Wednesday, 18 September 2013

10 Minute Hack for NASDAQ

First it was the empty threat to NYSE by hacktivists, now it seems that NASDAQ has come under the attention of the media with a weakness exposed by a Swiss hacker. The world’s first electronic stock market has been shown to take no more than 10 minutes to infiltrate. In light of the global hacking operation which brought losses worth millions of dollars last year to a number of institutions, among which 30 SQL servers from NASDAQ, it was only natural that the news will raise fresh concerns over the security of the stock markets. Whilst NYSE has refused to comment on the so-called threat, back in 2011,  or on their security procedures, NASDAQ seems to have taken action at the advice of Ilia Kolochenko and promptly repaired the vulnerability.

In August 2013, the US government wanted to draft a plan to fight against stocks exchange hackers, but the experts say this may not be of much help. The plan would entail stress tests of the stock exchange core technology, regular system reviews for identifying vulnerabilities and contingency plans in case of breaches. However criticism from cyber security experts state that all these efforts are still too weak to actually bring any meaningful protection. On the other side, the financial institutions have said that the scheme would out-cost the benefits. Moreover, large infrastructures that stock markets use are so intricate and fast-changing that it would be impossible to create protection measures for each one, let alone enforce them. Nothing more has been heard in the media since.

Does that mean that no measures can be taken to protect the security of the markets? Are these systems to be left as prey "to the hacker's imagination"? NASDAQ's technical glitch in 2013 was reported as nothing more than a software fault. Statistics show that companies will deny they've experienced a cyber attack . Does that present unsafe prospects for trade, in the near future? A KPMG report has identified cyber attacks as the next threats that can affect the UK banking industry, as opposed to another financial crunch. Which is unsurprising as we already know that when the stock market sneezes, the entire financial world catches a cold. 

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