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Cybercrime, S&P: “Increasing risks for European banks”

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Cybercrime, S&P: “Increasing risks for European banks”

European banks increasingly exposed to cybercrime risk. This is because the complexity created by the combination of old and new technology systems makes financial institution systems more vulnerable. It emerges from report di S&P Global Ratings “Cyber Risk Insights: European Banks’ IT Complexity Amplizes Riskthat while industry and regulators are responding to threats, a constant cyber resilience still remains a distant target for the sector. Risk of direct financial and sensitive data losses, exposure to corporate harm due to loss of trust and finally, risks of regulatory sanctions are among the most common dangers.

At the same time in Italy there is a greater number of investments to strengthen cyber security: 2023 ICT budgets are up, according to an analysis by Abi Lab.

How much risk increases for banks

According to the report S&P the cybercrime risk for banks has increased in 2022 to 22.6% from 21.8% in 2020. For this reason, the report reads, it is necessary that “the IT preparation of a bank is considered central when evaluating thecreditworthiness – explains Benjamin Heinrich, analyst at S&P Global Ratings -. We believe that the complexity of many banks’ IT systems and the lack of cybersecurity expertise and investment have exacerbated the risks faced by the European banking sector.”

Top 5 cyber threats and how to counter them

The risks for banks are manifold. A successful attack can mean a direct financial loss due to the theft of fundswhile indirect losses could arise as a result of ransom demands related to stolen data and reputational damage can affect access to debt markets.

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Bigger banks, bigger risks

The scale of the damage, and therefore the potential profits for cybercriminals, is magnified by size of the institution targeted. According to the analysis, in fact, it is the larger banks that are most at risk: both due to the greater number of customers and employees, and due to the greater complexity: two elements that can confer a more potential vulnerabilities.

Also the war in Ukraine it has heightened tensions around the world, even as feared damage from widespread cyber warfare has largely backfired. Meanwhile, the rapid digitization of banking services, which has accelerated with Covid-19, has led to a sharp change in the IT system underlying adding complexity and creating weaknesses and opportunities for hackers.

The ICT investments of Italian banks are growing

At the same time we are witnessing among Italian banks a increase in investments in innovation and IT security, with investment programs and strategies increasingly oriented towards customer needs. It emerges from report by Abi Lab, the research center for innovation and banking promoted by Abi, which focuses on the priorities for innovations in the banking world. In the foreground are thedigital acquisition of customers, the protection of remote channels used by customers and activities and solutions related to sustainability issues.

The “ranking” of investments

For 90.9% of the companies analysed, the ICT budget for 2023 is increasing or stable compared to 2022. According to the survey, at the top of the sector’s investment priorities we find thedigital customer acquisition (68%)demonstrating how much the global pandemic context has accelerated changes in people’s habits, in confidence with digital channels and, more generally, in relationship models as well as the strengthening of safety components (64%) which represents an absolute work priority for the banking world, also in consideration of the recent changes in the geopolitical scenario.

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To complete the podium the data governance (55%), or the careful and governed management of data (Data Governance). They follow the modernization of the core banking systems and adaptation of the infrastructures (50%) on a par with the evolution from a cloud computer point of view.

On the side of research and development, the projects considered as priorities by the banks concern, above all, the opportunities offered by the paradigms of Blockchain and the enhancement ofartificial intelligence in the possible areas of application (customer assistance, operational improvement, commercial development, risk management, etc.).

They follow the modernization of technological infrastructuresthe initiatives on data, the management and mitigation of cyber risks and the automation of processes. Finally, the adaptation of infrastructure and initiatives on Contact center.


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