Safe harbor is a well-known legal and compliance term in the 401k and larger financial industries. Will sheltered harbor follow suit?
The latter, Sheltered Harbor, is a major cyber-risk mitigation initiative launched by U.S. banks, credit unions, broker-dealers and organizations like Securities Industry and Financial Markets Association (SIFMA). It’s designed “to ensure consumers have access to critical account assets in the event of a major incident,” according to the organization.
The stakes are understandably high, with the Investment Company Institute recently reporting total U.S. retirement assets at $27.2 trillion, with $7.7 trillion in all employer-based defined contribution retirement plans and $5.3 trillion in 401ks.
Based on standards agreed to and developed by member companies, it provides “specifications for common data formats, secure storage and operating processes to store and restore data, and receive a Sheltered Harbor acknowledgment of adherence to the specification.”
Described by The Wall Street Journal as a “doomsday project they hope will prevent a run on the financial system should one of them suffer a debilitating cyber attack,” it’s an outgrowth of the Financial Services Information Sharing and Analysis Center (FS-ISAC), its global counterpart of 7,000 member-firms.
“So far, most people think about cyber in terms of having a credit card stolen,” Stuart Madnick, a professor of information technologies at the MIT Sloan School of Management told the paper. “What you’re talking about now is a nuclear attack: If you can’t get to the ATM and get it to work.”
Last week, Sheltered Harbor announced that CEO Steven Silberstein, who led the organization for a two-year term, will be replaced by Trey Maust. The board of directors also appointed Carlos Recalde to be its president and chief operating officer.
Maust has been a board member of Sheltered Harbor since 2016. He is currently the chairman of the American Bankers Association’s (ABA) Community Bankers Council. Recalde has led the development of the Sheltered Harbor specification “since its early days.” He was the chief technology officer for the asset management business at SunGard and FIS.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
