Cybersecurity has eclipsed tumultuous financial markets as the top concern for the world’s largest sovereign wealth fund, as it faces an average of three “serious” cyberattacks every day.
The number of major hacking attempts against Norway’s $1.2 billion oil fund, Norges Bank Investment Management, has doubled in the past two to three years, according to its chief executive Nicolai Tangen.
The fund, which reported its biggest half-year dollar loss last week after inflation and recession fears rocked markets, experiences around 100,000 cyberattacks a year, of which it classifies more than 1,000 as serious, according to its leaders.
“I’m more concerned about cyber than markets,” Tangen told the Financial Times. “We see a lot more attempts, more attacks [that are] increasingly sophisticated. »
The fund’s top executives even worry that concerted cyberattacks could become a systemic financial risk as markets become increasingly digital.
Trond Grande, its deputy chief executive, pointed to the 2020 attack on SolarWinds, a software provider, by Russian state-backed hackers that allowed them to breach several US government agencies, including the Treasury and the Pentagon. , and a number of Fortune 500 companies, including Microsoft, Intel and Deloitte.
“They estimate that there were 1,000 Russians [involved] in this attack, working in a coordinated manner. I mean, Jesus, it’s our whole building on one attack, so you’re up against some formidable forces there,” he said.
Cyberattacks targeting the financial sector have increased sharply in recent months. Malware attacks rose 11% globally in the first half of 2022, but doubled in banks and financial institutions, according to cybersecurity specialist SonicWall. Ransomware attacks fell 23% globally, but increased 243% against financial targets over the same period.
Perpetrators can range from private criminal groups to state-sponsored hackers. According to Brian Connor, CEO of SonicWall, Russia, China, Iran and North Korea are the states that most actively support cyberaggression. “As the sanctions increase, the need for money also increases,” he said.
A cybersecurity expert who advises another sovereign wealth fund said the “threat landscape” for such groups was “enormous”.
“When it comes to ransomware, about half of network intrusions are phishing attempts and the other half are remote access attacks using stolen credentials. You also have insider threats [involving] someone with a thumb drive, and sometimes people who have access to it are just bribed,” he added.
In the financial sector, vulnerabilities in banks, exchanges and critical financial infrastructure such as clearing houses have been a focus of national security agencies, such as Quantum Dawn, the biannual US cyber warfare exercise.
However, investment firm executives have also become increasingly concerned about cybersecurity in recent years, with some warning that the dangers are underestimated and lamenting the rising costs of protecting against attacks.
In the Nordic region, rising tensions with Russia following its invasion of Ukraine have heightened risks in the digital sphere. “With the financial situation that Russia finds itself in and as the sanctions increase, the Nordic countries are part of this” bloc that imposes sanctions on Moscow, Connor said.
JPMorgan analysts pointed to an upsurge in cyberattacks following Russia’s invasion of Ukraine in a recent report, and warned that “critical industries in the United States are on high alert, particularly energy and finance, facing the possibility of retaliatory attacks as Western sanctions weigh on the Russian economy”.
The report stressed that the dangers were vast and long-term, and would only increase in the years to come.
NBIM was established in the mid-1990s to invest revenues from the Norwegian oil and gas industries. It has grown to own the equivalent of around 1.5% of all listed companies globally. The quasi-index fund is housed within the central bank of Norway and its overall investment mandate is set by the Ministry of Finance.
Additional reporting by George Steer in London