German financial regulator BaFin is calling on German financial institutions to take more precautions against a growing number of cyber attacks and IT failures. The banks must invest “more than ever in their operational security and stability,” Federal Financial Supervisory Authority (BaFin) President Mark Branson said, according to the text of Tuesday’s speech in Frankfurt. “The money for this is available at the moment.” Because thanks to the interest rate turnaround, many institutions have made good money recently.
But this special boom will not last, Branson predicted. ‘We should expect that the number of insolvencies will continue to rise and that the situation in the real estate markets will not recover quickly.’ This means that things will be more difficult for the institutions in the future than in 2023. “It is all the more It is important that they continue to strengthen their resilience,” the BaFin president emphasized.
The financial regulator is concerned that banks and insurers use a small group of specialized IT service providers when outsourcing certain tasks. “When outages occur at one of these multi-client service providers, nervousness immediately sets in the system,” Branson explains.
companies need
The companies themselves in particular are challenged here: “They should actually have a plan B to maintain their processes if their service provider fails,” says Branson. “You have to ask yourself: In the worst case, is it possible to take over the outsourced processes yourself in the short term? The honest answer from many banks and insurers will be: no.”
According to the regulator, technical dependencies can endanger financial stability. “Cyber attacks also pose a major threat,” Branson said. “The number of incidents has been increasing for years. According to the Federal Office for Information Security, the threat in Germany is greater than ever.” In the future, BaFin wants to regularly prepare a cyber situation report for the financial sector and organize crisis and emergency exercises to identify weaknesses at a certain point in time. early stage. Branson warned: “Businesses must keep their IT risks under control.”
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
