Strengthened Preparedness for Cyber-attacks: Joint Stress Test Sets New Standards for Preparation and Cooperation

Strong cooperation in a new model for collective training

"Our starting point is that disruptions will happen. We do not test to avoid disruptions, but to understand where the financial sector has vulnerabilities, so that critical functions can be continued and operations can be restored as quickly as possible when it happens. It is through concrete preparation, testing, and training that we become able to manage even the most complex situations," says Louise Mogensen, Director General of the Danish Financial Supervisory Authority.

The stress test has introduced a new model of collaboration, where firms and authorities jointly design the specific disruption scenario to be tested. The exercise is conducted both as a tabletop exercise - providing time to plan the best possible response - and as a real-time crisis simulation, enabling participants to practice immediate, coordinated action.

The collaboration during the test has been marked by a strong spirit of cooperation and a high level of engagement. "The firms have embraced the joint task with enthusiasm and significant resources. At the Danish Financial Supervisory Authority, we are both pleased and proud to work with the sector in this new way. This kind of collaboration is essential to strengthen preparedness across the sector," emphasizes Louise Mogensen.

Joint Initiatives Strengthen Preparedness

In the fictional scenario used in the test, data manipulation created uncertainty about the ownership of securities. This led to both the settlement of completed trades and further trading being halted for a period. As a result, both the settlement of completed trades and further trading had to be suspended. Before customers could resume trading as normal, participants had to complete a demanding clean-up work.

The stress test has confirmed that the mutual interconnectedness in the financial sector means that no actor can manage a major disruption alone - this applies both to the specific scenario in the test and more broadly in the sector. It is not enough to have good individual contingency plans; we are only as strong as the weakest link.

Instead of an individual race, recovery is a timed puzzle, where each participant has a part of the solution, and where cooperation and coordination are necessary for all the pieces to fall into place.

Therefore, we have jointly launched three initiatives, where firms across the sector, with the authorities as facilitators, will work together to strengthen the collective preparedness to manage extensive, prolonged ICT disruptions. The initiatives consist of developing a joint playbook for managing disruptions in the securities area, a working group to strengthen joint external crisis communication, and an initiative to enhance joint preparation across a range of relevant disruption scenarios.

"We share common interests, as both authorities and firms have a responsibility for, and an interest in, ensuring that critical functions for society can be maintained, even under pressure. And quickly restored when disruptions occur. We fulfill this responsibility by preparing together. When a crisis hits, it will of course not be exactly the scenario we have tested - but by having trained together and built a common understanding, we can all quickly adapt and use elements from the plans to manage the situation," says Louise Mogensen, Director General of the Danish Financial Supervisory Authority.