- Financial-company CEOs are increasingly concerned about cyberattacks on the financial system.
- David Hunt, head of investment management at Prudential, highlighted the risk at the Milken Institute Global Conference.
- Other CEOs, including JPMorgan’s Jamie Dimon, have suggested cyber attacks are a top risk.
The CEOs of some of the top financial institutions in America are increasingly worried about the risk of a cybersecurity attack on the nation’s financial system.
Speaking at the Milken Global Institute, David Hunt, CEO of Prudential Global Investment Management, was the latest executive to highlight the risk.
“The next crisis is going to come from a different place,” Hunt said.
“I think it’s going to come from technology and cyber. If I were looking for the thing that worries me the most, it would be an actual attack on the infrastructure of the financial markets that really bursts into it and creates a shutdown of the major pipes we use to do business.”
Several other Wall Street institutions have also warned of the risks of a cyberattack. In his 2019 annual letter to shareholders, JPMorgan CEO Jamie Dimon said cybersecurity “may very well be the biggest threat to the US financial system.”
He added: “I have written in previous letters about the enormous effort and resources we dedicate to protect ourselves and our clients.”
The company has stepped up its cybersecurity efforts after a 2014 cyberattack impacted 76 million households and 7 million small businesses. The bank said there was no evidence that its customer’s financial data had been accessed.
At the time, JPMorgan spent $US250 million on cybersecurity – now it spends $US600 million a year. It has more than 3,000 employees engaged in the effort and the bank recently tapped its top cyber executive to run global technology for retail banking.
Other Wall Street CEOs are also expressing concern. In their April testimony to Congress, aside from Dimon, the CEOs of Goldman Sachs, Morgan Stanley, and Bank of America also cited cyberattacks as the top risk.
Despite these proclamations, there is evidence that many firms, both financial and non-financial alike, may not be prepared for an attack. A study conducted by the Ponemon Institute noted that 77% of the firms surveyed do not have formal cyberresiliency plans.
A majority of the study’s 2,800 respondents cited a lack of investment in AI and machine learning as the biggest barrier. The second was a lack of qualified personnel.
Despite the risks, Dimon also noted in his letter that there are reasons to be more optimistic as more attention is focused on the issue.
“The good news is that the industry (plus many other industries), along with the full power of the federal government, is increasingly being mobilized to combat this threat,” he said.
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