For the last four years, the Securities Industry and Financial Markets Association, or SIFMA, has been holding its annual Quantum Dawn exercise, simulating a massive and wide-reaching cybersecurity event in banking and financial services.
This year’s Quantum Dawn exercise, which offers insight into what the industry could see as its biggest risks in cybersecurity, incorporated foreign participants from Europe and Asia as well as those from the U.S. What was discovered was that the financial sector has a lot to worry about when it comes to cybercriminals and keeping sensitive information safe.
Top Risks Heading Into 2020
According to a recent report, nearly one-quarter of all malware attacks target the financial services industry, more than any other sector. The number of credit cards that were compromised was up more than 200 percent while malicious apps grew by 100 percent.
This year’s event revolved around a scenario in which a targeted ransomware attack impacted major banks across the globe, starting in the United States and spreading throughout Asia and the United Kingdom. Ransomware has picked up steam in recent years, becoming a major culprit for large-scale attacks on banks and other sectors. The fictional scenario created by SIFMA focused on what would happen if an incident honed in on the biggest financial companies, taking important parts of the industry offline.
Nearly 800 participants from large banks and other financial firms from a dozen countries joined in on the Quantum Dawn exercise that attacked a bank that was too big to fail after the close of the stock market. Infiltrated by malicious ransomware and knocked offline, the scenario opened an opportunity to discuss weak points and fail-safes that companies have in response to a cyber attack. Topics like public disclosure and response actions were discussed after the simulation.
Situations like these are impacting major banks and financial companies across the world as markets remain highly unstable. The major issues that came up during and after the attack were related to the technical nature of the rapidly accelerating cyber attack as well as communications within the industry, including how companies communicate internally, passing information to their executives and employees.
Now, companies in the sector—and the sector as a whole—are looking forward to 2020, figuring out the best moves to keep risks and losses low. While protecting the industry from all cyberattacks, no matter their size, is impossible, it does help to take certain measures to cut down on the impact they have.
In Canada, the Bank of Canada has outlined a way to reduce the impact of cyber-attacks through stronger regulations on the industry. Regulators in Canada have been discussing putting in place more trusted and secure channels to exchange sensitive data while ensuring banks are protected. Governments could also consider mandating industry-wide testing, which is created through the joint efforts of regulators and intelligence agencies.
While there is no real answer at this point as to how to predict attacks and/or cut down on their overall impact, banks could take steps to at least keep losses minimal. This can be done through comprehensive coverage, such as cyber liability insurance, which is made specifically for financial companies looking to keep major losses from claims at bay. This kind of insurance protects losses coming from cyber risks including first-party loss, which involves costs directly incurred by the firm, and third-party loss, which involves losses from liability and defense costs and payments.
About Financial Guaranty Insurance Brokers
Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for entities of all types. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (626) 793-3330 to speak with one of our professionals.