Beginning September 19, major banks in the United States have been targeted by the largest series of denial of service attacks in history. Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), and U.S. Bank (NYSE:USB), among others, were all systematically targeted.
Dimitri Alperovitch, co-founder of a security firm called CrowdStrike that has been investigating the attacks, told CNN Money, “The volume of traffic sent to these sites is unprecedented. It’s 10 to 20 times the volume that we normally see, and twice the previous record for a denial of service attack.”
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Although the nature of the attack means that no data was stolen, the scale and organization is troubling. An Islamist group called Izz ad-Din al-Qassam Cyber Fighters has taken credit for the attacks, solidifying fears by some U.S. Senate members — in particular, Joe Lieberman — that Iran is waging organized cyber warfare against America.
The attacks caused the banks’ websites to slow or shut down entirely for a period of time. The interruption may seem superficially minor, but sustained outages would affect millions of financial transactions a day.
More serious cyber crime concerns echo this recent attack which seems largely like a publicity stunt. In August, Bloomberg reported on a company losing $5.2 million dollars in a single day. The article fairly suggests that smaller, local and community banks are more vulnerable than large financial institutions with more robust security. All in all, some experts believe that cyber thieves steal as much as $1 billion a year from small and mid-sized bank accounts in the United States.
There are a number of attacks on record which have cost U.S. companies and the government millions — even billions — of dollars. August 2003 saw a blackout as a result of a cyber attack that cost as much as $10 billion.
Financial service companies currently spend an average of $22.9 million a year on cyber security. In order to reach a 95 percent security rate, Bloomberg estimates that they would need to increase spending to almost $300 million on average.
The U.S. government is working with major banks to ensure that sensitive financial information remains secure, but there’s a delicate line to walk when the government gets involved with banking. As president of the Internet Security Alliance Larry Clinton puts it, “the major concern is the vast regulatory structure that would be set up at the Department of Homeland Security.” It’s a debate that’s been raging between the financial industry and the government since the recent financial crisis.