South Dakota Establishes Financial Security Center

South Dakota's Dakota State University (DSU) is about to become the epicenter of security for the nation's financial system. The Madison, S.D.-based university is creating the National Center for the Protection of the Financial Infrastructure.

Already the research center has received $2 million from the state of South Dakota and has garnered support from federal agencies and the private sector. DSU is partnering with New York-based Citibank ($2.2 trillion in assets), San Francisco-based Wells Fargo ($609 billion in assets), Sioux Falls, S.D.-based First Premier Bank ($900 million in assets), the Federal Reserve, the FDIC and the Department of Homeland Security to establish the center.

Mel Ustad, director of commercialization in the South Dakota Governor's Office of Economic Development, says the goal of the center is to advance the security and safety of the nation's financial infrastructure through education and the development of new technologies. "This is going to be a training program so that students and those currently employed in the financial industry are better prepared to protect institutions," he comments.

According to Kevin Streff, the center's director, it will focus on six primary goals: creating improvements in security, preparedness and resiliency of the financial system; developing rapid and accurate methods to prevent security incidents at financial institutions; developing tools and strategic applications to mitigate cyber incidents; developing tools to facilitate recovery from cyber incidents and resume stable operations; developing a process for rapidly communicating with the public/customers in the event of a security incident; and delivering high-quality education and training to students and professionals.

Streff says the center provides an opportunity for academia to offer solutions to the private sector's problems. "Academia has resources that can be brought to bear to help solve information security problems," he explains. "In fact, several academicians have been active in information security research. However, their efforts are not prioritized or coordinated to meet the needs of the financial industry." The new program, he adds, designates DSU as the lead in national efforts to protect financial information.

DSU: Center for Excellence

According to Ustad, DSU is considered by the Department of Homeland Security and the National Security Agency as one of the centers for academic excellence in information assurance, specializing in financial services. It is the only one focused on financial services information security.

Further, the state has a history with the financial services sector. In 1984 Citi established its credit card operations in South Dakota, Ustad explains. "Once Citi arrived, [DSU's mission] changed to a focus on IT and developing IT people that Citi needed for its credit card business," he relates.

Wells Fargo and Premier Bankcard, the card arm of First Premier, also have card operations in the state. In fact, the financial services sector contributes $6.4 billion to South Dakota's $32 billion gross state product.

"Now we're bringing in additional people and resources. Citi, Wells Fargo, the FDIC and the others have representatives sitting on the center's advisory board," Ustad explains. "They will help set the agenda and focus on the areas most needed by the industry."