From: Press Release
Cyberattacks are one of the most significant and growing risk areas for financial institutions and an increasingly relevant factor for their risk control frameworks, says Fitch Ratings. The potential for cyber risks to negatively affect operations, reputation and financial performance suggests that it will continue to be an increasing focus for financial institutions and regulators.
The recent release of an advanced notice of proposed rulemaking (ANPR) concerning enhanced standards for financial entities’ cyber risk management underscores the rising concern regulators have over systemic and institutional vulnerabilities. The ANPR, which was issued jointly by the Treasury Department, Federal Reserve and FDIC in October 2016, proposes applying enhanced standards for operational practices pertaining to cybersecurity for large institutions with consolidated assets greater than $50bn. The risks of a single cyberattack on an institution leading to broader systemic risks are a focus of the ANPR and were cited as a key reason behind identifying larger banks, bank holding companies and non-bank financial institutions for enhanced management standards.
Cyberattacks are among the most unpredictable of operational and financial risks for financial institutions. The impact on institutions can range from electronic theft of data from accounts to serious reputational damage and/or disruption, resulting in loss of business. Publicly disclosed attacks in recent years throughout the world have included thefts by hackers totalling tens of millions of dollars. Thieves have also targeted international bank software and services such as the Society for Worldwide Interbank Financial Telecommunication on multiple occasions in recent years.
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