News Column

Fed Should Help Secure Banks Against Cyber Threats, Says Aristotle Halikias

May 22 2013 12:00AM

Marketwire

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CHICAGO, IL -- (Marketwired) -- 05/22/13 -- As an active member of the banking industry, Aristotle Halikias is vigilant about staying up-to-date on security concerns. Bloomberg recently posted an article expressing banks' urges for more protection by the Federal Reserve. They feel that the Fed should spearhead efforts to defend against cyber attacks.

The article references minutes from a Federal Advisory Council meeting on February 8. Council members said that "the Fed should collect and distribute threat information to lenders, law enforcement, securities exchanges, and clearinghouses." Cybersecurity poses a significant threat to the financial industry and system. Several attacks have already occurred. Records show that the Treasury Department and National Security Agency have provided assistance.

The Fed already has the ability to share sensitive information without jeopardizing commercially sensitive data. Bankers want the Fed to offer "advisory services as a trusted interlocutor between banks and other government agencies in relaying selected threat information to the banking community," states the article. They stress the need for a central source of information on attacks. Coordination between lenders, regulators, and intelligence agencies would make this possible. Advisement from the Fed to the Federal Bureau of Investigation and Homeland Security would reduce instances of duplicate regulations.

Cyber attacks have the ability to disrupt banks, telecommunications, utilities and other services points out the article. Congress already failed to pass cybersecurity legislation last year, so U.S. lawmakers are renewing their efforts. The article states, "Banks have been targeted by attacks known as distributed denial-of-service, or DDoS, in which hackers flood a computer system with information to shut it down." Symantec, the security company investigating these attacks, found that not only have these attacks damaged websites, but they have gone deeper.

Attacks have increased in severity over the years from causing temporary website outages to robbery. In an incident involving a European bank's automated teller machines, $9 million was stolen over two hours from machines in 46 cities, according to Symantec. The article sites that "tens of millions of dollars were stolen from a dozen European banks in the past year in this way." Even the Fed itself was attacked. The website they use to stay in touch with banks during emergencies was breached. Responsibility was claimed by Anonymous, a hacker-activist organization. According to the Richmond Fed, which runs the information-technology office, critical operations were not affected.

"In today's technological environment, the threat for cyber crimes against financial institutions has become a major risk," asserts Aristotle Halikias. "Although banks continue to be diligent in security and risk management practices, the increasing sophistication of cyber criminals will undoubtedly lead to an increase in cyber crime. The Federal Reserve should take the lead in defending the financial industry from cyber attacks. They should coordinate between banks, regulators, and intelligence agencies to protect the financial system and set up a central source of information on attacks." Aristotle Halikias feels that this would benefit the financial system and increase awareness about attacks.

ABOUT:

Aristotle Halikias is Chairman of the Board of Republic Bank of Chicago. The company works in the areas of community and commercial lending as well as real estate financing. It provides the Chicago area with creative financial solutions and offers 16 different branch locations. The bank offers online banking options for its members. He is also executive director of the Halikias Family Foundation, a nonprofit organization. The Foundation supports Hellenic arts and culture in Greece and throughout the United States.



Source: Marketwire


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