Regulators: cybersecurity poses biggest risk to global financial system
May 25, 2016
Last week, the chair of the Securities and Exchange Commission called cybersecurity the biggest risk facing the global financial industry.
"Cyber risks can produce far-reaching impacts," said SEC chair Mary Jo White.
For example, cybercriminals recently stole $81 million from a bank in Bangladesh by using Swift, the global money transfer network.
The SEC promises to step up regulation and Swift itself is expected to launch a new cyber security initiative this week that includes independent security audits of its customers. Meanwhile, top finance officials from G-7 nations met in Japan to discuss plans to improve global cybersecurity coordination.
It's a historic moment for global financial cybersecurity, said Tom Kellermann, CEO at Washington, DC-based Strategic Cyber Ventures and former member of the World Bank's security team. A decade ago, he wrote a prescient report for the World Bank outlying potential cyber risks that was ignored by many financial companies.
"They pooh-poohed the reality, that this would never be a wide-spread problem," he said. "But the criminals have caught up to the worst-case scenario espoused in that report and have operationalized them."
But three aspects of the financial system will make improving security more difficult, experts say. One is that the security of the system as a whole depends on its weakest member, who may be located anywhere in the world. Second, some victims might not even be aware they were hacked. And, finally, the move to real-time processing reduces some of the checks and balances that used to be in place.