A recent study commissioned by the Study of Financial Innovation (CSFI) and conducted by PricewaterhouseCoopers (PwC), reveals that US and UK bankers rank organized cyber attacks as the biggest threat to the safety of banks. The biggest banks fear cyber attacks more than regulation, faltering economic growth and other potential risks. The Banking Banana Skins survey of 627 bankers, observers and risk regulators showed that Cyber crime topped a list of 24 possible risks to banks because of the alarming rise in cybercrime and fraud.
“We may at some point see a cyber-attack so powerful on an individual bank that it has the power to bring down the institution, necessitating a state bailout,” said Simon Samuels, a banking consultant in the UK.
Many respondents worry that banks have little power to prevent attacks because cybercrime comes in many different guises, from opportunistic hackers stealing private data to organized criminals.
Data from 83 million customers was stolen from JP Morgan in 2014, while a security flaw left the details of an undisclosed number of customers of HSBC in the US exposed to hackers early this year. These are but two recent examples that highlight the risks that banks are facing.
Banks have reasons to be worried. According to the CSFI, bank’s underinvestment in “creaking technology systems” means they are one step behind at a time when criminals are becoming more sophisticated. Even if banks do rise to the challenge, criminals will target the weakest links of a heavily interconnected financial system, the survey said.