May 26, 2022

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US banks ordered to report major cyber incidents within 36 hours – Security – Finance

US banking regulators on Thursday finalised a rule that directs banks to report any major cyber security incidents to the government within 36 hours of discovery.

Separately, the banking industry said it had successfully completed a massive cross-industry cyber security drill that aims to ensure Wall Street knows how to respond in the event of a ransomware attack that threatens to disrupt a range of financial services.

The developments highlight the growing threat large-scale cyber incidents pose to financial stability.

“The financial services industry is a top target, facing tens of thousands of cyberattacks each day,” said Kenneth Bentsen, CEO of the Securities Industry and Financial Markets Association, which organized and led the industry drill.

The new bank rule stipulates that banks must notify their primary regulator of a significant computer security breach as soon as possible, and no later than 36 hours after discovery.

Banks also must notify customers as soon as possible of a cyber security incident if it results in problems lasting more than four hours.

The new requirement applies to any cyber security incidents that are expected to materially impact a bank’s ability to provide services, conduct its operations or undermine the stability of the financial sector.

The rule was approved by the Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency.

It sets explicit expectations on how quickly banks must make cyber security breaches known, as regulators look to catch up to the rapidly growing role technology is playing in every type of banking service.

Previously, there was no specific requirement for how quickly a bank must report a major computer breach.