In financial markets, clients entrust their capital and data to financial infrastructure providers who are vulnerable to breaches. We develop a model in which infrastructure providers compete to provide secure and efficient client services, in the presence of a cyber-attacker. In equilibrium,...

Financial services are delivered almost exclusively online and cyber attackers have taken notice. We develop a principal-agent model with fee-paying clients who delegate security decisions to financial platforms that are subject to cyber attacks that steal data or assets. We derive testable...