Cyber attacks are a growing threat to UK financial system

Cyber attacks are a growing threat to the UK financial system, according to the Bank of England’s latest systemic risk survey.

Forty-six percent of respondents to the survey cited cyber attacks as a threat to the financial system, up 15 percentage points from the 31% that mentioned it in the previous survey.

The Bank said this was the second consecutive survey that the perceived risk of cyber attack increased and that it had been propelled to “a new survey high”.

Seven percent of respondents also mentioned cyber attacks as their number one risk.

The threat of cyber attack now ranks third in the list of risks to the UK financial system, third in the list of number-one risks and third in the list of most challenging risks to manage.

The top risk, cited by 72% of respondents, was economic downturn. The second, also cited by 46% of respondents, was geopolitical risk.

Economic downturn was also cited as the most difficult risk to manage cited by 34% of respondents, followed by the risk of financial market disruption.

These were also the top two number-one risks.

Overall, the survey found that the probability of a high-impact event hitting the UK financial system in the short term had fallen slightly.

But it added that the perceived probability of such an event over the medium term had increased by a similar amount.

Ten percent of respondents said they consider the probability of a high-impact event very likely over the next year, down five percentage points from the previous survey, while 31% consider the probability high in the next one to three years, up six percentage points.

The Bank of England’s systemic risk survey is conducted biannually.

The latest survey was conducted between 7 September and 25 September this year. Participants included hedge funds, banks, building societies, large complex financial institutions, asset managers and insurers.