The financial system increasingly vulnerable to cyber attacks

An American government report launches an alarm on the weakness of defenses against malicious hackers. Banks and financial companies are not sufficiently equipped against cyber attacks.

Online attacks by hackers, or rather crackers, against financial systems are becoming increasingly risky, to the point that the same stability of the US system is threatened.
This is revealed by the Financial Stability Oversight Council (FSOC) annual report, which depends on the Treasury Department and the Federal Reserve.

MORE AND MORE CASES ARE HAPPENING. According to the report, despite the barriers for cybersecurity created by banks and financial companies, malicious incidents represent a potential system danger. The document explains that last year there were countless problems due to hacks that have created robbery of sensitive information on a large scale.

For example, some crackers have penetrated JPMorgan Chase’s servers to steal various types of data, including customers. And the Kaspersky Lab computer security agency has discovered that a group of cyber pirates has been conducting attacks of around 100 banks around the world for years, forcing them to invest $ 1 billion in compensating the loss of data and repairing the damage.

RISKS OF THE SYSTEM. The most vulnerable are, according to the document, the interconnection of payment and securities exchange systems. “While security technologies and the awareness of the possible risks are growing steadily,” says the report, “Criminal activities are also on the rise. There is the prospect of such a destructive incident that could paralyze operations in the financial sector. ”

Coma we have seen, interconnection is in general the weakest element of systems, such as aircraft. The FSOC invites financial agencies to become aware of possible more sophisticated and destructive attacks and to prepare themselves for these possible attacks. Janet Yellen, president of the Federal Reserve, added that the US system is capable of tackling catastrophic events from an economic point of view, such as the 2008 crisis (which is why the FSOC is preparing this annual report in 2010) and which means that lenders may continue to operate under conditions of prolonged recession, but that it is necessary to ‘promote new and higher standards for financial stability’.

The ARMAGEDDON. The most dangerous scenario is that of a chain paralysis, given the centrality of the banking system: “The concentration of key services in banks can create the risk of a cyber attack that hits many companies simultaneously with devastating consequences.”