The head of the Federal Reserve Bank is warning that the rising number of cybersecurity attacks is creating a major risk for financial services institutions.
Speaking before an international conference in Berlin, Atlanta Fed President and CEO Dennis Lockhart notes that major U.S. banks have ‘experienced an escalating incidence of distributed denial of service attacks’ that were coordinated by ‘sophisticated, well-organized hacking groups.’ Lockhart notes that while these attacks have not resulted in the loss of data or the removal of funds from accounts, the threat posed by the new wave of cybercrime cannot be ignored.
‘Banks have been defending themselves against cyberattacks for a while, but the recent attacks involved unprecedented volumes of traffic – up to 20 times more than in previous attacks,’ he says. ‘Banks and other participants in the payments system will need to re-evaluate defense strategies. The increasing incidence and heightened magnitude of attacks suggests to me the need to update our thinking.’
Lockhart points to recent remarks made by an official of the U.S. Department of Homeland Security for financial services companies to ‘pool infrastructure resources to help each other mitigate the effects of cyberattacks and work together on security issues’ might be the best route to halt the rising level of cybersecurity disruptions.
‘Collaborative efforts should be oriented to building industry resilience,’ he says. ‘Resilience measures would be similar to those put in place in the banking industry to maintain operations in a natural disaster – multiple backup sites and redundant computer systems, for example.’