Over the past 10 years, SIFMA has coordinated a series of industrywide resilience exercises known as Quantum Dawn.  These exercises provide a forum for financial firms, regulatory bodies, central banks, government agencies, law enforcement, information sharing bodies and trade associations to respond to simulated cyber and/or physical attacks.

This week, SIFMA held its Quantum Dawn VII cybersecurity exercise, which simulated a scenario with a data destruction event at a critical third-party widely used by the global financial sector to trade in the Treasury and repo markets and hosted in the cloud.  As the scenario progressed, it was discovered that the cause of the outage was due to an issue with the third-party.  The exercise engaged over 1,000 participants from more than 150 public and private sector institutions in over 20 countries around the globe, including financial firms, central banks, regulators, and law enforcement entities.

Cyber resiliency is among the highest priorities for the financial services sector, and our industry has and continues to commit vast resources to defend, mitigate and manage the risks posed.  SIFMA and its member firms regularly engage in industry wide testing to develop and enhance the financial services sector’s cybersecurity resiliency as the threat and threat actors are always evolving.  Critical to these efforts is our partnership and real-time engagement with government partners to protect the financial system and broader economy.  Our sister trades—AFME in Europe and the UK and ASIFMA in Asia—share our commitment to cyber preparedness.  SIFMA, in its crisis coordination role, led the exercise, which included participants from SIFMA, AFME and ASIFMA member firms, as well as public and private sector crisis teams across the globe.

Quantum Dawn VII emphasized global cross-jurisdiction information sharing and coordination between financial firms, central banks, regulatory authorities, trade associations and information sharing organizations.  It was designed to incorporate lessons learned from prior Quantum Dawn exercises and recent geopolitical events, third-party outages, and operational failures and to exercise the sector’s ability to respond to and recover from an extreme global cybersecurity incident over a longer time horizon affecting multiple regions, as well as to exercise the interaction and information sharing amongst SIFMA’s Global Directory of public and private sector business stakeholders, crisis managers, incident management and potentially communications and public relations teams.

A clear takeaway from the exercise is the importance of a robust partnership between the industry and government grounded in information sharing. No single actor – not the government, nor any individual firm – has the resources to protect markets from cyber threats on their own, nor do cyber incidents restrict themselves to one geographic region.

SIFMA will now work with Protiviti to analyze participant feedback and produce a public after-action report with key observations and recommendations for enhancing the financial services sector’s ability to respond to a ransomware attack. Protiviti has been a great partner in helping us develop and execute this exercise and we appreciate their support.

Cybersecurity is truly an issue where the interests of the industry and public sector are fully aligned. SIFMA and our members are constantly working to improve cyber defenses, resiliency and recovery through massive monetary investment in technology and personnel, regular training, industry exercises, and close coordination between the financial sector and the government, including our regulators.  Best practices are developed and refined regarding penetration testing, insider threats, third-party risks, and secure data storage and recovery. The lessons learned from Quantum Dawn VII will help shape these initiatives going forward.

More information on SIFMA’s cybersecurity initiatives and resources is available here, and more information on the Quantum Dawn cybersecurity exercises is available here.

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Kenneth E. Bentsen, Jr. is President and CEO of SIFMA. From 1995 to 2003, he served as a Member of the United States House of Representatives from Texas. Prior to his service in Congress, Mr. Bentsen was an investment banker specializing in municipal and housing finance.

Thomas F. Price is Managing Director, Technology, Operations, and Business Continuity, SIFMA.

Thomas M. Wagner is Managing Director, Financial Services Operations, SIFMA.

Related Resources

• Cybersecurity

• Cybersecurity Exercise: Quantum Dawn VI