Several UK banks have been hit by cyber attacks that have led to financial losses over the past six months. The Bank of England revealed the startling insight in its latest Financial Stability Report.
The document – which outlines the various issues facing the financial sector in the UK – cites cyber security as a growing area of concern and revealed that several institutions have been affected.
“Cyber attack has continued to threaten to disrupt the financial system. In the past six months, several UK banks and financial market infrastructures have experienced cyber attacks, some of which have disrupted services,” it said.
“While losses have been small relative to UK banks’ operational risk capital requirements, they have revealed vulnerabilities. If these vulnerabilities were exploited to disrupt services, then the cost to the financial system could be significant and borne by a large number of institutions.”
The report went on to warn that the financial market is particularly open to a widespread incident, given its interrelated nature.
“The financial system has a number of potential vulnerabilities to cyber attack, reflecting its high degree of interconnectedness, its reliance on centralised
market infrastructure, and its sometimes complex legacy IT systems,” it said.
In order to try and combat this threat the Treasury, government agencies and financial authorities are working together to draw up an action plan to “assess, test, and improve cyber resilience across core parts of the financial sector."
This work includes the recent operation, dubbed Waking Shark II, which was designed to test how the market would react to a major cyber incident. A report into the outcome of the drill will be published in early 2014, the Bank of England said in its report.
V3 contacted the Bank of England for more information on the attacks but was told no more information would be made public.
The revelations underline the extent of the cyber threat to the UK as crooks and state actors continue to use digital attacks to steal data and financial information and try to disrupt business.
Chris McIntosh, the chief executive of security firm ViaSat UK, said it was not surprising that cyber incidents were on the up, and banks need to react to the trend immediately.
“The financial sector is a lucrative target for state-sponsored and organised crime, and this goes well above and beyond individual branches,” he said.
“Rather than waiting for the next data breach to occur, the UK’s banks need to realise that they have likely already been compromised and need to work back on this basis.”
The revelations come during the same week that the government issued a report saying some of the UK’s top businesses need to improve their cyber security policies as the threat from cyber attacks rises all the time.
Dan Worth is the news editor for V3 having first joined the site as a reporter in November 2009. He specialises in a raft of areas including fixed and mobile telecoms, data protection, social media and government IT. Before joining V3 Dan covered communications technology, data handling and resilience in the emergency services sector on the BAPCO Journal.