Several UK banks have suffered actual financial losses as a result of cyber-attacks in the last six months, according to a Bank of England study.
Consequently Britains top banks see cyber security as one of their top Operational Risks
The June Report also highlighted potential operational risks related to financial institutions’ information technology (IT) systems. A quarter of respondents to the Bank of England’s 2013 H2 Systemic Risk Survey highlighted operational risk as one of the main risks to UK financial stability (Chart 2.15). Over half of these responses cited risks from cyber attack — where an individual or group seeks to exploit vulnerabilities in IT systems for financial gain or to disrupt services.
Cyber attack has continued to threaten to disrupt the financial system. In the past six months, several UK banks and financial market infrastructures have experienced cyber attacks, some of which have disrupted services. While losses have been small relative to UK banks’ operational risk capital requirements, they have revealed vulnerabilities. If these vulnerabilities were exploited to disrupt services, then the cost to the financial system could be significant and borne by a large number of institutions. In response to the FPC’s June recommendation, a programme of work has been developed to assess, test and improve the financial system’s resilience to cyber attack (Section 4).
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