Fed Adds Fuel To The Cybersecurity Fire

Comments made by Kansas City Federal Reserve President Esther George at a conference today [October 12] will do nothing to instill confidence among an already hesitant public with the fight against cyber criminals and in digital payments networks.

George did not address the U.S. economy but did state that cybersecurity threats are on the rise in payments networks in the U.S, according to Fortune. George also stated that these threats were undermining consumer’s willingness to use new payments technologies.

In February of this year, cybercriminals were able to hack into major U.S. banks, and $81 million was stolen from the New York Fed when hackers penetrated the SWIFT international payments network.

According to George: “We must keep pace with the rapidly evolving and expanding risks that threaten the payments ecosystem.”

President Barack Obama addressed the growing problem of cybersecurity at the G20 international summit in China. The President told the media: “[We] cannot have a situation where this becomes the wild, wild West, where countries [that] have significant cyber capacity start engaging in … unhealthy competition or conflict through these means.”

Two task forces that include private and public officials are currently working on ways to make payments in the U.S. faster and with more robust security features.

Announced on October 4, the Federal Reserve is beginning a review of 19 proposals from two national payment industry taskforces charged with identifying potential a faster U.S. payments system. There are close to 500 members in the two taskforces, one of which focuses on faster payment capabilities while the other is considering how to enhance security in payment systems. The member of the two groups include representatives of financial institutions, consumer groups, payment service providers, fintech firms, businesses, and government agencies.