Breakingviews
By DOMINIC ELLIOTT and SARAH HURST

Banks that have been pooling resources on blockchain technology should apply their camaraderie in a different field: computer security.

The hacking of an unnamed commercial lender, revealed by the financial messaging system Swift on Thursday, came after an $81 million digital heist from Bangladesh's central bank in February. An industry utility — or at least better-coordinated defenses — is needed.

Increased regulatory requirements and low interest rates, both legacies of the financial crisis of the last decade, have made it hard for banks to make an economic return. The distributed ledger technology that underpins bitcoin may help cut industry costs. That's why more than 40 banks have joined the blockchain development group R3.

Cybersecurity should be next on the list. It's likely to be banks' biggest cost in terms of financial crime prevention this year and next, according to LexisNexis Risk Solutions. Weak digital defenses might prompt a credit rating downgrade, says Standard & Poor's.

Lenders may feel worried about sharing confidential data with rivals. But the aviation industry, long teetering on the edge of profitability, improved efficiency by sharing accident information via black box technology. And greater teamwork would help keep tabs on would-be criminals. Companies' own employees represent a huge threat: the business investigations company Kroll said in its latest annual global fraud report that insiders were 81 percent of the wrongdoers. A shared database of suspects might be a safeguard.

Regulators and governments could play a bigger role, too. The European Central Bank's plan for a database of serious incidents, as reported[1] by the Financial Times on Thursday, appears to be no more than a first step. The United States Financial Services Information Sharing and Analysis Center has had limited success: only 5 percent of the digital threats that American Express[2] finds are the subject of warnings from other institutions, the company's chief executive, Kenneth Chenault, said last year.

But lenders right now seem to be doing too little. Europe's private sector-led Cyber Defense Alliance consists of just four banks. Financial institutions have demonstrated an unusual level of esprit de corps when it comes to new technology. Given that digital security could hit their finances more painfully, cooperation makes even more sense.

Dominic Elliott and Sarah Hurst are columnists at Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.