Title: Financial Services
Course: 2016FA-MCO-115-401 > Section: Module 17: Financial Services

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Financial Services

The Financial Services Sector makes it possible to get a loan, have a bank account, pay other people, and make investments. The sector is vital to the United States economy and to the economy of the world.

Financial institutions provide many products and services for the United States. There are financial institutions varying in size from very large (with multi-trillion dollar assets), to the very small bank serving a small town or communities.

The United States Department of Treasury is the Sector Specific Agency (SSA) for the Financial Services Sector. The Department of Treasury works closely with those in the private sector to ensure the security, safety and resiliency of financial services. The sector was formerly called the Banking and Finance Sector until 2013 when Presidential Policy Directive 21 changed its name [1].

This Sector Has Three Main Goals:

1. “To achieve the best possible position in the face of a myriad of intentional, unintentional, manmade, and natural threats against sector’s physical and cyber infrastructure.
2. To address and manage the risks posed by the dependence of the sector on the Communications, IT, Energy, and Transportation Systems Sectors.
3. To work with the law enforcement community, financial regulatory authorities, the private sector, and our international counterparts to address threats facing the financial services sector”.

[2, p. 13]

Institutions in this sector are organized and regulated according to the services that they provide. There are over 18,800 depository institutions that are federally insured. There are also investment companies, investment advisors, insurers (or providers of risk transfer), and credit and financing institutions [1].

Regulation

The Financial and Banking Information Infrastructure Committee (FBIIC) is made up of 17 financial sector regulatory agencies and falls under the jurisdiction of the President’s Working Group on Financial Markets. The FBIIC is tasked with helping financial regulators better communicate and coordinate to improve resiliency of the financial sector. Part of this work involves promoting cooperation and partnership between the private and public sectors. “Following the attacks of September 11, 2001, the FBIIC was created and began an organized effort to examine the financial sector’s resilience. The process has continued and matured over the years to include physical and cyber-based components of the sector as well as dependencies on other critical sectors” [2, p. 21].

Dependencies/Interdependencies

The Financial Services sector is depended on by all the other sectors, since the failure of the United States economy would severely detract from all the sectors’ ability to perform. The Financial Services Sector depends on the Energy, Information Technology, Transportation, and Communications sectors.

Threats

The Financial Services Sector must diligently work to mitigate threats of both a cyber and physical nature.

“Because cyber threats are a significant concern of the sector, the Treasury Department works with the U. S. Computer Emergency Readiness Team (US-CERT) to identify the latest threats to cyber infrastructure and disseminates threat information within the sector” [2, p. 24]. Best practices that combine the latest in breach detection with rules of data use, standards, redundancy, layers of protection, and security go a long way in preventing cyber attacks.

The financial sector has a long history of being prone to the threat of the human insider. Insider fraud must be prevented and typically background checks, identity confirmation, and credit history checks are the most commonly used tools in mitigating this threat.