The National Security Agency, a secretive arm of the U.S. military, has begun providing Wall Street banks with intelligence on foreign hackers, a sign of growing U.S. fears of financial sabotage.
The assistance from the agency that conducts electronic spying overseas is part of an effort by American banks and other financial firms to get help from the U.S. military and private defense contractors to fend off cyber attacks, according to interviews with U.S. officials, security experts and defense industry executives.
The Federal Bureau of Investigation has also warned banks of particular threats amid concerns that hackers could potentially exploit security vulnerabilities to wreak havoc across global markets and cause economic mayhem.
While government and private sector security sources are reluctant to discuss specific lines of investigations, they paint worst-case scenarios of hackers ensconcing themselves inside a bank's network to disable trading systems for stocks, bonds and currencies, trigger flash crashes, initiate large transfers of funds or turn off all ATM machines.
It is unclear if hackers have ever been close to producing anything as dire, but the FBI says it has already helped banks avert several major cyber attacks by helping identify network vulnerabilities.
NSA Director Keith Alexander, who runs the U.S. military's cyber operations, told Reuters the agency is currently talking to financial firms about sharing electronic information on malicious software, possibly by expanding a pilot program through which it offers similar data to the defense industry. He did not provide further details on his agency's collaboration with banks.
Alexander said industry and government were making progress in protecting computer networks, but tremendous vulnerabilities remained. The four-star Army general noted companies that have suffered damage from hackers, such as Google Inc, Lockheed Martin Corp and Nasdaq OMX Group, had among the best security systems in the world.
If they're getting exploited, what about the rest? We have to change that paradigm, Alexander said.
NSA, which has long been charged with protecting classified government networks from attack, is already working with Nasdaq to beef up its defenses after hackers infiltrated its computer systems last year and installed malicious software that allowed them to spy on the directors of publicly held companies. A Nasdaq spokesman confirmed the investigation into the attack continues, but declined to give further details.
Hackers have targeted Wall Street investment banks for more than a decade, but recent attacks have been more sophisticated, coordinated and deliberate.
That makes security experts suspect the hackers were backed by countries such as China, and fueled concerns that cyber terrorists might someday use malware to wipe out crucial data and cripple networks across the financial sector.
China has repeatedly said it does not condone hacking, but experts say the evidence continues to mount against Beijing. In June, Google blamed China for an attempt to steal the passwords of hundreds of email account holders, the second major breach the Internet giant has blamed on the Chinese.
Earlier this year, security firm McAfee said hackers working in China broke into the computer systems of five global oil and gas companies to steal bidding plans and other critical proprietary information.
We know adversaries have full unfettered access to certain networks, Shawn Henry, executive assistant director of the FBI, said without identifying the adversaries.
Once there, they have the ability to destroy data, he said in an interview. We see that as a credible threat to all sectors, but specifically the financial services sector.
The FBI has helped banks avert several potential attacks by alerting them to vulnerabilities in their computer networks, and by flagging possible hackers before they struck, he said.
Security experts interviewed by Reuters declined to identify any banks that may have data compromised, citing promises of confidentiality to clients, colleagues and employers that they would not to discuss the matter publicly.
Representatives of Wall Street's biggest banks including Bank of America Corp, Citigroup Inc, Goldman Sachs Group Inc and JPMorgan Chase & Co either declined to discuss security issues or were not available to comment.