Cybersecurity is a major concern, according to Norway's oil fund

The world's largest sovereign wealth fund now worries more about cyber security than the volatile financial markets since it experiences three "serious" cyberattacks on average every day.

According to its chief executive Nicolai Tangen, the number of significant hacking attempts against Norway's $1.2 trillion oil fund has increased in the last two to three years.

The fund experiences roughly 100,000 cyberattacks a year, of which it categorizes more than 1,000 as significant, according to its top executives. Last week, after inflation and recession fears rattled markets, the fund posted its largest half-year dollar loss.

According to Tangen, "I’m worried about cyber more than I am about markets. We’re seeing many more attempts, more attacks [that are] increasingly sophisticated."

The top executives of the fund are even worried that coordinated cyberattacks are developing into a systemic financial danger as markets grow more digital.

Trond Grande, the company's deputy chief executive, cited the 2020 attack on SolarWinds, a software provider, by state-sponsored Russian hackers that gave them access to the Pentagon and Treasury departments of the US government, as well as several Fortune 500 companies like Microsoft, Intel, and Deloitte.

"They estimate there were 1,000 Russians [involved] in that one attack, working in a co-ordinated fashion. I mean, Jesus, that’s our whole building on one attack, so you’re up against some formidable forces there," he added.

The number of cyberattacks directed at the banking sector has significantly increased recently. According to cyber security expert SonicWall, malware attacks increased 11% globally in the first half of 2022, but they doubled at banks and other financial organizations. Attacks by ransomware decreased 23% globally but rose 244% against financial targets during that time.

The perpetrators may be state-sponsored hackers or small-time criminal organizations. According to Bill Conner, executive chairman at SonicWall, the four states that actively support cyber aggression are Russia, China, Iran, and North Korea. "As sanctions go up, the need for money goes up as well," he remarked.

The "threat landscape" for these organizations is "massive," according to a cyber security specialist who consults another sovereign wealth fund.

"WWhen it comes to ransomware, about half of network intrusions are phishing attempts and the other half are remote access attacks using stolen credentials. You’ve also got insider threats [involving] someone with a USB drive, and sometimes people with access are just bribed," the expert continued.

National security organizations have mostly focused on the vulnerabilities of banks, stock exchanges, and crucial financial infrastructure including clearing houses in the financial sector, as seen in the US's twice-yearly Quantum Dawn cyberwar gaming exercise.

Executives from investment companies have, however, expressed growing concern about cyber security in recent years. Some have warned that the risks are underestimated and lamented the rising expenses associated with preventing attacks.

The hazards in the digital world have increased in the Nordic region as a result of the escalating hostilities with Russia following its invasion of Ukraine. As sanctions are tightened and Russia's financial situation worsens, the Nordic countries are a part of the group punishing Moscow, according to Conner.

In a recent report, JPMorgan analysts noted an increase in cyberattacks after Russia invaded Ukraine and cautioned that "critical industries in the US are on high alert, particularly the energy and financial sectors, for the possibility of retaliatory attacks as western sanctions weigh on the Russian economy."

The report emphasized that the risks were widespread and long-lasting in nature and that they would only get worse with time.

Midway through the 1990s, NBIM was established to invest Norway's oil and gas industry's profits. It has increased in size to represent roughly 1.5% of all publicly traded companies worldwide. The Ministry of Finance established the quasi-index fund's broad investment scope, and it is headquartered within Norway's central bank.

By fLEXI tEAM