Rising cybersecurity threats are pushing big banks to do something that doesn’t come naturally for these secrecy-steeped institutions: share information with one another.
This month, security officials from Wall Street financial firms, including Morgan Stanley and Goldman Sachs Group Inc., are expected to meet with researchers from the Polytechnic Institute of New York University to discuss the creation of a new type of center that would sift through mountains of bank data to detect potential attacks, people familiar with the situation said.
At the same time, Bank of America Corp. has begun hosting experts from other major banks at quarterly informal roundtables, in which the rivals try to devise solutions to cybersecurity threats, according to other people.
Both initiatives are designed to encourage banks to work together to better protect against hackers, whose efforts to shut down electronic operations and steal money or customer data pose a growing concern for the industry. Sony Corp., the Central Intelligence Agency and Citigroup Inc. are just a few of the firms that cyber-rogues have targeted over the past year.
Online attacks have increased sharply over the past two years and financial institutions are among the most likely targets, according to a new survey by PricewaterhouseCoopers LLP, the consulting firm. Avivah Litan, an analyst with Gartner Research, expects financial companies to increase spending on fraud detection and customer authentication systems by as much as 12%, to $1 billion, over the next two years—a record.
While many bank officials agree with the information-sharing in principle, some are concerned that doing so could provide rivals with too much insight into their operations.
At the NYU-Poly meeting, for instance, some bank officials are expected to make the case that banks should scour their own data internally, rather than provide information to outside researchers, people familiar with the matter said.
Representatives for Morgan Stanley and Goldman Sachs declined to comment.
“The mentality of the banks has been, ‘Let’s do everything internally because we don’t want to give anything away,’ ” said Peyman Mestchian, a managing partner with Chartis Research in London.
But hackers are forcing banks to abandon that old go-it-alone mindset in favor of a more-inclusive approach, executives said.
“We realized that just as the fraudsters collaborate with each other, we as an industry must collaborate,” said Keith Gordon, a Bank of America senior vice president of security.
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