show Vidy Award" from Videography. In April 2012 Square Box won a Queen's Award for Enterprise for CatDV.
Sharenting
"Sharenting" is a portmanteau of "sharing" and "parenting", describing the practice of parents publicizing a large amount of potentially sensitive content about their children on internet platforms, most notably on social media. While the term was coined as recently as 2010, sharenting has become an international phenomenon with widespread presence in the United States, Spain, France, and the United Kingdom. Proponents of sharenting frame the practice as a natural expression of parental pride in their children and argue that critics take sharenting-related posts out of context. Detractors find that it violates child privacy and hurts a parent–child relationship. Academic research has been conducted over the potential social motivations for sharenting and legal frameworks to balance child privacy with this parental practice. Researchers have conducted several psychological surveys, outlining social media accessibility, parental self-identification with children, and social pressure as potential causes for sharenting. Legal scholars have identified international human rights laws, labor protections, and recent online child privacy statutes as potential legal standards to check sharenting abuses. == History == The origins of the term "sharenting" have been attributed to the Wall Street Journal, where they called it "oversharenting," a portmanteau of "oversharing" and "parenting." Priya Kumar suggests that recording life moments of children rearing is not a new practice: people have been using diaries, scrapbooks and baby log books as the media of documentation for centuries. Scholars assert that sharenting has become popular as a result of social media, which has made many people more comfortable with sharing their lives and those of their children online. The trend of oversharing on social media has raised public attention in the 2010s and become the focus of a number of editorials and academic research projects. It was also added to Times Word of the Day in February 2013 and Collins English Dictionary in 2016 given its influence. == Popularity == Several studies describe sharenting as an international phenomenon with widespread prevalence across households. In the United States, researchers at the University of Michigan C.S. Mott Children's Hospital found that almost 75% of American parents were familiar with someone who over-shared information about their child on social media, and an AVG survey determined that 92% of all American two-year-olds had some presence on the internet. In Australia, Fisher-Price conducted a survey which revealed that 90% of Australian parents admitted to over-sharing. In Spain and Czech Republic, a survey of approximately 1,500 parents found that 70-80% participated in sharenting. In the United Kingdom, France, Germany, and Italy, a Research Now report revealed that almost three-quarters of surveyed parents said that they were "willing to share images of their infants". Some claim that sharenting presents a violation of child privacy, and this backlash includes anti-sharenting sites and apps that block baby pictures. One particular outlet of protest was the blog STFU Parents, founded in 2009 to criticize parental oversharing on social media. Some parents felt that these criticisms of sharenting often took posts out of context and neglected some positive aspects of the practice, including advancing a stronger sense of online community. Others, while acknowledging the potential privacy violations of sharenting, suggested a more tailored approach that would only permit posting under certain conditions, notwithstanding audience and identification restrictions for social media posts. == Motivations == Research has suggested that sharenting is associated with a mix of parent self-identification with children, mothering pressures, and the accessibility of social media. Conducting 17 interviews with mothers in the United Kingdom, a London School of Economics study found that parent bloggers often re-explained their sharing practices in terms of expressing their own personal identity, representing their own child as part of themselves. In particular, the report surveyed the use of blogs as a networking vehicle to connect parents with similar family situations and found that sharenting parents, by filtering self-presentation through their parent-child relationship, adopted a more relational identity on social media websites. This included identifying oneself in terms of parental circumstances, whether it be raising a child with a disability or being a single mother. Alternatively, some have suggested that these online expressions indicate the infiltration of individual pride into the sphere of parenting, as family photography becomes a means to "show off" one's children to the others and strengthens a parent's sense of individuated self. Addressing the prevalence of mothers engaging in sharenting, those who purport this view argue that the rise of digital communication has pressured mothers into performing the role of a "good" parent on social media platforms. They claim that these developments may reinforce a dominant vision of a "normal" family, as sharenting posts could be motivated by the need to converge to a normative interpretation of family. == Controversy == While some people assert that online platforms enable parents to establish a community and seek parenting support, others are concerned about the children's data privacy and their lack of informed consent. Sharing content may not only embarrass children but also creates an initial digital footprint, a history of online activity, that the children themselves have no control over. This might bring some negative consequences, such as being ridiculed at school or leaving a negative impression on future employers. === Parental benefits === Many parents use social media to seek parenting advice and share information about their children. With the convenience of online platforms, parent bloggers can easily connect with other people in similar situations as well as those who are willing to contribute meaningful advice. By forming a community, parents can receive encouragement from empathetic peers and assistance from experts in children rearing. Parents whose children need special educational accommodations or have disabilities often found themselves detached from the mainstream parenting style. Therefore, they regard online blogs as a means to gain support from others and support back. Online blogging enables parents of children with disabilities and special needs to connect with other parents. The advice from similarly situated families can open up new possibilities that help the parents "negotiate the complexities of social services, health care, and schools". However, in some cases, posting online about a parent's struggles can cause a backlash, as advocates may accuse the parent of presenting people with that condition in a bad light, or wonder how the child will feel, if they later read these posts and see how much their parents struggled to care for them. Such advantages of social media are not limited to particular groups of parents. In general, most parents benefit from exchanging parenting experience. Statistically speaking, 72% of parents rate social media useful for emotional connection and affirmations, and 74% of them receive support about parenting from friends on social media. Sharenting also plays a role in fostering interpersonal relationships. As the images and words about children's lives initiate conversations, parents use sharenting to stay connected with distant friends and relatives. In particular, mothers, as a research study reveals, are willing to engage in sharenting since they believe that the positive contents can help avoid digital conflicts and maintain close relations with those in their social circles. Researchers also found that female participants in this study carefully chose photos and phrases to express love and present laudable behaviors of children in their updates, which indicates their intention to convey positive messages. These messages also promote a close social network for a child as the parents invites supportive family members and friends into daily life. === Children's privacy === Given the potential misuse of digital data, people are critical about sharenting, and the majority of parents are cautious about the wrongdoing with online posts. The disclosure of minors' personal information, such as geographic location, name, date of birth, pictures, and the schools they attend, might expose them to illegal practices by recipients with malicious intentions. Sharented information is often abused for "identity theft", when imposters manage to track, stalk, commit fraud against children, or even blackmail the family. According to Barclays, online fraud targeting the young generation will contribute to a loss of £670 million (approximately $790 million) by 2030, and two-thirds of identity fraud will be related to s
Serge Belamant
Serge Belamant (born 1953) is a French-born South African entrepreneur best known for designing the Universal Electronic Payment System (UEPS) and the Chip Offline Pre-authorised Card (COPAC). He founded the cash-payments company Net1 UEPS Technologies in 1989, led it through dual listings on the NASDAQ and the Johannesburg Stock Exchange, and oversaw the contentious welfare-payments contract with the South African Social Security Agency (SASSA) until his retirement in 2017. Since 2018 he has been non-executive chair of London-based buy-now-pay-later fintech Zilch. == Early life and education == Belamant moved from France to South Africa with his family in 1967 and matriculated from Highlands North Boys' High School, Johannesburg. In 1972 he entered the University of the Witwatersrand to study civil engineering but switched to computer science and applied mathematics in his second year. He left the university without a degree and later took short courses in information systems at the University of South Africa (UNISA). == Early career and SASWITCH (1981–1989) == Belamant worked for Control Data Corporation as a systems analyst for a decade before joining SASWITCH Ltd in 1985. Economic sanctions had left the consortium's national ATM network dependent on unsupported Christian Rovsing computers. Belamant led a rebuild on fault-tolerant Stratus hardware and wrote protocol-translation software that allowed fourteen banks to connect without altering their host systems. By 1988 SASWITCH was handling about three million ATM transactions a month, according to the Competition Commission. The switch—now run by BankservAfrica—remains the backbone of South Africa's shared ATM network. == Net1 UEPS Technologies (1989–2017) == === Founding and UEPS === In 1989, Serge Belamant developed the Universal Electronic Payment System (UEPS), enabling secure, real-time transactions even in areas with limited connectivity. In the same year, he founded NET1 UEPS Technologies Inc., serving as its CEO and Director. === COPAC for VISA === In 1995, VISA tasked Belamant with designing the Chip Offline Pre-authorized Card (COPAC), a technology still widely used in chip-enabled credit and debit cards. A year later, he listed his company APLITEC (Applied Technology Holdings Limited) on the Johannesburg Stock Exchange. === Listings and acquisitions === In 1999, Belamant acquired Cash Payment Services (CPS) from First National Bank of South Africa, modernizing its welfare payment system to serve millions in rural areas. In 2005, he led NET1 Technologies to an IPO, listing it as NET1 UEPS Technologies Inc. on the Nasdaq. A secondary listing on the Johannesburg Stock Exchange (JSE) followed in 2008. === SASSA contract === Under Belamant's leadership, NET1 managed welfare payments for the South African Social Security Agency (SASSA), handling payments for over 10 million beneficiaries monthly. Despite criticism over handling the SASSA contract, investigations by the U.S. Department of Justice and the South African Constitutional Court found no wrongdoing. == Zilch (2018–present) == Belamant co-founded London-based "buy-now-pay-later" firm Zilch Technology in 2018 and serves as non-executive chair. Zilch reported £145 million in annual-recurring revenue and 4.5 million customers in January 2025. == Patents == Belamant is listed as inventor on more than a dozen payment-security patents, including: "Funds transfer system" (US RE36,788, 2000) – the basis for UEPS. "Financial transactions with a varying PIN" (WO 2014/037869, 2014).
Hybrid cryptosystem
In cryptography, a hybrid cryptosystem is one which combines the convenience of a public-key cryptosystem with the efficiency of a symmetric-key cryptosystem. Public-key cryptosystems are convenient in that they do not require the sender and receiver to share a common secret in order to communicate securely. However, they often rely on complicated mathematical computations and are thus generally much more inefficient than comparable symmetric-key cryptosystems. In many applications, the high cost of encrypting long messages in a public-key cryptosystem can be prohibitive. This is addressed by hybrid systems by using a combination of both. A hybrid cryptosystem can be constructed using any two separate cryptosystems: a key encapsulation mechanism, which is a public-key cryptosystem a data encapsulation scheme, which is a symmetric-key cryptosystem The hybrid cryptosystem is itself a public-key system, whose public and private keys are the same as in the key encapsulation scheme. Note that for very long messages the bulk of the work in encryption/decryption is done by the more efficient symmetric-key scheme, while the inefficient public-key scheme is used only to encrypt/decrypt a short key value. == Implementations and standards == All practical implementations of public key cryptography today employ a hybrid system. Examples include the TLS protocol and the SSH protocol, that use a public-key mechanism for key exchange (such as Diffie-Hellman) and a symmetric-key mechanism for data encapsulation (such as AES). The OpenPGP file format and the PKCS#7 file format are other examples. Hybrid Public Key Encryption (HPKE, published as RFC 9180) is a modern standard for generic hybrid encryption. HPKE is used within multiple IETF protocols, including Messaging Layer Security (MLS), Oblivious DNS over HTTPS, Oblivious HTTP, Privacy Preserving Measurement, and TLS Encrypted Client Hello. Envelope encryption is an example of a usage of hybrid cryptosystems in cloud computing. In a cloud context, hybrid cryptosystems also enable centralized key management. == Example == To encrypt a message addressed to Alice in a hybrid cryptosystem, Bob does the following: Obtains Alice's public key. Generates a fresh symmetric key for the data encapsulation scheme. Encrypts the message under the data encapsulation scheme, using the symmetric key just generated. Encrypts the symmetric key under the key encapsulation scheme, using Alice's public key. Sends both of these ciphertexts to Alice. To decrypt this hybrid ciphertext, Alice does the following: Uses her private key to decrypt the symmetric key contained in the key encapsulation segment. Uses this symmetric key to decrypt the message contained in the data encapsulation segment. == Security == If both the key encapsulation and data encapsulation schemes in a hybrid cryptosystem are secure against adaptive chosen ciphertext attacks, then the hybrid scheme inherits that property as well. However, it is possible to construct a hybrid scheme secure against adaptive chosen ciphertext attacks even if the key encapsulation has a slightly weakened security definition (though the security of the data encapsulation must be slightly stronger). == Envelope encryption == Envelope encryption is term used for encrypting with a hybrid cryptosystem used by all major cloud service providers, often as part of a centralized key management system in cloud computing. Envelope encryption gives names to the keys used in hybrid encryption: Data Encryption Keys (abbreviated DEK, and used to encrypt data) and Key Encryption Keys (abbreviated KEK, and used to encrypt the DEKs). In a cloud environment, encryption with envelope encryption involves generating a DEK locally, encrypting one's data using the DEK, and then issuing a request to wrap (encrypt) the DEK with a KEK stored in a potentially more secure service. Then, this wrapped DEK and encrypted message constitute a ciphertext for the scheme. To decrypt a ciphertext, the wrapped DEK is unwrapped (decrypted) via a call to a service, and then the unwrapped DEK is used to decrypt the encrypted message. In addition to the normal advantages of a hybrid cryptosystem, using asymmetric encryption for the KEK in a cloud context provides easier key management and separation of roles, but can be slower. In cloud systems, such as Google Cloud Platform and Amazon Web Services, a key management system (KMS) can be available as a service. In some cases, the key management system will store keys in hardware security modules, which are hardware systems that protect keys with hardware features like intrusion resistance. This means that KEKs can also be more secure because they are stored on secure specialized hardware. Envelope encryption makes centralized key management easier because a centralized key management system only needs to store KEKs, which occupy less space, and requests to the KMS only involve sending wrapped and unwrapped DEKs, which use less bandwidth than transmitting entire messages. Since one KEK can be used to encrypt many DEKs, this also allows for less storage space to be used in the KMS. This also allows for centralized auditing and access control at one point of access.
Bright Computing
Bright Computing, Inc. was a developer of software for deploying and managing high-performance (HPC) clusters, Kubernetes clusters, and OpenStack private clouds in on-premises data centers as well as in the public cloud. In 2022, it was acquired by Nvidia. == History == Bright Computing was founded by Matthijs van Leeuwen in 2009, who spun the company out of ClusterVision, which he had co-founded with Alex Ninaber and Arijan Sauer. Alex and Matthijs had worked together at UK’s Compusys, which was one of the first companies to commercially build HPC clusters. They left Compusys in 2002 to start ClusterVision in the Netherlands, after determining there was a growing market for building and managing supercomputer clusters using off-the-shelf hardware components and open source software, tied together with their own customized scripts. ClusterVision also provided delivery and installation support services for HPC clusters at universities and government entities. In 2004, Martijn de Vries joined ClusterVision and began development of cluster management software. The software was made available to customers in 2008, under the name ClusterVisionOS v4. In 2009, Bright Computing was spun out of ClusterVision. ClusterVisionOS was renamed Bright Cluster Manager, and van Leeuwen was named Bright Computing’s CEO. In February 2016, Bright appointed Bill Wagner as chief executive officer. Matthijs van Leeuwen became chief strategy officer, and then left the company and board of directors in 2018. In January 2022 Bright was acquired by Nvidia. Nvidia cited using Bright's Amsterdam facility as a development center. The acquisition occurred after several layoffs under Bill Wagner. == Customers == Early customers included Boeing, Sandia National Laboratories, Virginia Tech, Hewlett Packard, NSA, and Drexel University. Many early customers were introduced through resellers, including SICORP, Cray, Dell, and Advanced HPC. As of 2019, the company had more than 700 customers, including more than fifty Fortune 500 Companies. == Products and services == Bright Cluster Manager for HPC lets customers deploy and manage complete clusters. It provides management for the hardware, the operating system, the HPC software, and users. In 2014, the company announced Bright OpenStack, software to deploy, provision, and manage OpenStack-based private cloud infrastructures. In 2016, Bright started bundling several machine learning frameworks and associated tools and libraries with the product, to make it very easy to get machine learning workload up and running on a Bright cluster. In December 2018, version 8.2 was released, which introduced support for the ARM64 architecture, edge capabilities to build clusters spread out over many different geographical locations, improved workload accounting & reporting features, as well as many improvements to Bright's integration with Kubernetes. Bright Cluster Manager software was frequently sold through original equipment manufacturer (OEM) resellers, including Dell and HPE. In version 10, Bright Cluster Manager was merged into the NVIDIA Base Command Manager. Bright Computing was covered by Software Magazine and Yahoo! Finance, among other publications. == Awards == In 2016, Bright Computing was awarded a €1.5M Horizon 2020 SME Instrument grant from the European Commission. Bright Computing was one of only 33 grant recipients from 960 submitted proposals. In its category only 5 out of 260 grants were awarded. 2015 HPCwire Editor’s Choice Award for “Best HPC Cluster Solution or Technology" Main Software 50 “Highest Growth” award winner, 2013 Deloitte Technology Fast50 “Rising Star 2013” award winner Bio-IT World Conference & Expo ‘13, Boston, MA, winner of “IT Hardware & Infrastructure” category of the “Best of Show Award” program Red Herring Top 100 Global Award, 2013
Social media use in the financial services sector
Social media in the financial services sector refers to the use of social media by the financial services sector to promote and distribute financial services. Social media is used in various aspects of the financial industry including customer service, marketing, and product development. It has enabled financial institutions to extend their reach through direct and real-time communication with customers, fostering more personal connections. It also allows individuals to talk to other individuals creating lending and trading via social groups as well as developing new financial services by fintech startup companies. In terms of marketing, social media is utilized by both traditional financial companies as well as disruptive fintech companies such as peer-to-peer lending (P2P) companies. The financial industry has used information technology since its inception in the 1960s and social media fits in with this ongoing development. Larger, traditional financial firms have integrated social media into their marketing strategies. Companies in the financial sector are subject to strict regulations that include how they use social media. In the United States, the Financial Industry Regulatory Authority (FINRA) is a key regulator that sets rules how financial firms can interact with consumers. This includes ensuring that social media posts follow financial advertising rules, such as being fair and balanced and not providing misleading information, and that financial advice is not provided by unqualified personnel, such as influencers. == History == In 2003, at the beginning of social media development, MySpace was founded as a "social networking service." It allowed people to create a profile, connect with other people, and post videos, pictures, and songs. As MySpace grew in popularity, it attracted interest from companies wishing to promote their brands on the social platform. They were joined by Facebook and in 2010 by Instagram. Financial service firms were initially slow to adapt to promotion via social media but soon joined other big firms after they saw the success other industries had in engaging with younger people. == Uses == === Branding === While companies are able to connect with more people remotely through providing online financial services, their branding strategy has shifted from customized to standardized. Prior to the outbreak of technology, most banks used customized branding where they targeted only customers in their regions. Businesses can now use technology to operate beyond their geographic location and maintain a consistent image across multiple countries with standardized branding. By being able to extend a consistent brand reputation across a wider geographic location, financial services companies can take advantage of economies of scale in advertising cost, lower administrative complexity, lower entry into new markets, and improved cross-border learning within the company. === Customer engagement === Online banking reduced face-to-face interaction between customers and their banks. Most banking transactions can now be conducted online or through mobile devices, rather than at a local branch with a teller. Social media provides a channel for firms to maintain personal contact with customers, replicating some of the interaction that was previously available at local branches. For example, a bank's Facebook page may feature an employee profile describing their job duties, which serves to present a more human face for larger institutions. === Lending === Social media is a core marketing channel for online peer-to-peer lending as well as small business lenders. Since these companies operate exclusively online, it makes sense for them to market online through social media channels. They are able to grow and find new lenders and buyers by utilizing social networks. === Trading === Social trading is an alternative way of analyzing financial data by looking at what other traders are doing and comparing, copying and discussing their techniques and strategies. Prior to the advent of social trading, investors and traders were relying on fundamental or technical analysis to form their investment decisions. Using social trading investors and traders could integrate into their investment decision-process social indicators from trading data-feeds of other traders. Investors also use platform like Reddit, Signal messaging or WeChat to create social communities to discuss investments and finance. In some cases they use this to join together using meme stocks to move financial markets, such as the 2021 GameStop short squeeze incident. They can also use social groups to launch and promote new products such as cryptocurrencies. Investing application like WeBull incorporate a forum style messaging system on each stock that is available for trading. Financial brokers such as Fidelity Investments, Interactive Brokers, and E-Trade have moved to incorporate community features in their investment apps. == Regulations == The use of social media by investors and financial services professionals for business purposes is subject to regulatory oversight, in the United States this is done primarily by the Financial Industry Regulatory Authority (FINRA). FINRA's rules, designed to protect investors from misleading information in all communications and this also applies to social media communications. This includes ensuring that social media posts follow financial advertising rules, such as being fair and balanced and not providing misleading information, and that advice is not provided by unqualified personnel, such as influencers and bank staff acting in a personal capacity. Financial firms have to maintain books and records of all interaction with customers and this includes social media. == New products and services == Social media has created entirely new products for the financial services sector, revolutionizing products and developing new industries through the merging of social technology and financial services. Fintech startups use social media to promote products to get them established. Several developing nations have used social media to leapfrog traditional financial technology; for example, WeChat Pay, which developed from the Chinese WeChat social media platform, became a major payment system in China within a few years. In 2015, according to consulting firm Accenture, 390 million people in China had registered to use mobile banking. This figure is more than the population of the United States. In the United States, the fintech company Venmo combines technology and financial services on a social platform. Other financial technology companies that have used social media to develop or promote financial products include: Lending Club – One of the first peer-to-peer lending businesses OnDeck Capital – A US online-only lending business Funding Circle – A UK-based online lending company Wise – A global online money transfers company Kabbage – A US online unsecured loan company later acquired by American Express Avant – A US online unsecured loan company Zopa – A UK online neobank providing peer-to-peer lending == Risks == === Reputational damage === Due to the real-time nature of social media, financial services companies can be impacted by potential reputational issues. Any negative experience by customers can easily be shared online and could become a viral phenomenon, those comments could likely have a detrimental effect on the company’s stock price and reputation. On the other hand, any positive experience a customer has can also be shared online. However, positive experiences are much less likely to become viral. === Scams === The nature of social media makes it easy to target individuals without being seen by the wider community, this allows scammers to target individuals. Example include romance scams such as the pig butchering scam where an individual is tricked to transfer funds or assets to the scammer over social media making it hard for law enforcement to track them or recover funds. === Customer privacy === Customer privacy is important for the financial services industry. It is critical that customer information such as a bank account numbers and other personal information is kept private. However, this information can be leaked if for example, a customer is unhappy with a bank’s service, they may tweet at the bank expressing their frustrations and include their name and account number.