Cybercrime Turns on the Regulators

Cybercrime is rising across the board, and one of its top targets appears to be financial regulators.

Financial services have long been on the front line of the fight against cybercrime. However, with attacks surging during the pandemic, that fight is becoming increasingly urgent. Regulators find themselves with the task of building capacity within the sector and improving their oversight while simultaneously protecting their own systems against a growing wave of attacks.

In February the FCA revealed it was receiving 80,000 malicious emails per month. Although it blocked all known cyberattacks, it shows that regulators are not immune to the attentions of cyber criminals. Regulators present a compelling target for all the reasons that any financial institution does: they process vast quantities of highly sensitive data about individuals and organisations. In addition, the FCA is an important part of the UK’s financial infrastructure. Attacks against them are an attack against the fabric of the country’s financial systems. Its operations are critical, making them a tempting target for denial-of-service attacks, ransomware scammers and activist hackers, to name a few.

The regulator has responded by investing in cyber training for its staff. This is both to bolster its own protections and assist it as it seeks to force businesses to up their game on cyber resilience. Their commitment to tightening regulation could be seen with the online safety bill, although campaigners still complain that not enough is being done to report or counter attacks.

A freedom of information request from Kroll recently showed that the number of reported data leaks coming into the FCA had fallen even though the number of cyber-attacks had grown. For the FCA, though, cyber-attacks represent an opportunity to catch criminals. This, according to Executive Director Mark Steward, is because the pitch used by criminals is publicly available via emails. As their capacity to track and trace online scams grow, he said, the regulator was developing the ability to monitor cybercrime activity in real time.

“We have ratcheted up our proactive monitoring of the internet with a dragnet approach with the express aim to capture suspicious advertising on the same day or 24 hours after it first appears,” he said. “We have also accelerated our assessment and processing of the daily haul and we have moved from responses within days to being able to issue warnings on the same day, 24 hours after, which is now happening in most cases.”

Even so, keeping pace with the criminals, and maintaining data standards is difficult. In response to a freedom of information request, the FCA admitted to three data breaches in which data was accidentally revealed to the public or people who should not have had that information.

The tone of the admission suggests this was an accidental breach rather than the act of cybercrime, but it shows the challenges of keeping large quantities of data secure. With attacks growing both in sophistication and volume, keeping data safe from prying eyes is becoming increasingly important, but increasingly difficult.