WEBVTT - China Still Not Collapsing 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.000 Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio. 0:00:19.600 --> 0:00:22.840 And when we're talking about China being the world's second 0:00:23.000 --> 0:00:26.840 largest economy, and also when you're looking at Bloomberg Economics, 0:00:26.960 --> 0:00:30.000 really thinking that when you're thinking at the trajectory of 0:00:30.040 --> 0:00:33.479 its growth not quite holding up as much as obviously 0:00:33.560 --> 0:00:36.200 economists we're anticipating. And then also when you're thinking about 0:00:36.240 --> 0:00:39.120 Tim the liquidity crunch it's going under, when you're thinking 0:00:39.159 --> 0:00:42.680 about some of those property developers and the pressure that 0:00:42.720 --> 0:00:45.599 they have been under so significantly, what this could really 0:00:45.680 --> 0:00:48.279 mean when you're looking at global economic growth and obviously 0:00:48.520 --> 0:00:51.400 the US economy, which has proven to be pretty resilient. 0:00:50.960 --> 0:00:52.760 Here, Yeah, just doing a great job of laying out 0:00:52.800 --> 0:00:54.520 all the challenges when we do look at China, the 0:00:54.600 --> 0:00:57.360 world's second largest economy, to get an idea of where 0:00:57.440 --> 0:00:59.840 China's economy is headed in its effect on global growth. 0:01:00.000 --> 0:01:02.080 I'm very pleased to have with us this afternoon. Leland 0:01:02.120 --> 0:01:05.399 at Miller CEO at China page book International. Leland joining 0:01:05.520 --> 0:01:07.840 us on a zoom from Washington, D C. Leland, How 0:01:07.880 --> 0:01:09.640 are you good? 0:01:09.680 --> 0:01:09.880 Well? 0:01:09.920 --> 0:01:12.480 Thank you well, thanks so much for joining us. You 0:01:12.520 --> 0:01:15.200 might have heard us mentioned earlier this morning that we 0:01:15.240 --> 0:01:19.399 actually saw Bloomberg Economics cut its long term forecast as 0:01:19.440 --> 0:01:22.240 the post COVID rebound has run out of steam. This 0:01:22.360 --> 0:01:25.319 for China, it's pretty remarkable to see this. Just a 0:01:25.319 --> 0:01:27.800 couple of weeks ago, Carol and I we're talking to 0:01:27.840 --> 0:01:29.680 some folks who said, you know what, it's no longer 0:01:29.680 --> 0:01:31.240 a growth story the same way that it has been 0:01:31.319 --> 0:01:33.240 in China for years, and in fact we could see 0:01:33.280 --> 0:01:35.240 higher growth here in the US. That's just not something 0:01:35.240 --> 0:01:37.480 we talked about a few years ago. Where do you fall, Leland? 0:01:39.120 --> 0:01:41.120 Well, it was something we were talking about for the 0:01:41.160 --> 0:01:43.679 past ten years, but you know, nobody really wanted to 0:01:43.680 --> 0:01:45.800 hear about it, because you know, the idea was China 0:01:45.880 --> 0:01:47.480 was growing at eight percent, or they were going at 0:01:47.520 --> 0:01:50.600 close to eight percent, and most people didn't really see 0:01:50.600 --> 0:01:54.640 a reason why the economic magic couldn't continue. The growth 0:01:54.680 --> 0:01:57.120 model had worked up to that point, why couldn't they 0:01:57.160 --> 0:02:00.080 still crank out another twenty years at eight percent? I 0:02:00.080 --> 0:02:02.960 think that was the mindset up until relatively recently when 0:02:03.000 --> 0:02:05.800 people realize that, look, no one in Beijing is an 0:02:05.840 --> 0:02:08.280 economic magician anymore than anywhere else in the world. You know, 0:02:08.280 --> 0:02:10.280 there's subject to the laws of economics. And when they 0:02:10.320 --> 0:02:13.280 have the system that they have, it's it is structurally 0:02:13.280 --> 0:02:15.240 pumped up growth for a while, but there's going to 0:02:15.280 --> 0:02:18.560 be a much more precipitous slowdown on the way down. 0:02:18.639 --> 0:02:20.280 So I think, first of all, we have to be 0:02:20.320 --> 0:02:25.520 ready for very for a future of significant slowdown going forward, 0:02:25.800 --> 0:02:28.720 a structural slowdown. And second, when you're looking at whether 0:02:28.760 --> 0:02:32.200 the United States can pass, whether China can pass the 0:02:32.280 --> 0:02:34.239 United States, or whether it does or not, I think 0:02:34.280 --> 0:02:38.480 that the issue here is that if Chijin pain falls 0:02:38.560 --> 0:02:40.120 victim to the mindset that he has to pass the 0:02:40.160 --> 0:02:42.399 United States, and they do everything that's needed in order 0:02:42.440 --> 0:02:45.320 to pass the United States in GDP growth, then China 0:02:45.320 --> 0:02:47.080 will be going the wrong direction. I think they'll you know, 0:02:47.120 --> 0:02:49.160 Sheijin Ping will be reversing some of the stuff he's 0:02:49.160 --> 0:02:51.560 been doing for the past you know, the past several years. 0:02:51.600 --> 0:02:54.680 It's caused a lot of you know, pressure on the economy, 0:02:54.720 --> 0:02:57.280 but has been towards the idea of getting dead under control. 0:02:57.360 --> 0:02:59.960 So to the extent that China passed the United State, 0:03:00.320 --> 0:03:03.160 which looks unlikely. It's always looked unlikely. But if it 0:03:03.200 --> 0:03:05.400 does happen, it means Chi Jinping is doing the wrong things, 0:03:05.440 --> 0:03:06.160 not the right things. 0:03:06.440 --> 0:03:10.480 Why is it that the post COVID rebound just didn't hold. 0:03:13.080 --> 0:03:16.079 That's a great question. I mean, you know, we were 0:03:16.280 --> 0:03:20.000 very cautious, particularly early in the year, saying, look, there's 0:03:20.000 --> 0:03:21.720 a lot that China has to get over. You have 0:03:21.760 --> 0:03:24.400 to break down the COVID zero administrative state. You know, 0:03:24.440 --> 0:03:27.720 businesses have been frozen in place for a year now. 0:03:28.240 --> 0:03:30.560 But even we were surprised at how tepid the recovery 0:03:30.680 --> 0:03:32.880 was in the second quarter. I think it all comes 0:03:32.880 --> 0:03:35.280 down to confidence. When you look at what's happening in 0:03:35.280 --> 0:03:38.520 the economy. Firms didn't like what they were coming out of. 0:03:38.560 --> 0:03:41.080 They didn't know what was happening, and so there wasn't 0:03:41.080 --> 0:03:43.560 a sense of confidence the economy. If you don't have confidence, 0:03:43.560 --> 0:03:45.520 then you're not borrowing, you're not hiring, you're not spending. 0:03:45.760 --> 0:03:48.200 There was some of this, but not enough of it, 0:03:48.240 --> 0:03:50.840 and so you had a sequential recovery and month to 0:03:50.840 --> 0:03:53.520 month to month throughout twenty twenty three, but it was 0:03:53.560 --> 0:03:56.520 nowhere near what people were expecting or hoping for, and 0:03:56.560 --> 0:03:59.600 so people have become very very despondent on what they're 0:03:59.600 --> 0:04:00.920 seeing in the economy right now. 0:04:00.960 --> 0:04:03.080 So Leland, what does this all mean for American investors 0:04:03.080 --> 0:04:05.800 and American companies that do business or want to do 0:04:05.840 --> 0:04:06.640 business in China. 0:04:08.720 --> 0:04:11.400 Well, I think this is, you know, peace by piece. 0:04:11.480 --> 0:04:14.119 We have been opening the eyes of foreign investors. I mean, 0:04:14.280 --> 0:04:15.760 you know, a long time ago, it was it was 0:04:15.800 --> 0:04:18.240 first it was gepolitics, and then it was the trade war, 0:04:18.360 --> 0:04:20.560 and then it was you know, COVID, and then it 0:04:20.640 --> 0:04:24.200 was COVID zero, and now it's you know, low growth 0:04:24.240 --> 0:04:27.360 after COVID zero, and with with the foreign foreign crackdown 0:04:27.400 --> 0:04:31.280 on business, crackdown on foreign businesses. So there hasn't been 0:04:31.320 --> 0:04:35.520 one thing that convinced foreign investors, foreign businesses that they 0:04:35.560 --> 0:04:38.680 had to be more careful about going into China. Maybe 0:04:38.680 --> 0:04:39.920 they didn't want to go there, maybe they had to 0:04:39.960 --> 0:04:42.640 pull their supply chains out. It's been incremental, but I 0:04:42.640 --> 0:04:46.279 think when we got to COVID zero, finally, I think 0:04:46.279 --> 0:04:49.480 a lot of foreign businesses they just said, enough is enough. 0:04:49.520 --> 0:04:51.719 We can't operate here. It's not worth it. And you know, 0:04:51.760 --> 0:04:55.240 we can't be susceptible to having our supply chains severed 0:04:55.640 --> 0:04:59.320 because somebody decides to do a nationwide lockdown. 0:04:59.360 --> 0:05:02.200 But so if you're Nike, if you're Disney, you're not 0:05:02.240 --> 0:05:04.200 gonna throw in the towel. If you're Apple, yeah, sure 0:05:04.200 --> 0:05:06.000 you're gonna move your supply chains a little bit. I mean, 0:05:06.040 --> 0:05:08.680 but that company is just so intertwined with China. 0:05:09.640 --> 0:05:11.440 That's exactly right. So what you're gonna do is you're 0:05:11.440 --> 0:05:14.680 gonna bifurcate your operations. So you're gonna have a China operations, 0:05:14.720 --> 0:05:17.240 You're gonna have an X Chine operations that allows you 0:05:17.320 --> 0:05:20.520 not to have supply chains that are that are tangled up. 0:05:20.760 --> 0:05:23.200 You produce in China for Chinese consumers, if you think 0:05:23.200 --> 0:05:24.800 that's a great market, then you stay in there and 0:05:24.800 --> 0:05:27.400 you need to ramp it up. But if you're if 0:05:27.440 --> 0:05:31.000 you're mostly ramping up for for for for foreign consumers, 0:05:31.360 --> 0:05:35.680 maybe you don't run your supply chains through China anymore. So, yes, absolutely, 0:05:35.760 --> 0:05:38.320 there's companies that don't have that absolutely don't want to 0:05:38.320 --> 0:05:40.320 pull themselves out of China and won't, but I think 0:05:40.320 --> 0:05:43.480 they're they're they're changing their approach and how they treat 0:05:43.560 --> 0:05:44.840 the China part of the equation. 0:05:45.320 --> 0:05:48.799 How concerned are you about China's property debt crisis. 0:05:51.800 --> 0:05:53.839 I'll be real provocative here and I'll say I'm not 0:05:53.880 --> 0:05:56.640 concerned at all. Not that things aren't a mess. I 0:05:56.720 --> 0:05:59.680 just look, we spent all of August. Everyone supposed to 0:05:59.680 --> 0:06:02.560 be a VACA. We've spent all of August listening to 0:06:02.920 --> 0:06:06.320 people say that China's collapsing. Emitt hard Landing. We had 0:06:06.320 --> 0:06:08.000 a lot of people worried about that, had a lot 0:06:08.000 --> 0:06:11.040 of notes going out saying, look, China is not collapsing. 0:06:11.080 --> 0:06:14.000 Here's what's actually happening. It's not that the property sector 0:06:14.040 --> 0:06:16.279 isn't a mess. The property sector is a mess. You've 0:06:16.279 --> 0:06:18.719 got a big shadow bank that's wobbling right now in 0:06:18.760 --> 0:06:21.240 Country Garden, which you had two years ago in Evergrand. 0:06:21.279 --> 0:06:24.240 It freaked everybody out. A lot of problems the property sector. 0:06:24.920 --> 0:06:29.039 But China is not a typical economic system. It is 0:06:29.080 --> 0:06:32.640 a non commercial financial system, which means they're much less 0:06:32.640 --> 0:06:36.039 susceptible to things like a limit moment, like an acute crisis. 0:06:36.080 --> 0:06:38.280 So you have the ability to do things in a 0:06:38.320 --> 0:06:40.599 non commercial financial system you can't do in the West. 0:06:41.000 --> 0:06:42.760 You can't do in the US can't do in Europe. 0:06:42.839 --> 0:06:46.000 And so the idea that this is going to create 0:06:46.040 --> 0:06:48.599 some sort of sense of financial contagion and just roll 0:06:48.640 --> 0:06:53.120 every everybody over very very unlikely. But it does cause 0:06:53.160 --> 0:06:56.320 stresses to the system. And I think that it's happening 0:06:56.360 --> 0:06:58.839 right now because the Chinese government is allowing it to happen. 0:06:59.080 --> 0:07:00.960 When it starts looking like guess could go out of control, 0:07:01.200 --> 0:07:04.120 then they step in and and and they ease conditions 0:07:04.160 --> 0:07:04.360 a bit. 0:07:04.480 --> 0:07:06.120 What are they going to do in terms of stepping in? 0:07:06.160 --> 0:07:08.320 I mean, are you talking the question of moral hazard here, 0:07:08.360 --> 0:07:10.120 like they're not going to let anything fail? 0:07:11.200 --> 0:07:13.080 Well, I think they want to. They want to. They 0:07:13.120 --> 0:07:16.520 know that they are creating very very difficult conditions inside 0:07:16.560 --> 0:07:18.880 the inside the property sector. What they want to keep 0:07:18.920 --> 0:07:21.080 the problems inside of property. So you want to make 0:07:21.080 --> 0:07:23.080 sure that financial contagent is it's spreading to other areas 0:07:23.120 --> 0:07:25.040 of economy. You want to make sure that cash flow 0:07:25.080 --> 0:07:28.200 doesn't completely freeze up. Uh, And so that's why you're 0:07:28.200 --> 0:07:30.200 seeing easing measures right now. So, I mean, we have 0:07:30.240 --> 0:07:33.040 a fiscal activity index we track and monetary stimulus index 0:07:33.120 --> 0:07:35.200 we track, and we could see that as they are 0:07:35.240 --> 0:07:38.040 pushing harder on some of these issues, like you know, 0:07:38.120 --> 0:07:40.320 the resolution on these shadow banks, and and and and 0:07:40.440 --> 0:07:43.760 as property continues to deteriorate, then they step in and 0:07:43.760 --> 0:07:45.320 they give it a little bit of juice on the side. 0:07:45.360 --> 0:07:48.160 And so there is there is a you know, a 0:07:48.200 --> 0:07:50.720 push and pull on these things. But in terms of 0:07:51.000 --> 0:07:53.600 a bank, a big shadow bank falling in it causing 0:07:53.640 --> 0:07:55.920 the system to fall apart in a domino effect like 0:07:55.960 --> 0:07:58.400 we saw with Lehman, that's not going to happen in China. 0:07:58.480 --> 0:08:00.960 So what are their corners within the economy have been 0:08:01.000 --> 0:08:04.640 able to offset those concerns when you're talking about when 0:08:04.640 --> 0:08:06.880 you're looking at what's happening with the property debt crisis 0:08:06.920 --> 0:08:08.680 not being as big of an issue as maybe people 0:08:08.720 --> 0:08:10.280 are thinking at this point. 0:08:11.440 --> 0:08:13.440 Well, one of the problems is you haven't had real 0:08:13.480 --> 0:08:17.760 strength anywhere else to compensate. So if the conversation right 0:08:17.800 --> 0:08:19.680 now is you know, are things going greater are they 0:08:19.720 --> 0:08:23.200 going not that great? Then a difficult you know, it's 0:08:23.200 --> 0:08:25.640 a difficult thing to hash out. But you know, luckily 0:08:25.680 --> 0:08:27.840 for us it's been very easy because the question is 0:08:28.080 --> 0:08:30.760 is China growing or is it China collapsing? And China's 0:08:30.840 --> 0:08:33.200 clearly not collapsing. I think the whole thing is ludicrous. 0:08:33.240 --> 0:08:36.000 That that is the sentiment people have right now. If 0:08:36.040 --> 0:08:38.200 you look at what's happening in the manufacturing sector, it's 0:08:38.200 --> 0:08:42.679 actually held up much more impressively this year than we 0:08:42.720 --> 0:08:45.160 thought it would. You've got enormous headwinds. You're coming off 0:08:45.200 --> 0:08:49.320 three years of gangbusters growth. It's manufacturings holding its own. 0:08:49.360 --> 0:08:51.520 Is it doing great? Is it doing twenty twenty two? 0:08:51.559 --> 0:08:51.719 Low? 0:08:52.280 --> 0:08:54.880 It's not doing It's not what it was, but it's 0:08:54.880 --> 0:08:57.520 doing okay. It's not a huge weak point. The consumption 0:08:58.200 --> 0:09:00.000 parts of the e conoity. We look retail and services, 0:09:00.120 --> 0:09:00.960 are they doing great? 0:09:01.160 --> 0:09:01.360 Well? 0:09:01.400 --> 0:09:05.240 Parts of services are, but overall doing okay, you know, 0:09:05.360 --> 0:09:08.320 very uneven. So they're not a real bright spot. It's 0:09:08.440 --> 0:09:10.760 just you know, you're not seeing great stuff out of China. 0:09:10.800 --> 0:09:12.800 You're not seeing good data, but you're just not seeing 0:09:12.840 --> 0:09:15.520 anywhere near as negative a story as a lot of 0:09:15.520 --> 0:09:18.679 people think is happening inside inside the walls of the economy. 0:09:18.760 --> 0:09:21.199 Well, hey, just before we let you go, Leland, talk 0:09:21.240 --> 0:09:24.600 about political implications here she as president for life, as 0:09:24.800 --> 0:09:28.240 said in the past, any political implications in thirty seconds. 0:09:29.679 --> 0:09:32.160 This is she's show. So we can you know we 0:09:32.200 --> 0:09:34.720 spend a lot of time talking about how you know, 0:09:34.760 --> 0:09:37.920 four investors say, oh, Shei Jinping would never do this 0:09:38.120 --> 0:09:40.880 because dot dot dot. I think after a year of 0:09:40.880 --> 0:09:43.160 COVID zero we have we should be coming to the 0:09:43.200 --> 0:09:46.200 conclusion that there is nothing Chijin Ping won't do simply 0:09:46.240 --> 0:09:47.840 because we don't think he'll do it. It can be 0:09:47.960 --> 0:09:51.280 very humble in in evaluating where he's taking the economy, 0:09:51.320 --> 0:09:53.120 and it's in a very different direction than than he 0:09:53.200 --> 0:09:53.880 ran in the past. 0:09:54.240 --> 0:09:55.600 All right, we're gonna have to leave it there. Thank 0:09:55.600 --> 0:09:57.640 you so much for taking the time this afternoon. That's 0:09:57.679 --> 0:10:01.440 Leland Miller, CEO at China beij International, joining us this 0:10:01.480 --> 0:10:03.760 afternoon on zoom from Washington, DC. 0:10:04.160 --> 0:10:07.640 If you're listening to the Bloomberg Business Week podcast, catch 0:10:07.679 --> 0:10:11.040 us live weekday afternoons from three to six Eastern Listen 0:10:11.120 --> 0:10:14.599 on Bloomberg dot com, the iHeartRadio app, and the Bloomberg 0:10:14.640 --> 0:10:18.800 Business App, or watch us live on YouTube ZIM. 0:10:19.040 --> 0:10:23.080 We all know how much AI is all the hype. 0:10:22.679 --> 0:10:25.960 I mean, just look different. Vidia is here to date 0:10:26.280 --> 0:10:27.839 increase of two hundred percent or. 0:10:27.760 --> 0:10:32.200 More exactly, though questions do remain about what this all 0:10:32.320 --> 0:10:37.199 means for cybersecurity, particularly in the workplace, especially since generative 0:10:37.320 --> 0:10:42.360 AI applications continue to evolve. So we have Dana simbercov 0:10:42.520 --> 0:10:46.800 chief Risk, Privacy and Information Security Officer at a Point, 0:10:46.920 --> 0:10:50.320 joining us on Zoom from New Hampshire to explain why 0:10:50.360 --> 0:10:54.000 the cybersecurity industry isn't ready for the AI boom and 0:10:54.040 --> 0:10:58.880 what guardrails companies should use to protect their employees. Dana, 0:10:58.920 --> 0:11:01.800 thanks so much for joining us. As always, I want 0:11:01.800 --> 0:11:04.240 to get your thoughts on that because when we are discussing, 0:11:04.320 --> 0:11:07.120 like Tim and myself about this AI boom, why is 0:11:07.120 --> 0:11:09.840 it that cybersecurity companies may not be ready for this 0:11:10.000 --> 0:11:10.800 just yet. 0:11:12.040 --> 0:11:14.320 Well, thanks Jess and Tim for having me this afternoon. 0:11:14.320 --> 0:11:17.600 Great to be with you. I think AI is just 0:11:17.800 --> 0:11:21.160 yet another obstacle in the road to looking for that 0:11:21.240 --> 0:11:24.640 perfect security solution that just doesn't exist out there. Honestly, so, 0:11:25.600 --> 0:11:29.160 artificial intelligence and sort of the leap learning that is 0:11:29.200 --> 0:11:35.120 coming through technologies like that GBT really puts cyber professionals 0:11:35.120 --> 0:11:41.080 on edge because this is just one more ripple in 0:11:41.120 --> 0:11:43.880 the world we live in where cyber professionals have to 0:11:43.880 --> 0:11:46.880 be right one hundred percent of the time and bad 0:11:46.920 --> 0:11:49.880 guys only have to be right once in order to 0:11:49.920 --> 0:11:51.599 get inside of your defenses. 0:11:51.800 --> 0:11:54.040 And there's a shortage of bad guys out there, Dana, 0:11:54.080 --> 0:11:56.319 as we as we certainly know. So what's the worst 0:11:56.320 --> 0:11:59.040 case scenario here? I mean, describe for us what kind 0:11:59.040 --> 0:12:00.640 of keeps you up at night, makes you scared. 0:12:02.320 --> 0:12:06.600 Well, I think that really the secret to building a 0:12:06.600 --> 0:12:09.520 good program and addressing this is really to go back 0:12:09.520 --> 0:12:12.160 to cyber hygiene basics, doing what we do every day, 0:12:12.200 --> 0:12:14.440 which is making sure that we have good data governance 0:12:14.480 --> 0:12:19.800 in place within our companies and across our partner ecosystems. 0:12:19.880 --> 0:12:23.280 Because if you know what information you're handling, if you 0:12:23.360 --> 0:12:26.040 know what it is, where it is, who can access it, 0:12:26.080 --> 0:12:29.040 and how it's being shared, then you can largely mitigate 0:12:29.080 --> 0:12:31.800 some of the risks that are associated with AI. So 0:12:31.880 --> 0:12:36.160 at the end of the day, it does oh no, continue, Well, 0:12:36.240 --> 0:12:37.679 I was just going to say, at the end of 0:12:37.720 --> 0:12:43.040 the day, it does come down to people, policy and technology. 0:12:43.120 --> 0:12:46.600 So there really is no bad technology, just bad use 0:12:46.640 --> 0:12:47.560 of technology. 0:12:48.200 --> 0:12:51.920 And when you're talking about cybersecurity, are there particular sub 0:12:51.960 --> 0:12:54.679 industries or companies that you think might potentially be more 0:12:54.760 --> 0:12:55.760 vulnerable than others? 0:12:57.679 --> 0:13:00.679 Well, I certainly think that the ability for or again 0:13:00.720 --> 0:13:07.719 those malicious bad actors to use AI to potentially perpetrate cybercrime, 0:13:07.880 --> 0:13:11.960 take advantage of insiders inside of a company to really 0:13:12.920 --> 0:13:16.319 accelerate the process of cyber attacks. We've already seen through 0:13:16.520 --> 0:13:20.560 phishing and smishing, where somebody receives a phone call or 0:13:20.600 --> 0:13:23.240 a text message saying that they are an executive that 0:13:23.320 --> 0:13:26.120 need help right away. Just imagine that amplified with the 0:13:26.160 --> 0:13:29.800 ability to actually, you know, fake person over video, these 0:13:29.840 --> 0:13:32.560 deep fakes that we've been hearing about where a person's 0:13:32.720 --> 0:13:36.040 image or voice could be easily replicated data. 0:13:37.040 --> 0:13:40.200 You said phishing. We all know about phishing. Did you 0:13:40.200 --> 0:13:40.920 say smishing? 0:13:42.440 --> 0:13:47.840 Smishing, Yes, that's smishing is using a text message or 0:13:48.000 --> 0:13:51.320 some kind of social media. So whether it's WhatsApp, your phone, 0:13:51.559 --> 0:13:54.839 or you know, just pretending to be somebody that you're 0:13:54.880 --> 0:13:58.040 not and using technology to get to an intended target. 0:13:58.080 --> 0:14:00.480 And this is really common. We see it a lot 0:14:00.920 --> 0:14:04.280 both inside of our company is you know, as we 0:14:04.360 --> 0:14:08.640 build our own cyber defenses, but also across our customer ecosystem, 0:14:08.760 --> 0:14:12.800 where it really isn't just what you know, but who 0:14:12.840 --> 0:14:16.120 you are that makes you a target potentially within a company. 0:14:16.200 --> 0:14:17.440 Yeah, I didn't know that what it was. That's what 0:14:17.440 --> 0:14:19.120 it was called. We had a great cover story an 0:14:19.160 --> 0:14:22.360 excerpt from Zeke Fox's forthcoming book Number Go Up that 0:14:22.440 --> 0:14:25.040 talked all about where those text messages actually come from. 0:14:25.160 --> 0:14:27.960 I also encourage everybody listening who's interested to go check 0:14:28.000 --> 0:14:31.000 that one out. It was just a couple of weeks ago. Okay, So, Dana, 0:14:31.040 --> 0:14:32.480 what about when it comes to I mean, when I 0:14:32.480 --> 0:14:35.320 think about the worst case scenario, I mean, I understand, like, 0:14:35.360 --> 0:14:38.320 I consider myself pretty savvy when it comes to, uh 0:14:38.560 --> 0:14:40.960 not answering those phishing emails, And we certainly get trained 0:14:40.960 --> 0:14:42.480 pretty well here at Bloomberg, and I think a lot 0:14:42.520 --> 0:14:44.360 of companies do that in this day and age. 0:14:44.360 --> 0:14:46.400 Even do some trick emails at times just to see 0:14:46.440 --> 0:14:47.080 if we get caught. 0:14:47.200 --> 0:14:49.520 Yeah, they do. You got to you got to be vigilant. 0:14:49.760 --> 0:14:53.040 I think my concern though, is is is how generative 0:14:53.080 --> 0:14:55.440 AI sort of changes that, and it makes it so 0:14:55.480 --> 0:14:58.160 it's like really not possible to distinguish what is real 0:14:58.200 --> 0:15:01.160 and what isn't real. So so let's say that the 0:15:01.160 --> 0:15:04.000 weakest link is always the person. Where do companies like 0:15:04.040 --> 0:15:06.520 afpoint come in to try to stop that from happening? 0:15:07.720 --> 0:15:09.880 Well, I think at the end of the day, it 0:15:09.960 --> 0:15:13.920 really is going to come down to not only identity, 0:15:14.960 --> 0:15:17.960 but also technology and what we allow individuals to do. 0:15:18.080 --> 0:15:20.560 So just in the same way we've been talking over 0:15:20.560 --> 0:15:23.160 the last really couple of years with COVID about now 0:15:23.200 --> 0:15:28.040 the borderless office, where employees are working really from anywhere 0:15:28.040 --> 0:15:31.479 in the world, they're home, Starbucks, you know, the office. 0:15:32.200 --> 0:15:35.160 That means that there's no perimeter around the office that 0:15:35.200 --> 0:15:37.640 you can protect, and so identity really has become that 0:15:37.680 --> 0:15:40.280 new perimeter to a great extent, and making sure that 0:15:40.360 --> 0:15:42.640 you know who you're talking to and who you are 0:15:43.120 --> 0:15:45.880 is going to be critical. And limiting the ability for 0:15:46.600 --> 0:15:49.600 somebody to move either horizontally or vertically within a company 0:15:49.640 --> 0:15:52.520 if they are impersonated, is going to really help sort 0:15:52.520 --> 0:15:55.160 of fill that gap and protect against that kind of risk. 0:15:55.600 --> 0:15:58.480 We actually did hear from z Scaler after the bell. 0:15:58.520 --> 0:16:01.480 They did report earnings and there are forecasts for EPs 0:16:01.560 --> 0:16:03.520 to beat estimates. But of course, when it comes to 0:16:04.080 --> 0:16:06.960 a cloud cybersecurity company like this, and I have to 0:16:07.000 --> 0:16:09.440 note it stocks up more than five percent, and after 0:16:09.480 --> 0:16:12.400 I was treating how does cloud play into this? And 0:16:12.560 --> 0:16:14.280 when it comes to AI as well, in some of 0:16:14.320 --> 0:16:15.000 your concerns. 0:16:16.160 --> 0:16:18.720 Well, cloud is both an opportunity and a risk. That 0:16:18.880 --> 0:16:21.800 certainly a point as a as a cloud first company 0:16:21.840 --> 0:16:24.720 providing services to you know, millions of our customers around 0:16:24.760 --> 0:16:27.320 the world, takes advantage of a lot of the build 0:16:27.360 --> 0:16:30.720 in security controls that exist through our partners like Microsoft 0:16:30.800 --> 0:16:34.480 and others. There's also real opportunity with AI and the 0:16:34.480 --> 0:16:38.680 cloud to benefit from you know, the kind of machine 0:16:38.760 --> 0:16:41.760 learning and intelligence that could also be used to fight cybercrime. 0:16:41.840 --> 0:16:44.080 So I think there are tremendous opportunities that the cloud 0:16:44.120 --> 0:16:45.920 brings a really at the end of the day at 0:16:45.920 --> 0:16:51.280 somebody else's computer, and so that good data hygiene data 0:16:51.320 --> 0:16:53.240 governance is going to be critical to making sure that 0:16:53.280 --> 0:16:56.680 whether you're in the cloud or on premise, that you're 0:16:56.720 --> 0:16:58.640 really doing the right things to protect your business and 0:16:58.680 --> 0:16:59.360 your data. 0:16:59.480 --> 0:17:00.960 Is there a future for on premise or is it 0:17:01.000 --> 0:17:01.600 all in the cloud? 0:17:03.160 --> 0:17:06.040 Well, hard to say. I think, you know, the cloud 0:17:06.080 --> 0:17:09.719 is certainly the future. It's it's the wave, it's the 0:17:09.720 --> 0:17:13.359 direction that we see companies moving more and more. I 0:17:13.359 --> 0:17:16.480 think that there will likely always be some hybrid environments 0:17:16.520 --> 0:17:18.679 and depending on your industry, depending on the kind of 0:17:18.680 --> 0:17:22.400 information you have, cloud is not always possible, but we'll see. 0:17:22.680 --> 0:17:22.840 Now. 0:17:22.880 --> 0:17:25.000 You never say never, and I think it's always good 0:17:25.040 --> 0:17:25.960 to head your bets. 0:17:26.440 --> 0:17:30.240 Whenever you speak to companies, what is their biggest concern 0:17:30.320 --> 0:17:30.680 right now? 0:17:32.760 --> 0:17:35.320 Well, again, I think it is knowing where that data is. 0:17:35.359 --> 0:17:39.440 It's that unknown, that risk of not knowing is never better. 0:17:39.840 --> 0:17:42.880 And so you know, the challenge for AI is clearly 0:17:42.960 --> 0:17:45.800 that you can have a machine outpacing you rapidly. We 0:17:45.840 --> 0:17:48.639 now see that our computers regularly are asking us to 0:17:48.640 --> 0:17:51.199 prove that we're human by answering thinks like captures when 0:17:51.240 --> 0:17:56.080 you go to websites, Will computers outpace humans at some point? Maybe? 0:17:56.119 --> 0:17:59.440 I think again, for cybersecurity and privacy professionals, it's building 0:17:59.480 --> 0:18:02.440 accounted into the way that we use data, making sure 0:18:02.480 --> 0:18:05.920 that there's good transparency with our customers, and making sure 0:18:05.960 --> 0:18:07.840 that we're really, you know, doing the right thing to 0:18:08.000 --> 0:18:11.640 maximize the opportunity for businesses to do what they should 0:18:11.680 --> 0:18:14.800 be doing while protecting the rights of individuals and data subjects. 0:18:14.840 --> 0:18:16.159 I don't know, just do you have any ever have 0:18:16.200 --> 0:18:18.880 a problem with those captures. I feel like they're they're 0:18:18.880 --> 0:18:21.920 already the captures have already outsmarted me. I mean, you know, 0:18:21.920 --> 0:18:23.920 what I'm talking about. Write those things. 0:18:24.720 --> 0:18:27.120 Yeah, come on, I. 0:18:27.080 --> 0:18:29.120 Mean, I mean, I honestly like one time I got 0:18:29.119 --> 0:18:31.760 one of those Bloomberg emails and accidentally clicked it on something. 0:18:31.800 --> 0:18:33.119 Then I had to go back through and do all 0:18:33.160 --> 0:18:35.760 of the training. So I'm super vigilant now. 0:18:35.640 --> 0:18:38.120 And not to busted. You only make that mistake once. 0:18:38.040 --> 0:18:40.119 I know, exactly, so never again after doing that. 0:18:40.640 --> 0:18:43.040 Well, that's that's good. That's good hyber training. 0:18:44.200 --> 0:18:44.840 It really is. 0:18:44.960 --> 0:18:47.040 Yeah, we have we have some pretty uh you know, 0:18:47.200 --> 0:18:48.840 and you gotta it takes a while to do those 0:18:48.880 --> 0:18:51.800 trainings too. Exactly for the last day, Dana, I'll tell 0:18:51.800 --> 0:18:55.200 you that Data Simberkoff really appreciate you taking the time. 0:18:55.240 --> 0:18:58.600 She's chief Risk, Privacy and Information Security officer at a 0:18:58.800 --> 0:19:02.480 point joining us on Zoom from New Hampshire this afternoon. 0:19:02.560 --> 0:19:04.159 I think there's a lot of questions about what the 0:19:04.160 --> 0:19:07.200 future of sort of the hybrid cloud is, Jess, And 0:19:07.400 --> 0:19:09.040 you know whether or not what's on premise and what's 0:19:09.080 --> 0:19:12.160 not on premise, especially with the multinational companies where those 0:19:12.160 --> 0:19:14.760