Firms to be tested on cyber security readiness November 2019
Are brokers and firms prepared against a cyber-attack?
The Securities Industry and Financial Markets Association (SIFMA) will test how well firms can survive data hacks, bad data and more. CNBC reports SIFMA will likely test firms in the securities industry this fall to see if how workers respond to online attacks.
The test is known as the Quantum Dawn. SIFMA last used it November 7 and 8 in 2017. The test included more than 900 participants from more than 50 financial institutions. The tests “Simulate a cyberattack at multiple financial institution effecting the timeliness and/or accuracy of equity and fixed income futures transactions impacting the associated cash markets and the payments processes for foreign exchange,” SIFMA said.
What SIFMA discovered after the tests was sobering.
“A clear takeaway from the exercise is the importance of a robust partnership between the industry and government grounded in information sharing,” SIFMA reflected. “No single actor – not the federal government not any individual firm – has the resources to protect markets from cyber threats on their own.”
While the results may be alarming to some investors and brokers, it shouldn’t be too much of a surprise. A study released in November 2019 found that only 49 percent of organizations believed they were ready to handle a data breach or cyberattack.
But it’s not all doom and gloom when it comes to firms strengthening their cybersecurity. An August 2017 report from the U.S. Securities and Exchange Commission notes that most firms have plans for cyberattacks. “All broker-dealers and a large majority of advisers and funds maintained cybersecurity organizational charts and/or identified and described cybersecurity roles and responsibilities for the firms’ workforce,” the SEC report states.
CNBC did not reveal when the tests would be administered or if they would be similar to SIFMA’s past tests.
“We create the spook scenario,” Tom Price, managing director of operations, technology and business continuity at SIFMA told CNBC. “The financial services industry is essential to the economy… We have to be right all the time. The bad guys only have to right once.”
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