WASHINGTON — President Trump on Thursday signed an executive order to reinforce the country’s cybersecurity defenses, a move that financial institutions are hailing as a positive step toward creating a more resilient financial system.
“The executive order issued today will enhance the security of government systems and help protect our critical financial infrastructure — and ultimately bank customers — through enhanced information sharing and greater cross-industry collaboration,” Rob Nichols, the president and CEO of the American Bankers Association, said in a press release. “America’s banks will continue to work closely with the White House, Congress and others to establish clear lines of public-private communication, while avoiding inconsistent or duplicative regulation that might undermine our efforts to protect banks and the customers they serve."
The executive order requires government agency heads to develop policies that would place their organization in line with the National Institute of Standards and Technology framework, a product of a 2013 executive order from former President Obama that became an important standard for the financial services industry.
In addition, the Trump order directed several defense agencies, along with the attorney general and the FBI, to produce a series of recommendations on how to improve cybersecurity standards among critical infrastructure industries, which include financial services.
The report, due in 180 days, might establish some new standards that could affect the financial industry. But at this point, it is unclear whether banks will really be on the hook for additional requirements.
“To the extent that it’s an effort to improve the critical infrastructure with respect to the financial sector, there could be some expectations that will affect banks,” said Kevin Petrasic, a partner at White & Case. But, he added, “if you have some additional costs that ultimately allow banks to significantly decrease their spending on cybersecurity … I would think the industry would welcome something like that.”