Cyber Security Threats are on the Rise
New technologies have made banking practices easier for the consumer and institutions, but it has also made life much simpler for white-color crooks as well. For as long as there has been money, there has been crime, and the virtual world is opening up new opportunities for frauds, thieves, and money launderers to get what isn’t theirs. In a special report, Scott Cohn of CNBC takes a look at what type of cyber crime may be waiting for us in 25 years.
Insider trading once required a human source inside a company, someone willing to risk their occupation and freedom for profit. Now, experts warn that hackers can access information from a company’s database in the cloud. Once access is gained, the information can be sent and received via encrypted and anonymous channels, with no indication a breach ever occurred.
According to a study by McAfee and the Center for Strategic and International Studies, cyber-crime is already costing the U.S economy as much as $120 billion a year. “Given the extent to which the capital markets have become increasingly dependent upon sophisticated and interconnected technological systems, there is a substantial risk that a cyber attack could cause significant and wide-ranging market disruptions and investor harm,” stated SEC commissioner Luis Aguilar, in a call for the agency to establish a cyber security task force.
To combat the growing threat, the Justice Department has asked the courts to ease limits on search warrants, enabling prosecutors to search computer servers in any location. As the crimes become more sophisticated, law enforcement officials have adopted a range of new strategies, such as spyware and specialized surveillance tools. However, the article suggests that the officials’ main weapon in identifying fraud is tried-and-true police work, using undercover agents and confidential informants.
Institutions will need to match law enforcement efforts by providing customers with risk management solutions that ensure all transactions are secure and serve the interests of both borrowers and lenders.