While Brexit is seen as the biggest risk to the stability of the UK financial system, a cyber attack is the most difficult risk to manage for over half of firms.
The UK’s political environment was seen as the biggest risk to the financial system with 80% of respondents to a Bank of England report specifically citing Brexit as a risk, but cyber attacks were cited by more than half as the most difficult risk to manage.
Cyber security was cited as a risk by 62% of respondents to the biannual survey from the UK financial services regulator. This was an increase for the third consecutive survey, reaching a record high.
Although Brexit was seen as the biggest risk, more than half (51%) of respondents said that cyber security is the most challenging risk to manage, after an increase of 5% in the number compared to the previous report.
Cyber attack response standards
Banks need to get to grips with being ready to manage cyber attacks if they occur as regulator’s Financial Policy Committee (FPC) is setting standards for how quickly critical financial companies must be able to restore vital services after a cyber attack.
“Firms have a primary responsibility for their ability to resist and recover from cyber attacks. The impact tolerances being established by the FPC will be based on the time after which disruption to services could cause material economic impact,” said the Bank of England report.
The FPC will work with organisations such as the National Cyber Security Centre, to test that firms would be able to meet these standards.
Lyndon Nelson, deputy chief executive of the Bank of England’s Prudential Regulation Authority, recently said: “We have seen an increase in the number of operational incidents – be they caused by internal failures or from external attack.”