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Facing more frequent cyberattacks on the global financial system, the world’s major advanced economies are racing to bolster cybersecurity protections.
Top finance officials from the Group of Seven leading advanced economies, meeting in Japan through Saturday, are taking stock of their nations’ cybersecurity and are working on plans to improve coordination globally.
Recent cyberattacks on banks in Vietnam and Bangladesh put financial institutions and regulators on edge about weaknesses in the global financial infrastructure, including the Swift global interbank messaging service where breaches occurred.
“There are many institutions and many countries who think they can just wait for the perfect technology, a silver bullet to make these issues go away. But they’re not going away,” said Deputy Treasury Secretary Sarah Bloom Raskin, who is leading U.S. efforts to create a financial-sector cybersecurity framework among the G-7.
The latest findings include an assessment by each G-7 member of its cybersecurity infrastructure in an effort to create common security standards. Their discussions will set the stage for a G-7 cybersecurity agreement that Ms. Raskin hopes to see by October.
The Treasury Department’s latest steps within the G-7 follow years of efforts by the Obama administration to address cybersecurity concerns on a range of fronts including energy and hacking by nations. Last fall, for instance, the Group of 20 leading economies—including China and Russia—agreed that no country should support cyber-enabled theft of trade secrets and other intellectual property for commercial purposes.
Government officials acknowledge that a similar pact for financial-sector cybersecurity at the G-20 level is likely much further down the road.
“We’d have to focus on this as an issue that goes to financial stability,” Ms. Raskin said. “It would take some education. It will take some time.”
In the U.S., Treasury officials and banking regulators have been working in recent years to identify and plug holes and improve coordination. Cybersecurity has gained attention from top brass at financial firms as the sophistication and frequency of cyberattacks on financial institutions increased in recent years.
A wave of “denial of service attacks,” when a firm’s network is overwhelmed with traffic, hit major U.S. financial firms including Bank of America
and Wells Fargo
& Co. in late 2012 and early 2013. A group called the Cyber Fighters of Izz ad-din Al Qassam claimed responsibility for the attacks, which it said were to protest U.S. foreign policy.
The attacks showed financial executives the possible damage that hackers and other cybercriminals can cause. “It was a game changer,” said Bill Nelson, chief executive of the Financial Services Information Sharing and Analysis Center, an information-sharing body for financial firms. “It got everyone’s attention. They realized the importance of what the threat actors were after.” But the attacks also showed the importance of sharing information, Mr. Nelson said.
Many in the financial industry caution that the rapidly evolving nature of cybersecurity demands information sharing and cooperation between financial firms themselves, rather than government mandates and far-reaching frameworks.
“A lot of work is taking place at an industry-to-industry level where you have interdependence,” said Greg Garcia, who served as the first-ever assistant secretary for cybersecurity in the Department of Homeland Security and later led the financial services industry’s primary cybersecurity organization. “You’ll have more collaboration there than in international bureaucracies.”
“There’s a well-understood principle of cybersecurity that the more specific you get, the less relevant those questions become over time because of the evolving nature of threats,” Mr. Garcia said.
Ms. Raskin said an international framework would reflect those concerns. “The risk of being overly prescriptive is you address only a very narrow set of cyber vectors, so you have nothing in place if they morph,” she said. “We need to think of this as foundational elements that are thematic,” such as guidelines for proper cybersecurity governance and measures for recovery.
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