Newspaper article International New York Times

At Finance Companies, Inside Threats Loom Large

Newspaper article International New York Times

At Finance Companies, Inside Threats Loom Large

Article excerpt

A report recommended that all brokerage firms assess their security and review the safeguards put in place by their vendors.

The online attack on Sony Pictures Entertainment in the fall that the federal authorities linked to the North Korean government raised alarm bells about the hacking threat posed by foreign governments. But brokerage firms based in the United States remain most concerned about an attack carried out by a loose band of hackers or employees with a grudge.

A report released Tuesday by the Financial Industry Regulatory Authority, the industry's self-monitoring organization, said a study of about 20 brokerage firms found the threat of an online intrusion by a nation or a terrorist group ranked near the bottom of the industry's concerns.

Worries about state-sponsored breaches were highest at big investment banks. But few of the largest firms questioned by Finra put such attacks at the top of their list.

All the firms said they had little concern about a hacking carried out by a competitor.

The results of the study were included in a Finra report that focused on best practices that brokerage firms should enact to prevent serious attacks that can compromise a customer's personal and financial information. The organization conducted the survey last year to better understand what brokerage firms, both large and small, are doing to guard against a serious breach.

In another sign of just how important the threat of an intrusion has become for the financial services industry, the Securities and Exchange Commission issued its own report on Tuesday that examined how prepared Wall Street investment banks and brokerage firms were to repel hackers bent on gaining access to their digital networks. That examination of more than 100 registered firms found that the overwhelming majority "have been the subject of a cyber-related incident. …

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