Cyber crime posed the biggest challenge to listed firms last year, affecting half of stock exchanges in the world,a Capital Market report shows.
The Capital Markets Soundness second quarter 2019 report released Monday shows the vice gave banking and capital markets chiefs sleepless nights, with 89 per cent of those surveyed saying it kept then awake during the year.
Besides cyber threats, over regulation, technological changes and geopolitical stability also worried CEOs at 86 and 85 per cent respectively.
"Cyber threats in capital markets are seen to lead to manipulation of order management systems leading to incorrect feeds, false orders, corruption of trade surveillance systems thus enabling manipulative, illegal and abusive trade practices,’’ says the report.
It shows that cyber security landscape for asset and wealth management firms is also fraught with an array of threats aimed at stealing or compromising clients’ investment or personal data.
‘’With the growing adoption of wealth management applications on mobile and via cloud-based services, attacks like Distributed Denial of Service (DDOS), ransomware and phishing are equally gaining popularity,’’ rnotes the report.
According to CMA, the actions result in triggering automated rogue trading strategies, thereby increasing the chance of flash crashes.
Last year, the Nairobi Security Exchange (NSE) raised concerns about potential large scale cyber attacks on the financial market.
In June, the International Organization of Securities Commissions (IOSCO) research department and the World Federation of Exchanges office in June 2019, listed JP Morgan and Nasdaq as major stock counters attacked in recent times.
CMA has asked companies to adopt new technology including block chain, artificial intelligence and robotic process automation to protect themselves.
"For instance, sequential hashing and cryptography in blockchain systems, along with decentralized structure has made it impossible for a party to alter any data on the ledger, thus protecting client data and trade information,’’says the report.
Average expenditures on cyber crime are reported to be increasing dramatically, with costs associated with such crimes crippling to companies who have not made cyber security part of their regular budget.
The latest report by cyber security firm Serianu shows the cost of cyber crime in Kenya in 2018 was Sh30 billion, while anticipating that organizations could lose more in the coming years.
According to the report, only 1700 Cyber security skilled professionals are certified in Kenya with 60 per cent of companies set to experience a shortage of cyber security professionals this year especially at senior and mid management levels.
