Better risk management needed to combat more ambitious hack attempts

More sophisticated cyber-attacks on financial infrastructure needs better risk management strategy

Cyber

By Allie Sanchez

Cyber-attacks are not only becoming more commonplace, they are also becoming more ambitious and sophisticated.

Online miscreants are expected to work up their way to crippling financial market infrastructure (FMI), which are clearing house or payments systems that facilitate the smooth flow of money among various institutions.

Disabled FMIs have serious implications on global economic activity. For instance, Target2, Europe’s settlement system, moved $520 trillion through 88 million payments in 2015. In the same year, Automated Clearing House facilitated around $41 trillion through 24 billion transactions. 

To address these increasing threats, FMIs need a combination of adequate risk management and coverage, beefed up counter attack capabilities and prevention and response plans.

These institutions have come to accept that such incidents cannot always be prevented, thus response and recovery must be a priority. FMIs are also taking cyber security seriously and are partnering with “white hats” or ethical hackers to detect vulnerabilities in their system.

Another effort to prevent the paralysis of the global financial system the Bank of International Settlements, and IOSCO, the international body of securities regulators, are preparing response and recovery guidelines in case of successful attacks.
 

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