FRANKFURT, Germany—The European Central Bank this month will conduct cyber stress tests on banks to determine their resilience against cyberattacks.
The agency is requiring 109 banks in Europe to perform vulnerability assessments and incident response evaluations by mid-2024 Bank Info Security reported.
According to the report, in each test, the banking regulator will simulate a disruptive cyberattack capable of adversely affecting business operations. The central bank will then monitor how the financial organization responds to and recovers from the attack and how quickly it resumes normal business, Bank Info Security said.
"Our main objective is to identify the banks' weak spots," Anneli Tuominen, a member of the ECB's supervisory board stated. "We also plan to give them feedback based on the test results - for example, on the need to implement industry standards for cyber hygiene across the organization."
Bank Info Security noted the regulator announced the plans for cyber stress testing in March 2023 amid concerns that new cyberthreats posed by Russia's invasion of Ukraine could cripple European critical infrastructure.
Spike in Attacks
Since the invasion of Ukraine, European government and private-sector organizations have experienced a spike in denial-of-service attacks and ransomware hacks targeting third-party service providers, the ECB said, according to the report.
Of the estimated 109 banks operating across Europe that will undergo cyber stress testing, 28 must participate in an enhanced test.
The tests include questionnaires requiring banks to produce documentary evidence and exercises in vulnerability detection and information-sharing practices, Bank Info Security said.
Additional Assessment
In addition to banks, the ECB also will assess the cyber hygiene requirements of third-party service providers of financial organizations.
"Banks try to save costs by outsourcing some of their IT processes, but that is not always compatible with sound risk management," Tuominen was quoted as saying. "Banks should also understand the risks attached to outsourcing.
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