The European Central Bank (ECB) has embarked on a critical initiative this month, conducting cyber stress tests on 109 banks across Europe.
According to Bank Info Security, these tests are designed to evaluate the banks’ resilience to cyberattacks, a concern heightened by the ongoing geopolitical tensions following Russia’s invasion of Ukraine. The ECB’s supervisory board member, Anneli Tuominen, emphasised the objective of uncovering banks’ vulnerabilities and providing feedback based on the test outcomes.
Banks are required to undergo vulnerability assessments and incident response evaluations, with a deadline set for mid-2024. The ECB plans to simulate disruptive cyberattacks in these tests, scrutinising the banks’ response and recovery capabilities. This initiative follows a surge in denial-of-service attacks and ransomware hacks since the Ukraine conflict, highlighting the urgent need for enhanced cybersecurity in the banking sector.
A unique aspect of these stress tests is the inclusion of third-party service providers, acknowledging the risks associated with outsourcing IT processes. The ECB has observed a worrying trend in banks’ cyber incident reporting, identity and access management, and data management practices, which these tests aim to address.
European Central Bank supervisory board member Anneli Tuominen highlighted the urgency and importance of these tests, saying, “Our main objective is to identify the banks’ weak spots. We also plan to give them feedback based on the test results – for example, on the need to implement industry standards for cyber hygiene across the organization.”
She further commented on the risks of IT process outsourcing in banks: “Banks try to save costs by outsourcing some of their IT processes, but that is not always compatible with sound risk management. Banks should also understand the risks attached to outsourcing.”
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