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Cybercrime A Huge Problem On Wall Street, Study Finds

The Huffington Post  |  By Posted: 03/28/2012 11:47 am Updated: 03/28/2012 11:47 am

Financial Cybercrime

Years after the global financial crisis of 2008, there's a new problem on the minds of those working on Wall Street.

That's the conclusion of a new report from PricewaterhouseCoopers, a professional services firm based in London. PwC found that so-called cybercrime -- defined in the report as "an economic crime committed using computers and the internet" -- accounted for 38 percent of all the economic crime experienced at financial service companies last year.

That's a huge jump from 2009, when financial service firms reported no cybercrime at all.

It's worth dwelling on the cybercrime figures for a moment longer though. A cybersecurity expert at PwC told The Wall Street Journal that there probably wasn't zero cybercrime in 2009 -- it's just that financial service firms didn't know enough about the problem to realize it was happening.

Thus, it's hard to say for sure whether cybercrime has really gotten worse over the last few years, or whether companies have simply become more attuned to it.

Something similar has happened at the FBI, where investigators now have about 2,500 corporate and securities fraud cases on their books -- a 47 percent increase since 2008, a year when the importance of detecting financial misconduct became painfully clear, and the government began allocating more resources to do so.

On the other hand, there's ample evidence that some financial crimes really have spiked in recent years, as the economic downturn has made some people more vulnerable and others more willing to break the law. Even street gangs like the Bloods and the Crips have reportedly taken more of an interest in identity theft and credit card and mortgage fraud since the recession hit, according to Reuters.

And while the FBI has done more to crack down on certain kinds of financial fraud, the government is slowing down in other areas. In 2011, federal prosecutions for financial-institution fraud fell to a 20-year low, according to a recent data analysis from Syracuse University.

In any case, even if companies are more aware of cybercrime now, it doesn't mean they're all prepared to deal with it.

The PwC study found that more than a quarter of financial service firms lack the in-house resources to prevent and detect cybercrime, and almost half lack the resources to investigate it. Twenty-nine percent of financial service respondents said they'd never gotten any kind of cybersecurity training.

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