Assessing cybersecurity risks and practices in the broker-dealer industry

Yolanda Trottman-Adewumi, David Kelley, Len Smuglin and Gregory Markovich

Journal of Securities Operations & Custody, 2017, vol. 9, issue 4, 302-312

Abstract: Cyber-attacks impacting the broker-dealer industry are increasingly common, causing greater financial losses and damage than ever before. Firms are employing a broad range of practices to defend against and mitigate these cybersecurity risks. This paper examines the cybersecurity risks faced by broker-dealers and common cybersecurity practices at broker-dealers. The Financial Industry Regulatory Authority (FINRA) is a US-based self-regulatory organisation (SRO) for broker-dealers with the dual mission of investor protection and market integrity. Pursuant to its mission, FINRA continues to emphasise the importance of broker-dealers understanding how to identify cyber risks and the actions necessary to safeguard their systems, data and operations to mitigate the risk of cybersecurity attacks and breaches and to protect their customers. Sources include information obtained or observed during FINRA examinations, enforcement cases, customer complaints and firm self-reported cyber events.

Keywords: Financial Industry Regulatory Authority (FINRA); broker; cybersecurity; risks; personally identifiable information (PII); hackers (search for similar items in EconPapers)
JEL-codes: E5 G2 K22 (search for similar items in EconPapers)
Date: 2017
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