In the light of the recent announcement from the Bank of England (BOE) stating that the banking crisis is officially over after all UK banks passed annual stress tests, Deputy Governor of BOE, Jon Cunliffe has revealed that future stress tests will include an examination of a broader range of risks, such as cybercrime.
Cunliffe said that a cybercrime attack is “a possibility” for future “exploratory scenarios” that are planned to take place every other year, which Greg Sim, CEO of Glasswall Solutions says is a call for banks to start taking cybercrime more seriously. “This latest call for banks to stress test the capabilities of their cyber-security to prevent potentially crippling attacks is recognition that cyber-crime has fast become one of the biggest threats facing the banking sector today.”
Sim also said that impending EU Data regulations planned for 2017 should further add weight to the urgent need for banks and other organisations to place cyber security as a priority concern, which should being addressed at the top of the agenda at board level. “Banks can no longer make light of the risks, as new laws will significantly increase the potential fines organisations will face in the event of a breach. Whilst it is encouraging to see the BoE taking steps to track and assess potential risks, I would suggest that every other year will not be often enough given the current pace of increasing cyber risks.”
According to reports, the Financial Policy Committee (FPC) has also warned banks to make cyber risk a “strategic priority” in the boardroom and has urged them to "build their resilience to cyber attacks, develop the ability to recover quickly from attacks, and ensure effective governance.”
Findings from a LexisNexis Risk Solutions and BBA report this week, reveal that the risks posed by financial crime is also big priority for banks and despite them spending up to £660m each year on Anti-Money Laundering (AML) compliance, both banks and law enforcement agencies have expressed concerns over financial crime and their ability to combat emerging risks.
The report highlighted doubts around the effectiveness of the fourth EU AML Directive, with 32 per cent of respondents saying that it will have no effect, or could even increase levels of money laundering across Europe.
Chrisol Correia, Director, Global AML Compliance, LexisNexis Risk Solutions said: “This report makes it clear that financial crime cannot be eradicated through strategic investment alone. Efforts to combat money laundering that are based on limited understanding and knowledge of the industry and risks will exacerbate the problem in the future.”
Over the next two years, more than a third (37 per cent) of respondents stated that preventing cybercrime will be the single biggest area of investment, followed by fraud and AML.