Asset management technology news | Industry task force reports on cyber threat to market infrastructure

An industry task force has released a white paper on Cyber ​​Threat Data Protection and Validation for Financial Market Infrastructure (IMF).

The working group, sponsored by the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions (IPPC-IOSCO) Specialist Group on Cyber ​​Resilience, examines how MFI firms protect and use their data and make recommendations that MFIs should consider to improve their cybersecurity.

The project includes cyber resilience specialists from The Depository Trust & Clearing Corporation (DTCC), Euroclear, the Federal Reserve Bank of New York, LCH, TMX Group and the Reserve Bank of Australia,

The task force finds that the recovery capabilities of many organizations have been designed to protect against physical, not cyber failure, and in some cases may not be effective at protecting against cyber threats.

Although many organizations target a two-hour recovery time as their primary goal, data integrity factors often require tradeoffs between recovery speed and recovery accuracy.

In addition, a high level of interconnectivity between enterprises reinforces the potential danger posed by a compromise on data integrity.

In this context, recovery procedures after a data integrity breach require a high level of confidence in the available backup data, the paper concludes, as well as good coordination between companies within the IT ecosystem. .

Based on the task force’s analysis, the paper recommends that companies focus on three main issues.

Each MFI should identify the most feasible tools from a design perspective and focus on implementing the tools that offer the most impact and coverage.

Second, businesses should work with other businesses to identify the best catering strategies for their business.

Third, they need to analyze their legacy technology to target critical points of vulnerability and interdependence and identify areas where they can improve resilience as the technology advances.

The working group finds that in the face of a cyber attack, traditional data replication strategies run the risk of propagating corrupted data to backup databases. To meet this challenge, the working group set out to identify tools to improve data retrieval and validation.

The paper highlights the need for greater industry collaboration to drive this program, including a common focus on design principles for housing critical data sets in data bunkers and third-party sites. This includes the development of standards to assess and minimize third party risks to the ecosystem and the use of industry-wide cyberstress testing exercises overseen by an independent party.

Rachel Tyler, Executive Director of Business Resilience at DTCC and Chair of the Industry Working Group, says: “MFIs operate based on the use and trust of data, and to operate effectively, MFIs must keep their transaction data and data and application data protected and intact. Businesses need to think about how they can continue to improve data protection and validation capabilities to better defend themselves and recover from cyber threats. “

Laure Molinier, director of crisis management and disaster recovery testing at Euroclear, adds: “As part of our business resilience program, [Our] The goal is to continuously improve protection, detection, response and recovery procedures against extreme scenarios such as major data integrity issues.

“As a trusted financial market infrastructure, we must play a leading role in defining recovery protocols together with the market in scenario analyzes and joint testing.”

Rob Cairns, Chief Technology Officer at LCH, said: “Convening this working group is an important step in securing and strengthening the resilience of financial market infrastructure providers. The findings of the White Paper demonstrate the need for increased collaboration and standardization in the approach to data protection. We look forward to continuing to contribute to the discussion and action on this important issue. “

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