Concerns about potential cyber attack on the UK's financial system at 'highest recorded level', says Bank of England

Out-Law News | 02 Jul 2015 | 4:58 pm | 1 min. read

Industry concerns about a potential cyber attack on the UK's financial system are at their "highest recorded level", the Bank of England (the Bank) has said in a new report.

According to the Bank's systemic risk survey (9-page / 415KB PDF), which covers the first half of 2015, 30% of respondents said they believe a cyber attack is one of the five risks they believe would "have the greatest impact on the UK financial system if they were to materialise".

When the Bank conducted a similar systemic risk survey in the second half of 2014 just 10% of respondents listed a cyber attack as one of the five 'greatest impact' risks.

"The perceived risk of cyber attack increased markedly … and is now at its highest recorded level," the Bank said in its report.

According to the report, 24% of respondents also said they think cyber attacks are a "risk most challenging to manage as a firm".

The risk posed by cyber attack was the sixth most commonly cited risk respondents identified to the UK financial system in the latest survey. The risk most commonly highlighted was "sovereign risk" (58%), whilst 56% of respondents referred to the "risk of an economic downturn" and 42% mentioned risk of financial market disruption or dislocation, the Bank said.

Last year the Financial Policy Committee (FPC) at the Bank said that cyber security is not just a technical issue that the board of directors at UK banks can ignore.

In a report, the FPC said that a self-assessment exercise involving financial services companies and "market infrastructures" on cyber resilience had highlighted some areas for improvement, including the way in which banks view cyber threats.

"Although these assessments have not revealed any critical shortcomings at this stage regulators have noted some areas for improvement, including a tendency among firms to view cyber threats as a ‘technical’ problem – rather than as an issue which merits board-level attention given the evolving nature of cyber threats and the key importance of cyber resilience to continuity of financial services," the FPC report said. "Supervisors are working with firms to agree timetables for remediation."