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FinTech Trends Newsletter Week 26th Feb – 2nd Mar 2018
Rise in cyber attacks against financial services firms
Reported cyber attacks against financial services firms rose by 80% in 2017, reflecting the increasing number of attacks aimed at organisations.
The number of cyber attacks against financial services companies reported to the Financial Conduct Authority (FCA) has risen by more than 80% in the last year. In 2017, 69 cyber incidents were reported to the FCA, an increase on the 38 in 2016 and 24 in 2015. The figures were revealed by Robin Jones, the FCA’s head of Technology, Resilience and Cyber in a speech delivered to the PIMFA Financial Crime Conference on 25 January 2018.
Regulated financial services companies are required to report cyber incidents to the FCA if they: lead to a significant loss of data, or the availability or control of IT systems affect a large number of customers, or result in unauthorised access to, or malicious software present on, the company’s information and communications systems.
Over the last year, the National Cyber Security Centre recorded over 1,100 reported attacks, with 590 regarded as significant. Thirty of these incidents required action by government bodies, a number of which were targeted at financial sector organisations.
This increase in reported attacks reflects a drive for greater accountability with respect to reporting such incidents, as well as the growing frequency of such attacks. However, the overall numbers of reported incidents do appear to be quite low when you consider that ONS statistics suggest there are about 1.9 million incidents of cyber-related fraud each year. This either suggests that financial services firms are exceptionally resilient or failing to detect cyber-attacks. Another possibility could be that some are choosing not to report material attacks in order to avoid any reputational damage. Failure to detect and/or refusing to report incidents is very risky and short-sighted as it is counterproductive to exposing and addressing systemic weaknesses. Regulated companies would do well to heed the warning from the FCA on where firms could improve resilience.
Why is cyber crime still such a success?
We have seen numerous high-profile breaches against major financial services institutions in the last year, and the volume and complexity of the attacks are on the rise. As financial institutions shift to digital channels like online access and banking and mobile transactions, the attack surface grows, and there is more to protect.
Combine this with the fact that successful attacks on banks, asset management firms, hedge funds and financial services firms provide a quick way to monetise the data, and you can see why banks, alternative asset management firms and financial institutions are such popular targets. Given the number of hackers attempting to breach these institutions, it’s a matter of when, not if, financial institutions will be breached. Clearly, it’s critical that they protect the data that the criminals are after.
The fact the FCA argues that boards must assume responsibility for cyber security given the risks to the business, their clients, its customers and the wider market. It also advocates for a greater focus on ‘basic hygiene’ – making sure that critical assets including data are identified and that detection of attacks is improved.
One of the biggest risks facing financial services companies is complacency. Cyber attacks will actively adapt to defensive controls. As the FCA highlights, individuals and criminal groups are developing tools and exploiting vulnerabilities on an industrial scale. Financial services firms need to ensure they always stay one step ahead. Keep cyber security and systems up to date. Never stay complaisant.
For further advice and assistance about cyber security and education for your firm, contact Storm IT Financial to find out more information on Hedge Fund, Asset Management, Private Equity & Alternative Investment cyber security & firewall solutions, security education seminars, disaster recovery, back up, Regulatory & Compliant Solutions data storage, helpdesk support, cloud & IT Services.
Storm IT Financial FinTech News & Trends picks: Week 26th Feb – 2nd Feb 2018
Cyber security will stay at the top of our risk factor list, says Deloitte’sGlobal Risk Leader, James Caldwell
Understand what the risks & financial fears that surround the global economy and threat & impact from cyber attack in the financial world:
SEC: Companies Must Disclose More Info on Cybersecurity Attacks & Risks
The Securities and Exchange Commission (SEC) issues guidance for public companies providing investors info on their cybersecurity incidents:
Banks and fintechs need to improve how they collaborate – survey
Despite cooperation between financial institutions and fintech startups, collaboration remains challenging and time consuming, survey says:
The stuff of ledgers: cryptocurrency and blockchain
Behind the growth of cryptocurrencies like Bitcoin is an equally radical technological advance: distributed ledger technology (DLT), better known as blockchain:
https://www.bkl.co.uk/insights/cryptocurrency-blockchain/
Capgemini’s World FinTech Report 2018
Highlighting Symbiotic Collaboration as Key to Future Financial Services Success:
RegTech – A view on the phenomenon
RegTech – a term merging both regulatory and technology companies that address regulatory challenges in the financial services industry….:
https://blog.apiax.com/regtech-a-primer-8ab3e55bb68f
Fintech funding sets new records in 2017
Global investment in financial technology (fintech) ventures reached another all-time high in 2017:
https://www.finextra.com/pressarticle/72819/fintech-funding-sets-new-records-in-2017
Top 10 operational risks for 2018
The biggest op risks for 2018, as chosen by industry practitioners:
Risky AI business: Navigating regulatory and legal dangers to come
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Lloyds earmarks £3 billion for three-year IT transformation
Lloyds Banking Group is to invest £3 billion over the next 3 years in IT to digitise and transform the business:
Financial phishing accounts for over 50% of all phishing attacks for the first time
This is the first time since recording phishing attempts that figures have reached over 50 per cent…:
Budget airline pioneer Stelios to take on big banks with easyMoney
Reuters: Stelios, the easyJet founder, is launching an ISA product in Britain under a new easyMoney brand….:
