Australian banks’ cyber risk growing: S&P

Regional lenders are most vulnerable, especially to a data breach.

Cyber risk is a growing threat to Australian banks, with regional lenders particularly vulnerable, warned S&P Global Ratings.

“Although risks at a system level remain low, a large-scale attack could significantly damage the country's banking system, and lenders with weaker cyber and nonfinancial risk governance are the most vulnerable,” the ratings agency said.

To date, Australian banks have not suffered a cyber incident that has led to a rating action, S&P said. But given the evolving nature of cyber risk, banks are in danger of facing a major incident, such as a data breach.

“A potential data breach is the biggest cyber risk for Australian banks, with the regional banks most exposed,” S&P said.
Currently, however, risk at a system level remains low, notwithstanding the interconnectedness and concentration of the Australian banking industry, it added.