The threat of cyberattacks is increasing in the financial markets industry because there are so many participants and so many points of entry. So maintaining cybersecurity needs to be the responsibility of multiple participants in the financial sector, concludes a new report from SWIFT and BAE Systems.
The report, "The Evolving Advanced Cyber Threat to Financial Markets," analyzes how the financial markets are susceptible to cyberattacks and considers how market systems and participants are vulnerable to such attacks across the securities, trading, foreign exchange, and banking and payments market segments. It also proposes ways to fight these threats.
The securities market is particularly vulnerable due to the large number of participants and systems as well as the complex interactions involved. Traders, brokers and investors can unwittingly expose the industry to vulnerabilities through multiple entry points.
The report proposes that participants communicate with others and use checks and data to support pre- and post-trade activities to stave off cyberthreats. Also, securities market systems need to work with participants to identify risks in common practices to jointly defend market operations.
In addition, banking and payments participants must also continue to strengthen security controls while building in protection for data delivery, and trading participants should review and manage areas of inherent trust, which are at risk of cyberattacks.
"Given the wide-ranging cyberthreat across market infrastructures and participants, it is clear that a holistic approach is non-negotiable," the report said. "It is not purely a technical issue as the threat takes advantage of weaknesses in market operations, people and processes. Security, therefore, needs embedding and co-ordinating across all levels of an organization — from the board right through to operations and its markets."