Tough new European Union regulations requiring banks to bolster their cybersecurity systems officially come into effect Friday — but many of the bloc’s financial services firms aren’t yet in full compliance with the rules.

The EU’s Digital Operational Resilience Act, or DORA, requires both financial services firms and their technology suppliers to strengthen their IT systems to ensure the industry is resilient in the event of a cyberattack or any other forms of disruption. It entered into effect on Jan. 17.

The penalties for breaches of the new legislation can be substantial. Financial services firms that fall foul of the new rules can face fines of up to 2% of annual global revenue. Individual managers could also be held liable for breaches and face sanctions of as much as 1 million euros ($1 million).

So far, the rate of compliance among financial services firms with the new rules has been mixed, according to Harvey Jang, chief privacy officer and deputy general counsel at IT giant Cisco.

“I think we’ve seen a mixed bag,” Jang told CNBC in an interview. “Of course, the more mature-stage companies are further along looking at this for at least a year — if not longer.”

“We’re really trying to build this compliance program, but it’s so complex. I think that’s the challenge. We saw this too with GDPR and other broad legislation that is subject to interpretation — what does it actually mean to comply? It means different things to different people,” he said.

This lack of a common understanding of what qualifies as robust compliance with DORA has in turn led many institutions to ramp up security standards to the level that they’re actually surpassing the “baseline” of what’s expected of most firms, Jang added.

A Censuswide survey of 200 U.K. chief information security officers commissioned by Orange Cyberdefense, the cybersecurity division of French telecoms firm Orange, showed that 43% of financial institutions in Britain aren’t yet in full compliance with DORA.

That’s a concern because, even though the U.K. falls outside the European Union now, DORA applies to all financial entities operating within EU jurisdictions — even if they’re based outside the bloc.

“Whilst it is clear that DORA has no legal reach in the U.K., entities based here and operating or providing services to entities in the EU will be subject to the regulation,” Richard Lindsay, principal advisory consultant at Orange Cyberdefense, told CNBC.

He added that the main challenge for many financial institutions when it comes to achieving DORA compliance has been managing their critical third-party IT providers.

“Financial institutions operate within a multi-layered and hugely complex digital ecosystem,” Lindsay said. “Tracking and ensuring that all parts of this system evidentially comply with the relevant elements of DORA will require a new mindset, solutions and resources.”

Banks are also adding higher levels of scrutiny in their contract negotiations with tech suppliers due to DORA’s strict requirements, Jang said.

The Cisco chief privacy officer told CNBC that he thinks there is alignment when it comes to the principles and the spirit of the law. However, he added, “any legislation is a product of compromise and so, as they get more prescriptive, then it becomes challenging.”

“The principles we agree with, but any legislation is a product of compromise, and so as as they get more prescriptive, then it becomes challenging.”

Still, despite the challenges, the broad expectation among experts is that it won’t be long until banks and other financial institutions achieve compliance.

“Banks in Europe already comply with significant regulations which cover the majority of the areas that fall under DORA,” Fabio Colombo, EMEA financial services security lead at Accenture, told CNBC.

“As a result, financial services institutions already have mature governance and compliance capabilities in place, with existing incident reporting processes and solid ICT risk frameworks.”

Ramp, the expense management company recently valued at $7.65 billion, is moving into business travel through a deal with Booking Holdings’ Priceline, as the growing number of corporate spend platforms look to retain and attract customers with additional services.

The new product, called Ramp Travel, utilizes AI and automation to help streamline and simplify the process of booking and doing expenses for business travel, with Priceline providing Ramp users access to airline, hotel, and other travel inventory.

Ramp CEO Eric Glyman said it has seen a significant uptick in businesses on the platform using cards and budget for travel, representing 20% of annual card spend, up from roughly 10% in 2021. That ultimately led Ramp to the Priceline partnership and new platform feature.

“One in nearly every 5 dollars spent on Ramp cards is related to flights, hotels, entertainment related to travel,” Glyman said. “This is a substantial way to just stitch it all together.”

Ramp said it now has more than 25,000 businesses using its platform.

Ramp, the two-time CNBC Disruptor 50 company (it ranked No. 32 in 2024), has attempted to set itself apart from the growing number of expense management software vendors by not only tracking spending, but also helping companies save money by flagging duplicated expenses, or through contract negotiations. Glyman said that same approach to controls will be applied to travel.

The companies see an opportunity to take share from corporate travel offerings that often rely on high fees that guarantee control over where employees stay, or the carriers which travelers fly with.

Priceline CEO Brett Keller described corporate travel as an “archaic business model” in which the bigger companies negotiate contacts directly with a select set of suppliers, which results in higher rates because of the customer support and service that is then used.

“The modern traveler is much smarter than that now, and they do most of the work themselves, so as a result, they should deserve access to much broader inventory and lower prices,” Keller said.

Travel is the latest feature that Ramp has added in the last year, also rolling out Ramp Intelligence, which generates insights for finance teams and proactively suggests savings opportunities, and Ramp Plus, a new suite of services for enterprise clients such as Shopify.

The spend management space has become crowded, with fellow Disruptors Brex and Navan, as well as Expensify, Mesh Payments, Airbase and Center competing for market share alongside traditional players like SAP’s Concur, making these new additions by Ramp critical to its growth and continued disruption.

Glyman said the push into travel and the other new offerings should help grow its client roster. While a majority of Ramp customers have never raised venture capital, the average size of companies using the platform has more than doubled in the past three years, he said.

“It does not just deepen [Ramp] but it also opens us up to new clients that we can serve today that we couldn’t before,” Glyman said.

Neurotech startup Synchron is ramping up production of its flagship brain-computer interface to prepare for commercial demand, as the company inches closer to bringing its device to market. 

Synchron announced Thursday that it has acquired a minority equity stake in the German manufacturer Acquandas, which has the unique ability to layer the metals that make up one component of the company’s implant. 

As part of the deal, Synchron will get exclusive access to Acquandas’ layering technology for medical devices, and Synchron’s CEO Tom Oxley and CTO Riki Banerjee will join the manufacturer’s board.

Founded in 2012, Synchron has developed a brain-computer interface, or a BCI, called the Synchron Switch. The stent-like device is inserted through the patient’s blood vessels, and it allows people with limited physical mobility to operate technology like smart home devices and cursors with their mind.

During initial studies, Synchron has so far implanted six patients in the U.S. and four patients in Australia. The company will have to carry out additional trials that demonstrate the safety and efficacy of its device before regulators in the U.S. Food and Drug Administration grant approval for broader commercialization. 

Oxley said Synchron has worked with Acquandas for years, but the official partnership will help the company continue to innovate around implantable neurotechnology and scale to address a “very large unmet need.”  

“There are millions of people with paralysis who we think are in need of this technology, and we’re preparing to produce in high volumes,” Oxley told CNBC in an interview. 

Synchron declined to share the specific size of Synchron’s stake in Acquandas or the exact number of devices it is producing.

As the company is working to ramp up its manufacturing, it is also hoping to gauge interest from more prospective patients. Synchron is planning to launch an official patient registry in mid-February that will allow patients with limb or motor impairment to stay updated about trials and share details about their needs. 

“We wanted to create a mechanism where people could express interest, and it’s going to help us shape the consideration for which clinical sites across the US we focus in first,” Oxley said.

Although Synchron still has a long road ahead, the company has already caught the attention of powerful investors and competitors.  

In 2022, Synchron announced a $75 million financing round that included funding from the investment firms of both Microsoft co-founder Bill Gates and Amazon founder Jeff Bezos. Tesla and SpaceX CEO Elon Musk, who owns the BCI company Neuralink, asked a number of questions about Synchron during a meeting with Neuralink executives and engineers in July 2022, according to a report from Bloomberg. 

Like many other BCI companies, Neuralink’s system is designed to be implanted directly into a patient’s brain tissue through open brain surgery. By inserting a BCI directly into the tissue, the quality of the neural signals should be strong, but the nature of the procedure makes it inherently riskier.  

Musk announced that Neuralink implanted its device in a human for the first time on Sunday, and that the patient is “recovering well,” according to a post on X.

Synchron relies on a less-invasive approach for implanting its BCI that builds on existing endovascular techniques. The company’s stent, called the Stentrode, is fitted with tiny sensors and, after insertion, is delivered to the large vein that sits next to the motor cortex. 

Since Synchron’s BCI isn’t inserted directly into the brain tissue, the quality of the brain signals is not as strong, according to the company. But the team believes the minimally invasive nature of the procedure will ultimately make it more accessible. 

“We should be far exceeding the Stentrode,” Musk said at Neuralink’s July meeting, according to Bloomberg. “And they are currently kicking our a**.”

BEIJING — Hot competition in China’s electric car market is pushing local automakers to sell vehicles with fancy tech that Tesla doesn’t yet offer in the country — and sometimes at lower prices.

No longer are companies competing primarily on driving range. Instead, as they reveal new models at a rapid pace, they’re piling on a slew of features: in-car projectors, refrigerators and driver-assist, to name a few.

Tesla’s cars don’t come with those accessories, and Elon Musk’s automaker only offers a limited version of its driver-assist tech in China right now.

“Electric vehicles in China becomes a consumer electronics [product]. It’s similar to the cellphone industry,” said Li Yi, chairman and CEO of Appotronics, a Shenzhen-based laser display company that claims to work with major automakers.

“In China, I think it’s more entertain[ment], more gadgets, people really want to buy something with the most advanced tech specs,” he said, adding that in Europe, people focus more on functionality.

Appotronics claims it made the 32-inch projection screen that unfurls inside the newly launched M9 SUV from Huawei’s Aito brand. Huawei did not immediately respond to a request for comment.

As of Jan. 1, Aito said orders for the M9 surpassed 30,000 vehicles, with deliveries set to begin in late February.

The six-seater car comes with a refrigerator, collapsible front seats, and instead of a physical dashboard, tech that projects the information so it appears overlaid on the road ahead. This tech, known as AR HUD, can also display navigation instructions.

The M9 SUV sells for about 470,000 yuan to 570,000 yuan ($66,320 to $80,430).

In comparison, Tesla’s Model Y, a mid-sized SUV, starts at 258,900 yuan while the Model S sedan starts at 698,900 yuan.

Among other well-known competitors, Li Auto‘s L9 SUV starts at 429,900 yuan and comes with AR HUD, a refrigerator and driver-assist tech.

Xpeng‘s G9 SUV, widely considered a leader in China for driver-assist tech on city streets, starts at 289,900 yuan.

That’s just a peek at the swath of cars and the available bells-and-whistles in China. More than 100 new EV models are due to launch in 2024 in China, according to HSBC.

Consumers’ interest in new car models has focused on in-vehicle tech features and driver-assist capabilities — “far more advanced” than prior electric cars or traditional gasoline-powered vehicles, said Yiming Wang, analyst at China Renaissance Securities.

Price and maximizing mileage are two other top considerations for consumers, Wang said.

Chinese regulators are gradually allowing passenger cars to use more driver-assist features in cities, such as for smooth braking at traffic lights. Chinese authorities in November also announced a nationwide push for developing driver-assist and self-driving technologies via pilot programs.

However, it remains unclear to what extent consumers are willing to pay for such features.

“Even though customers, specially those in China, always indicate in surveys that they are willing to pay for general safety and navigation [advanced driver assistance system] features, their answers change when they are asked about specific ADAS features and their buying behavior tells are different story,” said Shay Natarajan, a partner at Mobility Impact Partners, a private equity fund that invests in transportation.

“There are over 20 unique ADAS features,” she said, noting blind spot warnings or surround camera view were the most popular items. “Note that FSD is not on top of the list of ADAS features customers are willing to pay for.”

Microsoft shares were trading down as much as 5% on Wednesday, a day after the software maker issued worse-than-expected quarterly revenue guidance. Many analysts remained optimistic about the company’s prospects, but a few fretted about how recent investments in artificial intelligence won’t immediately come to fruition.

Growth in AI has the potential to propel Microsoft’s two largest businesses: the Azure public cloud and the more traditional, and market-leading, Office productivity software.

Microsoft has been increasing its capital expenditures to get infrastructure in place to provide AI services to developers at other companies and roll out assistant capabilities to apps such as Word and Outlook. The extra spending cuts into Microsoft’s cloud gross margin.

Last week, Microsoft said its Copilot assistant for these Microsoft 365 applications would cost $30 per person per month on top of regular subscription prices. The company did not say when it would start charging. On Tuesday’s call, Amy Hood, Microsoft’s finance chief, said growth from AI services would be “gradual” as Azure AI tools gain in popularity and Copilots such as the one for Microsoft 365 become generally available. She said that for the current 2024 fiscal year, which will end in June 2024, the impact would mainly come in the second half.

Some investors will probably have to change their expectations on revenue as a result of Hood’s comments, JPMorgan analysts led by Mark Murphy, with a buy rating on Microsoft stock, wrote in a Wednesday note.

“The messaging on Copilot was more about tempering rather than inflating expectations,” wrote UBS analysts led by Karl Keirstead, which also has a buy rating on Microsoft.

Members of the public became captivated by the ChatGPT chatbot from startup OpenAI, which relies on Azure, after its release in late 2022. It’s a prominent example of generative AI, which accepts human input such as text or an image and automatically creates content in response. Companies selling productivity software, including Atlassian, have been hurrying to incorporate such generative features into their products, and delays in Microsoft’s release of its all-important Office suite could mean missing out on a clear growth opportunity.

“Overall, while it will take some additional time for the revenue to materialize, we expect MSFT, with its increasingly unique set of AI-infused Cloud services, is well positioned take share across its numerous operating segments in the coming years,” Stifel analysts led by Brad Reback, with a buy rating on the stock, wrote in a note distributed to clients.

Raymond James’ Andrew Marok and Mauricio Munoz, with the equivalent of a buy rating on Microsoft shares, had a similar tone.

“While the contribution may not come as quickly as hoped as AI-enabled products are tested, deployed, and eventually used at scale, MSFT’s position as an AI leader remains unblemished by today’s report,” they wrote.

Even if the clear growth probably won’t show up in 2023, during the call with analysts on Tuesday, Microsoft CEO Satya Nadella said that when it comes to new AI workloads in the cloud, Microsoft is in the lead.

— CNBC’s Michael Bloom contributed to this report.

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