Police chief: Very strong chance of City cyberattack

There is a "very strong likelihood" that Islamist terrorists such as Isis will launch a cyber attack on financial institutions, the head of the City of London police has warned.

More needs to be done to protect the Square Mile, said Adrian Leppard, commissioner of the City force, which is strengthening ties with the New York District Attorney's Office to bolster defences in both financial centres. From early next year, the district attorney and the City police will deploy staff permanently in each other's offices.

Clouds over the City of London
Gregory Warran | Flickr | Getty Images
Clouds over the City of London

As online threats race up national security agendas and governments look at ways of protecting their national infrastructures a cyber arms race is causing concern to the developed world.

Benjamin Lawsky, head of the New York Department of Financial Services, admitted this summer that he was concerned about the vulnerability of the US financial system when he raised the prospect of an "Armageddon-type cyber event".

Before a joint conference on cyber security in Manhattan on Wednesday with Cyrus Vance, the New York district attorney, Mr Leppard expressed similar fears for Britain.

"We look at terrorism and you think . . . if global trading stopped that would have an enormous impact on western society, global society . . . at the heart of capitalism," the commissioner told the Financial Times.

"There could be a very serious impact to the financial institutions of the world through a cyber attack and I think it's a very strong likelihood that it will happen one day in the future, which is why we've got to push back and take action now before it happens," Mr Leppard said.

Singling out Islamic State of Iraq and the Levant, known as Isis, as a potential perpetrator, the commissioner said western society needed to find a way to balance the benefits of technological progress with the "huge harm" it could wreak on financial markets.

"There'll be evidence to suggest that all of the stock exchanges in the world have been breached in the last 10 years, Nasdaq, London Stock Exchange, all of them," he said.

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JPMorgan Chase, the biggest US bank by assets, last month became the latest victim of a cyber breach which compromised the names, addresses, telephone numbers and emails of 76m households across America. In the UK, Barclays and Santander have also fallen victim to smaller scale attacks.

Read More Discovery of JPMorgan cyberattack aided by company that runs race website for bank

Mr Leppard said the "biggest challenge" for police and government was to establish the true scale of cyber crime, given that banks and businesses often absorb the costs in order to avoid alarming customers and to safeguard their reputation.

The City police force is working with the banking sector on the formation of a new intelligence-sharing hub, due to start meeting early next year, but the commissioner suggested that accessing this information was never going to be easy.

"Will we ever get the financial institutions to report to us? I think it's going to be difficult and I think we are going to have to think about how do we encourage that?" he said.

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One option under consideration by the attorney-general is new Bribery Act-style legislation compelling companies to protect against economic crimes such as cyber breaches, fraud and money laundering, or face prosecution.

Pointing to the US's tougher regulatory requirements for defending against financial crime, Mr Leppard suggested the UK should take the same approach.

"There is a similar argument it could be said for economic crime and financial crime to say that if you have allowed your system to be breached or accessed . . . could be an offence to that company with a corporate responsibility held by the board," he said.