Security & Fraud

Fed May Enhance Bank Cyberattack Safeguards

Federal Reserve Cyber Protections

The onslaught of global cyberattacks targeted towards financial institutions may be pushing U.S. regulators to consider increased safeguards to protect the banking industry.

The Federal Reserve’s effort to draw up the strengthened protections is partly driven by the growing threat of cyberattacks and a higher frequency of digital breaches, Bloomberg reported on Friday (July 8).

According to people close to the matter who did not want to be named, the Fed is leading the charge with other U.S. agencies for the new protections that lenders may need to adopt.

Last month, the Fed used the scrutiny of its internal watchdog to find out how the U.S. central bank is policing the cybersecurity practices that are in place at the nation’s financial institutions.

The internal unit, the Office of Inspector General (OIG), which is tied to the Federal Reserve Board of Governors, will release an audit of its results in the fourth quarter of this year, and OIG disclosed that time frame in a report on projects that are underway and projects that will be upcoming.

The Fed itself was reportedly the target of more than 50 cyberattacks between 2011 and 2015.

From cybersecurity records gathered via a Freedom of Information Act request, Reuters reported that it remains unclear if the data breaches reported resulted in sensitive data being compromised or funds stolen.

The heavily redacted records represent only a small portion of the total number of cyberincidents and breaches at the Fed, because they only cover cases related to the Washington-based Board of Governors, a federal agency that is required by law to maintain public records.

“Hacking is a major threat to the stability of the financial system. This data shows why,” James Lewis, a cybersecurity expert at a Washington think tank who also reviewed the files, told Reuters.

The records show more than 50 “unauthorized access” and more than 30 “information disclosure” incidents were reported by the Fed’s national cybersecurity team because they affected the Board of Governors.

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