BOCA RATON, Florida (Reuters) - Cyber security is emerging as one of the biggest threats for exchange operators as hackers become more sophisticated in their efforts to disrupt the global financial system, a group of exchange leaders told an industry conference.
More than half of the world’s exchanges were hit by cyber attacks in 2012, according to a paper released last year by the World Federation of Exchanges Office and the research department of the International Organization of Securities Commissions.
“We are worried a lot and we are far more worried now than we were just a couple of years ago,” Magnus Bocker, chief executive of Singapore Exchange Ltd, said during a panel discussion at the Futures Industry Association conference in Boca Raton, Florida on Wednesday.
Bocker said spending on cyber security is on the rise, but said exchanges need to do a better job of sharing information with each other on effective ways of combating cyber criminals.
At Nasdaq OMX Group, the number of cyber attacks aimed at disrupting the exchange’s online network actually fell by 30 percent to 35 percent in the latter half of 2013, possibly due to a thawing of relations between the United States and Iran, Chief Executive Officer Robert Greifeld said. That said, Nasdaq is not letting its guard down, he added.
“You obviously have to be very vigilant and you will never be secure and you have to walk around paranoid,” he said.
Nasdaq has been adding former military and government security experts to its cyber security team, as well as working closely with the U.S. Federal Bureau of Investigation to identify potential threats, Greifeld said.
Cyber criminals targeted Nasdaq’s community forum website last July and gained access to the email user names and passwords of the members of the site, which took two days to come back online. In 2010, hackers infiltrated the exchange’s computer systems and installed software that allowed them to spy on the directors of publicly held companies, Reuters reported.
The interconnectedness of the mostly electronic markets makes the system more vulnerable, and exchanges need to work with their customers to make sure they are protected from attacks as well, said Jeffrey Sprecher, head of New York Stock Exchange owner IntercontinentalExchange Group.
“The scary thing for us is not what we control, because we all are focused on it,” he said. “The reality is we all have common customers that are connected to us, that are connected to each other.”
He said the chief executive of a high-frequency trading firm called him just last week to ask for help in guarding against cyber criminals, adding that the massive data breach at retailer Target Corp last year came through a vendor, and not directly into Target’s system. That breach led to the theft of about 40 million credit card and debit card records and 70 million other records of customer details.
Andreas Preuss, CEO of Germany-based Eurex, predicted that cyber security would have a much more prominent role at next year’s Futures Industry Association conference.
“Hopefully not on the back of something that has just happened,” he said.
Reporting by John McCrank; Editing by Jonathan Oatis