Apple Pay a Systemic Risk? Banker Warns About Nonbank Players

From American Banker
“The growing influence of nonbank companies poses a risk to the financial system, and perhaps a national security threat, the chief executive of BB&T Corp. said.

Commenting on the impact of technology on the industry, Kelly King said that bankers should recognize the potential dangers posed by nonbank players, particularly in the payments industry.

"Think about this: If we're down the road two or three years, and three-fourths of the banks and three-fourths of the merchants are on Apple Pay or whatever system," he said at the Clearing House trade group's annual meeting in Manhattan Thursday. "If you're a smart terrorist, what better way to get in to disrupt the financial condition of the United States of America than go to one of their back rooms."

(Apple did not immediately return a reporter's call Friday. The tech giant has emphasized security in its design of Apple Pay, which adds EMV chips, tokenization and fingerprint authentication to what would otherwise be a swiped magnetic-stripe payment. Apple also requires the use of a bank-issued credit or debit card, and the company has been putting in additional security methods after the theft of celebrities' selfies from iCloud.)”

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Analyzing Bank of England's Outage

From Bank Info Security

“John Walker, director of cyber forensics for the British security firm Cytelligence, says network security is often easy for hackers to penetrate, pointing to many recent examples.

In an interview with Information Security Media Group, he singles out a suspicious "technical" issue that reportedly took down part of Bank of England's payments network earlier this week. Walker, a featured presenter at ISMG's Global APT Defense Summit in New York, says Bank of England, like many other organizations that suffer similar outages, was likely the victim of a cyber-attack. 

"What happened at the Bank of England?" he asks. "There are a number of questionable issues. You have an enormous, massively expensive system here that went down for an entire day. ... I just have some suspicions around the whole thing."

On Oct. 20, part of the Bank of England's automated system for settling high-value payments apparently failed to function, which the nation's central bank blamed on routine maintenance, according to a news report from The Irish Times. The outage lasted about eight hours, the newspaper reported.”

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UK's high value payment system Chaps goes down

From Finextra

“The Bank of England was forced to suspend the UK's real-time gross settlement system Chaps for several hours on Monday while it investigates an unspecified technical glitch.

The breakdown in service is a big embarrassment for the UK's central bank, coming in the year that the Clearing House Automated Payment System celebrated its 30th anniversary as the 'unsung hero of the financial system'.

Chaps is responsible for processing over 92% of all intra-bank payments by value in the UK, handling an average of £277bn of payments per day.”

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The Cyber-Terror Bank Bailout: They're Already Talking About It, and You May Be on the Hook

From Bloomberg

“Bankers and U.S. officials have warned that cyber-terrorists will try to wreck the financial system’s computer networks. What they aren’t saying publicly is that taxpayers will probably have to cover much of the damage.

Even if customers don’t lose money from a hacking assault on JPMorgan Chase & Co., the episode is a reminder that banks with the most sophisticated defenses are vulnerable. Treasury Department officials have quietly told bank insurers that in the event of a cataclysmic attack, they would activate a government backstop that doesn’t explicitly cover electronic intrusions, two people briefed on the talks said.”

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Ten years after the 9/11 Commission Report the Bipartisan Policy Center publishes a new terrorism situation report

From Continuity Central

“Ten years ago, on July 22nd 2004, The 9/11 Commission Report, the official report of the devastating attacks of September 11, 2001, was published. Now, the Bipartisan Policy Center has issued an updated report on the terrorism threat to the United States.

‘Today’s Rising Terrorist Threat and the Danger to the United States: Reflections on the Tenth Anniversary of The 9/11 Commission Report’ concludes that while the terrorist threat has evolved, it is still very real and very dangerous. The absence of another 9/11-style attack does not mean the threat is gone: As 9/11 showed, a period of quiet can be shattered in a moment by a devastating attack. The pressing question is whether the United States is prepared to face the emergent threats of today — and those it is likely to face in the years to come.”

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Don't Be Fooled: Banks Still Too Big to Fail

From truthout

‘Analyzing a government report is like eating and digesting a meal — better to take it slowly than gobble quickly and suffer the possible consequences.

Example: last Thursday’s report from the Government Accountability Office (GAO) on whether or not large financial institutions were still perceived as “too big to fail.”

The immediate takeaway by many in the media, government and investment community was that the need for a taxpayer subsidy like the bailouts of 2008 “may have declined or reversed in recent years” and, in the words of Mary J. Miller, the Treasury Department’s under secretary for domestic finance, “We believe these results reflect increased market recognition of what should now be evident – Dodd-Frank ended ‘too big to fail’ as a matter of law.”

But with just a little time to digest the GAO’s findings, much of the response has shifted to, “Not so fast.” ’

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