“Typically, whenever the economic cycle turns down, you see a rise in fraud, social unrest and political activism. The trend that we’re seeing now is defined as hactivism, and typically what you see is people flooding websites in order to effectively bring down the website and make a political or ideological statement,” Johannesburg Stock Exchange (JSE) post-trade services director Leila Fourie told CNBC Africa on Friday.
“It’s a very unusual channel that the broader community, in the form of either pressure groups and in some instances even terror groups, want to make a political or an ideological statement.”
Cyber-crimes are yet to have massive financial and reputational impact but so far costs have been substantial for a number of bourses. These attacks and crimes are not usually financially motivated but aim to destabilise a system or a company’s processes.
The JSE has taken precautions due to the rise in systemic risk and cyber-attacks on stock exchanges globally. The South African bourse has however not seen any exchange-related and fraudulently motivated hacks that have directly affected local markets.
In the global exchange world, trading environments are separated from more publically accessible technologies and the securities and firewalls are therefore constantly on guard to avoid any cyber-attacks.
“Because the economic crisis is very much connected to the financial markets this time around, financial organisations are typically targeted as a very interesting point or channel to use in order to get a message across that is politically or ideologically motivated,” Fourie explained.
All trades on the JSE are surveyed on a regular basis for any form of insider trading or unusual patterns of behaviour that might indicate inappropriate trading practices. The bourse also has specialists in the IT, regulatory and auditing environments to prevent flash crashes.
“The exchanges globally are seen very much symbolically as a central point of capitalism and a very central part of the financial ecosystem, which would make an attack on these websites a logical extension for those wanting to make a statement,” said Fourie.