EBA Cautions on Economic Impact of Bank IT Failures
In 2018, the EBA highlighted risks related to information and communication technologies as one of the key challenges for banks this year. Additionally, ICT risks – particularly ones related to cyber and data security are a key concern to a larger number of firms this year, compared to 2017.
“Within types of operational risk, ICT-related risks are currently a key challenge for EU banks, says the EBA. “Almost 90% of the banks responding to the RAQ point to cyber risks and data security as key operational risk drivers. This reflects a significant increase since last year’s RAQ, in which 55% of the banks pointed to the same challenge."
Within ICT risks, the EBA dedicated particular attention to cyber threats to data integrity, confidentiality and protection, as well as business continuity in “an increasingly digitalised European banking sector”. The report’s recommendations in this regard included that banks “update and improve their IT infrastructures at the same pace as these threats are emerging.”
For the first time in this year’s report, the regulator highlighted the impact of ICT failures within individual financial firms on the entire banking system, potentially entailing “significant losses to the real economy.”