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Risk Management

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Internet Attacks Wake Up Financial Firms to Security

Responding to the recent spate of hacker attacks on major commercial Web sites, many financial firms are evaluating their Internet security.

Responding to the spate of hacker attacks that were launched in February against the major commercial Web sites, including Yahoo, eBay, Amazon.com and E*Trade—the nation’s second largest online brokerage firm—many financial firms are evaluating their Internet security.

“Every financial firm is doing a security review as to how they could survive this,” says Rich Cardone, vice president of marketing for Hydraweb Technologies, a New York City-based firm specializing in load-balancing technology and whose clients include online brokers such as DLJ Direct and Digitrade, as well as market data providers like Reuters and Bridge. “If they did survive it, and they weren’t the one attacked, they are now wanting to make sure their infrastructure can survive this if they’re attacked. A lot of our customers have e-mailed and called us... because they’re going through these audits,” says Cardone.

Using a technique called distributed denial of service, the hackers hijacked hundreds of thousands of computers around the Internet and planted a program instructing them to flood the target sites with torrents of valid requests.

But several major financial institutions, including Citicorp, Depository Trust Co. and Pershing, are prepared for this type of cyber crime. Instead of waiting for an incident to happen, they formed a Financial Services, Information Sharing and Analysis Center (FS/ISAC) which lets members report information about bugs, attacks, viruses or threats, anonymously, to its database. The FS/ISAC maintains a secure network, which cost $1.5 million, administered by Global Integrity, an information security company based in Reston, Va.

Though the FS/ISAC became operational in October, its creation dates back to October 1997, when the President’s Commission on Critical Infrastructure Protection reported that critical parts of the U.S. infrastructure, including financial services, were vulnerable to intruders. Being proactive, the financial industry formed the ISAC under the eye of the Treasury department that allowed the information to be submitted anonymously to encourage the banks to be forthcoming.

According to a CNN news story, computer experts at some of the nation’s largest financial institutions received warnings, at least eight times, about pending Internet threats.

The urgent warnings, sent by e-mail and pager, warned that attack programs had been discovered on powerful computers nationwide. But participating banks weren’t allowed to share this information with the government.

For further information, go to www.globalintegrity.com. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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