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Banks, must work together to beat cyber-nasties

BoE also warns of IT failures 'exacerbating' sector instability

Government must work closely with UK banks to improve financial institutions' infrastructure and resilience to cyber attacks, the Bank of England has warned.

Banks currently view cyber attacks as a "technical" problem, rather than an issue which merits "board-level attention," it said on Tuesday in its Financial Stability Report.

"[This is an issue], given the evolving nature of cyber threats and the key importance of cyber resilience to the continuity of financial services."

The report cited attackers stealing information from more than 80m customers at a large US bank in August as an example of financial institutions' vulnerabilities.

It also warned of the risks posed by IT failures. In October, a major glitch with the Bank of England's Real Time Gross Settlement - which underpins payments between banks totalling £575bn every day - resulted in major disruption.

It said such operational risks caused by infrastructure can "exacerbate" financial market volatility.

Last month financial regulators fined RBS £56m for a giant IT cock-up that left millions of customers unable to access their accounts in 2012. The Prudential Regulation Authority warned that "in extremis" the huge outage could have effected the "stability of the financial system it interfered with".

The Financial Conduct Authority and the PRA are also conducting a separate review of banks critical infrastructure and technology resilience, which is expected to conclude next year. ®

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