UK bankers fear cyber attacks more than faltering economy or political interference, according to a new survey.
US and UK bankers said organised cyber attacks are the biggest threat to the safety of banks.
The Banking Banana Skins survey of 627 bankers, observers and risk regulators conducted by PricewaterhouseCoopers (PwC) showed that other bankers in the rest of the world list economic crisis as their biggest fear.
Commissioned by the Study of Financial Innovation (CSFI), the survey found that criminality is now ranked second globally, because of the alarming rise in cybercrime and fraud.
“We may at some point see a cyber-attack so powerful on an individual bank that it has the power to bring down the institution, necessitating a state bailout,” said Simon Samuels, a banking consultant in the UK.
Many respondents worried that banks have little power to prevent attacks because cybercrime comes in many different guises, from opportunistic hackers stealing private data to organised criminals.
For Ashley Dowson chairman of Sepa Consultancy in the UK there is a potential for an even greater threat as financial institutions are experimenting with new technologies such as crypto currencies or real-time payments, which makes them more vulnerable.
Banks have reasons to be worried. Data from 83 million customers was stolen from JP Morgan in 2014, while a security flaw left the details of an undisclosed number of customers of HSBC in the US exposed to hackers early this year, highlighting the risks that banks are facing.
According to the CSFI, bank’s underinvestment in “creaking technology systems” means they are one step behind at a time when criminals are becoming more sophisticated.
Even if banks do rise to the challenge, criminals will target the weakest links of a heavily interconnected financial system, the survey said.
Business picture of the day
Business picture of the day
1/37 ITV withdraws bid for Peppa Pig owner - Wednesday August 25
ITV withdrew its £1bn offer for Entertainment One, owner of the popular children’s television franchise “Peppa Pig,” the company said in a statement.
2/37 Scotland’s North Sea oil revenues collapse 97 per cent leaving £14.8bn budget hole - Wednesday August 24
Scotland’s revenues from North Sea oil have collapsed by 97 per cent in the past year as oil prices have plummeted, reigniting a fierce debate over whether an independent Scotland could finance itself. Scottish Liberal Democrat leader Willie Rennie said: “The nationalists' case for independence has been swallowed up by a £14 billion black hole.” Taxes collected from oil production fell from £1.8 billion in 2015 to just £60 million in 2016. The gap between tax revenues and what Scotland spends is now 9.5 per cent, or £14.8 billion, compared to a 4 per cent deficit for the UK as a whole.
3/37 Swiss watch exports to UK rise as sterling falls -Tuesday August 23
Swiss watch exports to the UK rose by 13.4% in July as tourists exploited the drop in the value of the pound to snap up luxury goods. The Federation of the Swiss Watch Industry said watches worth 110.2m Swiss francs (£87m) were exported to the UK last month, the best figures since November 2015.
4/37 Public borrowing worse than expected in wake of referendum vote - Friday August 19
The public finances were weaker than expected in the wake of the Brexit vote, official figures showed today. July has traditionally been a month of surplus for the public finances as it is one of the four months when companies pay a share of their annual corporation tax dues over to HMRC. City of London analysts had expected a surplus of £1.6bn.
5/37 Surprise jump in retail sales in July after EU referendum vote - Thursday August 18
There was no sign of British shoppers reining in spending in the wake of the EU referendum result, one of the first "hard" post Brexit vote set of statistics has shown. Retail sales jumped 1.4 per cent in July, more than reversing the 0.9 per cent decline in June, according to the Office for National Statistics.
6/37 Unexpected fall in joblessness post Brexit vote - Wednesday August 17
The UK claimant count unexpectedly declined last month, suggesting the British labour market held up reasonably well in the wake of the Brexit vote.
7/37 Inflation rises in wake of Brexit vote - Tuesday August 16
Consumer price inflation picked up in the wake of the UK’s Brexit vote, hitting its highest rate since November 2014. The Office for National Statistics said the annual rate of CPI inflation was 0.6 per cent, up from 0.5 per cent in June and slightly higher than City of London analysts had been expecting.
8/37 Sports Direct warehouse staff who were underpaid could receive £1m back pay - Monday August 15
Thousands of workers at British retailing group Sports Direct’s warehouse are set to receive back pay totalling an estimated £1 million for non-payment of the minimum wage, Britain’s largest union confirmed. The back pay follows an admission by Mike Ashley, the founder of Sports Direct, that his company has broken the law by falling to pay the national minimum wage at a hearing of the House of Commons Business, Innovation and Skills (BiS) select committee in June.
9/37 Eurozone GDP growth rate halves in second quarter - Friday August 12
Eurozone growth slipped back in the second quarter of the year and dried up entirely in Italy, the bloc’s most troubled large economy. Eurostat reported that the single currency’s aggregate GDP expanded by 0.3 per cent in the three months to June, down from the 0.6 per cent rate in the first quarter. This was in line with the statistics agency’s “flash” estimate from 29 July.
10/37 Arianna Huffington steps down as Huffington Post editor-in-chief - Thursday August 11
Arianna Huffington is stepping down as Editor-in-Chief of Huffington Post. The business woman has said she is leaving the post to concentrate on her new health and wellbeing venture, Thrive Global. Announcing the move on Twitter, Ms Huffington said she is "filled with gratitude" for her colleagues at the media outlet.
11/37 Bank of England to face 'real trial' to implement monetary stimulus - Wednesday August 10
It could be a “real trial” for the Bank of England to implement its £60bn government bond-buying programme to stimulate the economy in the wake of the Brexit vote, market analysts have predicted. The Bank sought to buy £1.17bn of long-dated government bonds, or Gilts, on Tuesday but unexpectedly missed this target by £52m, raising doubts about whether Threadneedle Street will be successful in implementing its latest round of money-printing stimulus known was quantitative easing.
12/37 UK economy contracted after Brexit vote according to leading economists - Tuesday August 9
The UK economy contracted by 0.2 per cent in the month following the Brexit vote giving Britain an “evens” chance of slipping into recession, according to the latest forecast from the National Institute of Economic and Social Research (NIESR). NIESR, which uses a respected economic model to produce its monthly activity estimates, says output in July dropped by 0.2 per cent as the economy took a hit in the wake of the shock vote by a majority of the British public on 23 June to leave the European Union.
13/37 Mexico's richest man Carlos Slim pushes for three-day work week - Friday August 5
Carlos Slim, the richest man in Mexico, has said he wants to introduce a three-day work week and a later retirement age to counterbalance changes in the way that civilisation is living and working
14/37 Bank of England cuts interest rates to 0.25% - Thursday August 4
Interest rates were slashed to a new historic low of 0.25 per cent and the Bank of England has pushed the button on another £170 billion of monetary stimulus to stop the economy sliding back into recession in the wake of the UK’s Brexit vote
15/37 McDonald's shares down after disappointing US sales - Tuesday July 26
Shares in Maccy D's have fallen nearly 4% on Wall Street after reporting disappointing earnings. The company reported lower than expected sales growth at its established US restaurants, despite the popularity of its All Day Breakfast. The fast-food chain added that it faced "a challenging environment in several key markets."
16/37 Verizon confirms Yahoo buyout worth $4.83bn - Monday July 25
Verizon has confirmed that it will buyout Yahoo for $4.83 billion in cash, marking the end of the six-month sale process and the end of an era for a company that once defined the internet. Marissa Mayer, Yahoo CEO, described the deal as "an important step in unlocking shareholder value for Yahoo". The deal marks the end of the six-month sale process and the end of an era for a company that once defined the internet
17/37 Brexit shock pushes UK services and manufacturing into contraction says new survey - Friday July 22
The Brexit shock has given the economy "a good kicking" according to a special set of surveys of businesses taken in the wake of the European Union referendum vote, which suggest the UK economy is now contracting at its steepest pace since the last recession in early 2009. The “dramatic deterioration” will significantly increase the odds of a major monetary stimulus from the Bank of England next month to support the economy.
18/37 Euro rises after Mario Draghi relaxed statement on Brexit impact - Thursday July 21
The president of the European Central Bank Mario Draghi struck a sanguine tone on the aftermath of the UK’s Brexit vote, but moved equity markets by urging a "public backstop" for the eurozone's struggling lenders. The ECB kept its main interest rates on hold and in his press conference Mr Draghi stressed markets had responded in an orderly fashion to the UK’s shock plebiscite result on 23 June.
19/37 Italy eyes private deal to bail out bank - Wednesday July 20
Italy is eyeing a “private sector” solution to rescue Monte dei Paschi di Siena, the world's oldest bank, in an attempt to sidestep tough EU rules on bailouts, the Financial Times reports. However, Rome’s main options to prop up the heavily indebted bank involve using funds from a state-backed Italian bank. That raises the risk of running foul of EU curbs on state bailouts. On Tuesday the European Court of Justice backed EU guidelines designed to prevent taxpayers from footing the bill for bailing out stricken lenders.
20/37 IMF slashes UK growth outlook in wake of Brexit vote - Tuesday July 19
The International Monetary Fund has slashed its forecasts for UK growth, becoming the first official economics body to revise its growth estimates heavily downward in the wake of the shock Brexit vote last month. The IMF now says it expects the UK GDP to grow by 1.7 per cent this year, down from the 1.9 per cent it forecast in April, and the forecast for 2017 is just 1.3 per cent, down from 2.2 per cent previously.
21/37 ARM Holdings chipmaker to be bought by Japan’s Softbank for £24bn - Monday July 18
British Finance Minister Philip Hammond (L) greets Masayoshi Son, CEO of Japanese mobile giant SoftBank, outside 11 Downing street in central London on July 18, 2016. Japanese mobile giant SoftBank has agreed a cash takeover of iPhone chip designer ARM Holdings for around £24.3 billion, the pair said Monday, in a major investment boost for post-Brexit Britain.
Getty Images / AFP / NIKLAS HALLE'N
22/37 Pokemon Go craze sees Nintendo share price increase 86% in a week adding £15bn to company value - Friday July 15
nvestors are still catching some of the global success of Pokémon Go global success, which has Nintendo shares hit a six-year high. The Japanese game company’s shares have climbed 86 per cent since last Thursday on the back of Pokémon Go’s popularity. That’s almost $15 billion (£11.1 billion) added to the company market value in a week.
23/37 Bank of England holds interest rates at 0.5% - Thursday July14
The Bank of England’s Monetary Policy Committee has decided to keep interest rates on hold, despite heightened market expectations that it would cut the cost of borrowing to a new historic low of 0.25 per cent to cushion the economy in the wake of the shock Brexit referendum result. But the Bank has also heavily hinted that a rate cut will come in August to support a weakening economy.
24/37 Brexit will plunge the UK into a recession in the next year, BlackRock says - Wednesday July 13
Britain will be plunged into a recession this year and be plagued with lower economic growth for another five because of the shock decision for the UK to leave the EU, BlackRock analysts have said. BlackRock is the largest asset manager in the world with $4.6 trillion under management as of 2015. Richard Turnill, chief investment strategist, has said that firm's "base case" is recession, meaning at a minimum, it expects the UK GDP to fall for two successive quarters in a row.
25/37 Nintendo shares soar on Pokemon Go success - Monday July 11
Shares in Japan's Nintendo = soared again on Monday, bringing market-value gains to $7.5 billion (£5.78 billion) in just two days as investors cheered the runaway success of Pokemon GO - its first long-awaited venture in mobile. The game, which marries a classic 20-year old franchise with augmented reality, allows players to walk around real-life neighborhoods while seeking virtual Pokemon game characters on their smartphone screens - a scavenger hunt that has earned enthusiastic early reviews.
26/37 John Lewis warns over sterling slump - Friday July 8
The boss of John Lewis has warned that the fall in the value of the pound could become a "big issue". Managing director Andy Street said the weak pound could start driving costs higher next year. He also said it was too early to say if the UK's vote to leave the European Union had affected consumer spending.
27/37 IMF chief Christine Lagarde urges quick Brexit to reduce economic uncertainty - Friday July 7
Christine Lagarde, the head of the International Monetary Fund, has urged the UK government to make a quick withdrawal from the European Union in order to reduce economic uncertainty. The growth of the British economy will be heavily dependent on the new trade agreements the UK negotiates with the EU, Ms Lagarde said. In an interview with the Financial Times, Ms Lagarde said: “We want to see clarity sooner rather than later because we think that a lack of clarity feeds uncertainty, which itself undermines investment appetites and decision making.”
28/37 KPMG appoint new 'head of Brexit' - Wednesday July 6
Brexit has seen a boom in demand for legal and financial services as UK businesses race to make sense of the situation ahead of the UK leaving the EU. KPMG, one of the fourth largest accountancy firms in the world, has created a head of Brexit position to manage client advice as the UK leaves the EU.
29/37 Pound sterling falls below $1.31 hitting new 31-year low
The pound fall below $1.31 for the first time in 31 years amid growing concerns about the financial stability of the UK after the decision to leave the EU. The last time the pound was worth less than $1.31 was in September 1985.
30/37 Three former Barclays traders found guilty in benchmark rate rigging trial - Monday July 4
Three former Barclays traders have been found guilty of conspiring to fraudulently manipulate global benchmark interest rates at a trial in London. Jay Merchant, 45 and born in Calcutta, was convicted unanimously. Jonathan Mathew, 35, a Libor submitter, and Alex Pabon (picture), 38, were found guilty by a majority verdict after the 10-week trial at Southwark Crown Court.
31/37 Bank of England to cut interest rates says Mark Carney - Thursday June 30
The Bank of England is likely to cut interest rates over the summer to combat a post-Brexit vote slowdown, the Bank's Governor, Mark Carney said today. The Governor's words, in a speech at the Bank's Threadneedle Street headquarters, sent the pound instantly and sharply down against the dollar as financial market traders responded to the news of the stimulus. READ MORE Brexit: 5 charts that show the vulnerability of the UK economy Ten year government bond yields also plummeted.
32/37 Toyota recalls more than 3.37 million cars - Wednesday June 29
Toyota, the Japanese car maker, said it was recalling millions of car worldwide and thousands in the UK over defective airbag concerns and fuel emissions control units.
33/37 First upside down house in Kuala Lumpur - Tuesday June 28
A two-storey house is the latest attraction for tourists in the Malaysian capital city. Kuala Lumpur Upside Down House is a two-storey house and is the latest attraction for tourists arriving to the Malaysian capital where everything inside such as the furniture are placed in an upside down position.
34/37 George Osborne says he’ll delay ‘punishment budget’ as pound slumps to new 31-year low - Monday June 27
George Osborne has sought to calm volatile financial markets in the wake of the Brexit vote in the referendum, but has left his own future as Chancellor in doubt. “Britain is ready to confront what the future holds for us from a position of strength” he said in a statement at 7.15am at the Treasury. "Growth has been robust and employment is at a record high. Our economy is now about as strong as it could be to confront the challenge the country now faces."
35/37 Markets react to Reacts to EU referendum vote result - Friday June 24
nalyst Robert Halver reacts at the Frankfurt Stock exchange the day after a majority of the British public voted for leaving the European Union on June 24, 2016 in Frankfurt am Main, Germany. The FTSE 100 plunged more than 8 per cent in its biggest opening slump since the financial crisis, wiping £120 billion off the value of the 100 biggest UK companies, after the UK voted to leave the EU.
36/37 Lock of David Bowie's hair to be auctioned - Thursday June 22
A clipping of David Bowie's blonde coiffure could fetch thousands this week at auction. The current bid is for $2,000 on Heritage Auctions, but The Associated Press is reporting that the Beverly Hills–based auction house is expecting to get more than $4,000 for the lock on Saturday.
37/37 The Palace of Culture and Science in Polant lit up with Remain messages as Britain prepares to go to vote - Wednesday June 22
The Palace of Culture and Science Warsaw's Palace of Culture and Science was illuminated in the colors of the Union Jack and accompanied by the hashtag, “Vote Remain.” Wednesday marked the last day of polling before Britain goes to vote
The Top Ten risk on a global scale in 2015 (2014)
1. Macro-economic environment (3)
The risk that economic conditions could damage banks, for example through uncertain recovery or the growth of asset bubbles
2. Criminality (9)
The risk to banks in areas such as money laundering, tax evasion and cyber attack
3. Regulation (1)
The risk that the current wave of regulation will have a damaging effect on banks
4. Technology risk (4)
The risk that banks will fail to keep up with technological change (4)
5. Political interference (2)
The risk of political interference in management and lending policies, or the imposition of new mandates, taxes and costs
6. Quality of risk management (11)
The risk that banks will incur losses because of inadequate risk management
7. Credit risk (7)
The risk that banks will suffer losses from lending to sovereign borrowers, businesses and consumers
8. Conduct practices (16)
The risk that banks will be damaged by poor sales, customer servicing and other conduct of business practices
9. Pricing of risk (6)
The risk that banks will misprice risk due to competitive and other pressures
10. Business model (-)
The risk that banks will fail to produce business models which meet new business, social and regulatory requirements
11. Social media (19)
The risk that a bank’s brand could be harmed by social media
12. Reputation (-)
The risks that the industry will suffer a poor reputation or lack of public trust
13 Capital availability (10)
The risk that banks will not be able to raise affordable capital
14. Interest rates (12)
The risk banks from the “normalisation” of interest rates
15. Emerging markets (17)
The risk to banks from volatility in emerging markets
16. Shadow banking (20)
The risk to banks from hedge funds and other “shadow”banking institutions, for example as competition or sources of volatility
17. Currency (22)
The risk to banks from volatility in the foreign exchange markets
18. Liquidity (15)
The risk that banks will encounter liquidity problems
19. Corporate governance (8)
The risk that weakness at board level will lead to poor oversight and control of banks
20. Management incentives (21)
The risk to banking soundness and reputation from poorly designed incentive structures
21. Derivatives (18)
The risk that banks will suffer losses through their dealings in derivatives and structured products
22. Human resources (23)
The risk that banks will have difficulty attracting and retaining talent in the present environment
23. Reliance on third parties (24)
The risk from outsourcing or off-shoring activities
24. Sustainability (25)
The risk to banks from climate change and other environmentalReuse content