This financial sector’s reliance on computer systems and network has made it an attractive target for cyber attacks, now the biggest risk to the UK financial system.
In its latest Financial Stability Report, the Bank of England (BoE) agrees that cyber threats may be prevalent in 2023. The BoE said that it is working to strengthen defenses against cyber attacks.
The report identified three critical areas of vulnerability: systems and data, people, and processes.
Systems and data are vulnerable to attack or theft, while people can be tricked into revealing information or carrying out unwanted actions. Processes can be disrupted by cyber attacks, leading to financial losses.
The BoE said that the UK’s financial sector is well placed to defend itself against cyber attacks, but it must remain vigilant. The report includes case studies of successful cyber defenses and recommendations for further action.
The UK government has also recently published its own Cyber Security Strategy, which includes a commitment to invest £3 billion in cyber security over the next five years. This investment will help to protect businesses and critical national infrastructure from cyber attacks.
Why is the Cyber Attack Risk Growing in the Financial Sector?
According to the Bank of England’s 2022 Systemic Risk Survey, 74% of executives in the financial sector in the UK see cyber attacks to be the biggest risk in their industry. The report also revealed that 62% more executives believe their companies are at risk of cyber attack, a significant rise from the data in 2022’s first half (31%).
72% believe there are great chances of a high-impact cyber attack this year, which shows a big risk in the financial sector. This is due to several factors, including the growing use of technology in the sector and the increasing sophistication of cyber criminals.
Technology has made it possible for financial institutions to offer more services online and to conduct more transactions electronically. This has made the sector more reliant on technology and has also made it more vulnerable to cyber attacks.
Cyber criminals are becoming more sophisticated and using more sophisticated methods to carry out attacks. They are also targeting financial institutions more frequently.
The Bank of International Settlements has also pointed to cloud-based services and remote work in the financial sector as culprits behind the growing risk of cyber attacks in the financial industry.
The growing threat has led to an increase in the amount of money being spent on cyber security by financial institutions. However, it’s still insufficient to keep up with the growing threat.
The financial sector is vital to the economy, and any disruption could have a significant impact. This is why financial institutions must do everything they can to protect themselves from cyber attacks.
Is My Money Safe?
The growing risk of cyber attacks in the financial industry also alarms us about whether our money is safe in our bank accounts or digital wallets. However, generally speaking, depositors don’t need to worry. According to the Financial Conduct Authority, banks must refund their depositors for unauthorized transactions.
In November 2017, seven banks in the UK were victims of a cyber attack, which required them to shut down their systems and reduce operations. It required them hundreds of thousands of pounds to recover, a cost that was not passed onto customers. In fact, the attacks had little to no impact at all on customers.
So, your money is generally safe in your banks even if they become victims of cyber attacks. Although more cyber security efforts are needed in the financial sector, they have measures in place to ensure that these threats are not passed onto consumers.
What's the Bank of England Doing About This?
The Bank of England ensures that the financial sector is prepared for the increasing risk of cyber attacks.
In 2016, they published their first set of Cyber Security Principles, which set out expectations for firms in relation to their management of cyber risks.
The Bank has also established a Financial Policy Committee (FPC) Subcommittee on Cyber Resilience, which oversees the Bank’s work on cyber resilience in the financial sector.
In addition, it has established a Cyber Security Working Group, which brings representatives from across the financial sector to share information and best practices on cyber security.
The Bank is also working with law enforcement agencies and other stakeholders to raise awareness of the threat posed by cyber crime and to develop and implement response plans.
What Steps Can an Organization Take to Protect Itself From Cyber Attacks?
There are several steps that organizations can take to protect themselves from cyber attacks. But the most important step is to ensure that all employees are properly trained in cybersecurity best practices.
Your employees are your first line of defense against cyber attacks so it’s imperative that they know how to identify potential threats and what to do if they suspect their organization has been attacked.
In addition, organizations should have robust cyber security policies and procedures in place. These should be regularly reviewed and updated to ensure they remain effective. Furthermore, they should ensure that their systems and data are properly backed up so they can be recovered in the event of an attack.
Finally, it is also important for organizations to have a good working relationship with a reputable cyber security firm. This will ensure they have access to the latest information and resources to help them protect their systems and data.
Your First Defense Against a Cyber Attack
As the world becomes increasingly digitized, the financial sector becomes more vulnerable to cyber attacks. As more and more financial institutions adopt digital technologies, the risk of cyber attacks is expected to grow. However, by increasing security measures, the financial sector can mitigate this risk.
When employees understand the risks involved in online activity and how to mitigate them, they can play a vital role in protecting your organization from potential cyber attacks.
Offering regular cyber security awareness training can help ensure that employees are up to date on the latest threats and how to protect against them. This can go a long way toward reducing the risk of a successful attack on your organization.
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