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Summary
- Bank of England Governor Andrew Bailey has said that he wants legal requirements in place for internet firms to remove financial fraud websites.
- In the past, Google had blamed that poor guidance from regulators was the main problem in implementing fraud-related rules.
- Avast Plc and GB Group in focus as the need for cyber security rises exponentially.
Citing cyber frauds and complications around it, Governor of Bank of England Andrew Bailey has asked the UK government to bring in legal requirements for internet firms such as Google to tackle financial fraud websites. Bailey has called for new measures to be added in the Online Harms Bill to contain financial crime, as per a report in the Sunday Times The legislation would be put before the parliament later this year. A BoE spokeswoman said that Bailey had mentioned several times that the Online Harms Bill should cover financial services.
The bill
British communications regulator Ofcom would be officially regulating the Online Harms Bill. The Boris Johnson government would give Ofcom the power to fine internet firms up to 10 per cent of their turnover for any failures over effectively handling illegal posts or harmful content. Issues like online child grooming, terrorism are already under the purview of the bill. But now Bailey is insisting that financial fraud, which has seen an uptick during the pandemic, should be included.
In the past, Google had said that poor guidance from regulators is the main hurdle in implementing fraud-related rules. The internet company has always taken down scam websites when notified.
The shares of Alphabet Inc. (NASDAQ: GOOGL), the parent company of Goggle, had gained 5.62 per cent on 19 March to close at US $2026.96.
Rising online fraud
Online fraud has surged in Britain since the coronavirus pandemic struck the nation last year. Latest data from Action Fraud, the national reporting agency, suggests that a whopping of £78 million has been lost on fake investment websites during 2020. Such websites offer fake schemes on account of get-rich-quick schemes and dupes of reputed websites etc. Search engine Companies like Google make profit from these fraudsters which pay for top spots in search results.
With a jump in the number of online financial frauds, the need for cyber security has also been rising exponentially. Now, let us glance through two cyber security companies – Avast Plc and GB Group Plc.
Avast Plc (LON:AVST)
FTSE 100-listed company Avast Plc, which has a market capitalisation of £4.9 billion, provides privacy and digital security products that protect from internet threats. It uses an advanced threat detection network that uses artificial intelligence technologies and machine learning.
The company’s adjusted profit before tax increased to US$436.7 million for the financial year ending 31 December 2020, up from US $400.1 million in the previous year. It declared a total dividend of 16 US cents per share for last year, up 8.8 per cent from 2019. The company expects to deliver an organic revenue growth between 6 and 8 per cent during FY 2021.
Avast’s shares (LON: AVST) were trading at GBX 475.80 per share on the London Stock Exchange on 22 March 2021 (9:51 AM GMT+1), down 0.04 per cent from the previous day’s close value.
GB Group (LON:GBG)
GB Group Plc, which has a market capitalisation of £1.7 billion, is a global technology company specialising in identity data intelligence, listed on the Alternative Investment Market (AIM) on the LSE. The company’s patented technology has been used by the likes of IBM, Lyft, and Santander in fighting against cyber fraud.
According to the company’s latest trading update, the revenue for the financial year ending 31 March 2021 is expected to be at least £213 million with a profit of more than £53 million.
The company shares (LON:GBG) were trading at GBX 838.00 per share on the London Stock Exchange on 22 March 2021 (9:51 AM GMT+1), down 0.83 per cent from the previous day’s close value.
