As concerns grow about the banking industry’s vulnerability to hacking, the European Union is considering testing banks’ defences against cyber attacks.
Cyber attacks against banks have increased in numbers and sophistication in recent years, with criminals finding new ways to target banks beyond trying to illicitly obtain details of their customers’ online accounts, Reuters reports. Last February £64 million was taken from the Bangladesh central bank when hackers broke into its system and gained access to the SWIFT international transactions network.
Global regulators have since tightened security requirements for banks after that giant cyber fraud, and in some countries have carried out checks on lenders’ security systems.
Complex cyber attacks however, have continued to rise, with the theft of 2.5 million pounds ($3 million) from Tesco Plc’s banking arm evidence of just that.
Banks “are struggling to demonstrate their ability to cope with the rising threat of intruders gaining unauthorized access to their critical systems and data,” a report of the European Banking Authority (EBA) warned in December.
The next step from European regulators to boost security could be an EU-wide stress test.
The European Central Bank announced last year it would set up a database to register incidents of cyber crime at commercial banks in the 19-country euro zone. But exchanges of information among national authorities on cyber incidents remains scant.
The Commission is now studying whether EU-wide tests would help step up security, a source at the EU executive said. This would be in addition to controls already carried out by national authorities.
Lloyds Banking Group, which recently experienced significant disruption to it’s online digital service as a result of a targeted DDOS attack, is working with law enforcement agencies to trace who was behind the assault.
As European banks keep relying on digital infrastructure that is “rigid and outdated”, according to EBA, regulators are considering new technologies that could boost security.
Blockchain, the technology behind the most successful virtual currency, Bitcoin, is being closely monitored in Brussels “to establish the advantages and possible risks” but also to weigh possible moves to enable blockchain where it is hindered, the Commission source said.
More than 1 billion euros have been invested in blockchain startups, a World Economic Forum report said.