July 08, 2009

System Security at Banks

Recently an IT executive at a top US bank was arrested for stealing the companys proprietary trading software before moving to another employer. Apparently, there is a possibility of the entire trading platform to be stolen and if actually used by rival firms would result in losses of millions of dollars for the bank. The high-speed trading system used for taking equity and commodity markets positions is an asset to the bank as it assists in making trades ahead of the competition and thereby benefit from it. But if the system falls in the hands of rival firms, the banks competitive edge is eroded. Not only this, but if the system falls in the wrong hands for e.g. terrorists then the entire US financial system might be in danger !

The suspect quit the bank to move to a start-up company offering 3 times his existing salary. It is very likely then that he would have used the stolen trading application to benefit his new employer. Upon discovery of the theft, the new employer suspended the suspect. This event should be an eye-opener to banks and financial institutions to beef-up their IT security and take stringent measures to protect their data and systems agaisnt theft or mis-use and guard the interest of all the stake-holders in the financial markets.

1 comment:

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