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Financial Services Law Insights and Observations

Hsu discusses cybersecurity risks to financial sector

Privacy, Cyber Risk & Data Security Bank Regulatory Federal Issues OCC

Privacy, Cyber Risk & Data Security

On August 2, acting Comptroller of the Currency Michael J. Hsu delivered remarks before the Joint Meeting of the Financial and Banking Information Infrastructure Committee and the Financial Services Sector Coordinating Council focusing on cybersecurity risks to the financial services sector. Hsu called for collaboration among public and private sector stakeholders to safeguard the financial services sector. Hsu noted that the financial services sector has done “a good job of building cyber defenses and working with law enforcement and the regulatory community to guard against attacks,” but warned that “we cannot be complacent.” He noted that the OCC has recently observed increases in cyberattack frequency and severity against financial institutions and service providers, and that cyberattacks, such as ransomware, have risks beyond financial loss. Hsu added that “disruption to financial services can significantly impact banks’ abilities to deliver critical services to their customers and has the potential to affect the broader economy.” He also stressed that banks “need to assess both the potential impact cyber incidents may have on their own institution and the impact a cyber disruption may have on the broader financial system.” He also stated that cybersecurity breaches have been caused or intensified by the failure to have effective controls in three areas: (i) authentication; (ii) systems configuration and patch management; and (iii) cyber response and resilience capabilities. Hsu concluded by emphasizing the OCC’s commitment “to working with CISA, our financial sector counterparts, and other sectors to ensure that we have strong partnerships across the government.”