Options Panelists: Algos are the New Hope — and Target — in Cyber Wars
Tracking network behavior patterns is the latest priority as IP becomes a target.
The panel — which featured a pair of two chief technologists and two additional experts in the area — covered many of the subjects hit on in Waters' full issue on the topic in April, and featured no shortage of strange realities, as well.
Firms are now sending their staff on business with 'burner' phones and laptops, rather than scrub them later. A few funds have dumped passwords entirely in lieu of swipe cards for workstation access. Nearly half of firms still don't have a proper patching program at all, according to one study. And even chief compliance officers are being caught up in phishing campaign simulations.
The old, nagging issues are still there, in other words.
But above all, the takeaways were two, and both come under the banner of newly-developed sophistication in the space.
Targeting Algos
They're not doing this for notoriety anymore; they're doing this for financial gain, and whether aiming for a trading advantage or something else, it's the IP that's valuable. - Todd Ferguson, Raymond James Financial
On the hacker side, the latest theme becoming more prevalent is the "zero-day" attack, which can operate on a firm's network without leaving any timestamp at all — essentially proving undetectable to commodity software used today.
Partly as a result of this, hackers have upped their game and two new threat vectors are emerging with respect to trading systems' code, according to Daniel Romanelli at consultancy Delta Risk LLC.
"In the last year we've seen an automated trading firm in equities being slowed down by milliseconds, occasionally, over the course of three months," he said. "Usually when that happens, your first step isn't to ask security about it; you go to your quants and developers instead, but in this case they had been hacked and were actually being traded against during those times. Other cases that have also come out around pure theft of intellectual property, stealing code for resale. It's tough to quantify the extent of this, because unlike other cyber-related activities [through FS-ISAC and other industry bodies] most firms aren't exactly announcing this to the press."
It's a significant change, as Todd Ferguson, vice president for information security engineering at Tampa, Fl.-based Raymond James Financial, put it. "They're not doing this for notoriety anymore; they're doing this for financial gain, and whether aiming for a trading advantage or something else, it's the IP that's valuable."
Containerization, Patterns
On the defensive side, Robert Cornish, chief information officer at International Securities Exchange (ISE), did note some positive news: that new entrants are developing better behavioral algorithmic tools to complement changes in cyber strategy.
"New tech companies are coming to market and grabbing share quickly from traditional technologies, with systems that model your network environment, and leverage pattern-recognition algorithms to identify differences in the way your network behaves," he said. "These go along with increased use of operating systems, a few from Linux for example, that are read-only and new technology around containerization like Docker, which uses the minimal amount of additional software to run an application, minimizing the attack vector.
Going forward, Paul Chew, from PricewaterhouseCoopers, also pointed out the benefit of these elements in dealing with extended end-points and an impending regulatory mandate, as well.
"You need tools to monitor actors that are reaching out to IP addresses on your network that aren't typical, to create a response profile to those and account for what they're rescanning," he said. "They're also important for protection of new end-points and third-party systems. That's a key element in Regulation SCI, but the most important thing is to speed things up in terms of reacting during the time from Victim Zero to Victim One. That compromise is usually within 24 hours, so the need to get this right is imperative."
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