Global Custodian Securities@Sibos 2019 - Page 23

[ C Y B E R - S E C U R I T Y ] SECURITIES MARKET ‘MOST AT-RISK’ OF CYBER ATTACKS, SAYS SWIFT REPORT The financial gain for a hacker targeting securities market infrastructures is high, while custodians and brokers are also at risk. A report published by SWIFT has identified the securities market as one of the ‘most at-risk’ areas for cyber-crime. Custodians, broker-dealers and market infrastructure providers such as central securities depositories (CSDs) are all being encouraged to embrace ‘checks, communication and data’ to fend off attacks. The report, produced in partnership with BAE Systems, highlighted that increas- ing transaction speeds, including high frequency trading, make securities markets more susceptible to sophisticated attacks. SWIFT explained the potential finan- cial gain for a hacker targeting market infrastructures is high, while participants are also at risk of being seen as more vulnerable. Some of the ways market infrastruc- tures, such as CSDs and clearing houses, can be targeted include hackers manipu- lating market and reference data such as Standing Settlement Instructions (SSIs) and pricing, along with attacking the mechanisms which match trades and cal- culate settlement values to fraudulently increase the gain on trades. “Over recent years, SWIFT has made good progress supporting financial institutions in their fight against well-or- ganised cyber attackers – but this report shows that now is not the time to sit back and take this progress for granted,” said Brett Lancaster, managing director, global head of customer security at SWIFT. “As cyber criminals become ever more innovative and agile, we need to continue to work together to build even stronger defences. Through our Customer Security Programme, we have been assisting the payments, securities, trade finance and foreign exchange sectors to better protect their immediate surroundings and have fa- cilitated better information sharing to help equip the industry with the tools it needs to combat cyber-crimes. This report is a timely reminder that we need to go further still to keep ahead of the criminals.” The report echoes comments at the 2018 Sibos conference in Sydney, where SWIFT’s global head of customer security issued a similar warning. “If people are attacking the kind of firm that works with SWIFT, then what is the limitation to why they should only be tar- geting payments? The fear is they could be looking at financial services within the securities market…There’s no reason why this couldn’t spill over,” said Lancast- er. “We have currently seen no attacks within our customer base in the securities market, but it’s always a comma, yet.” Following its symposium in May, the International Securities Services Asso- ciation (ISSA) released a report, where it concluded that although the securi- ties services industry has so far escaped unceasing cyber-assaults of this kind, it would be complacent to assume this state of affairs will continue. January 2019 23