The European Central Bank (ECB) is set to conduct a series of tests to assess banks’ readiness to combat cyberattacks.

Fabio Panetta, a European Central Bank’s Executive Board representative, emphasized that Cybersecurity is the pillar of digital finance. When speaking to the Euro Cyber Resilience Board about pan-European economic infrastructures, Panetta stated that cyber threats are multiplying.

He further highlighted that cyber threats could increase due to digital interconnectedness and increased remote working. Despite the high risks, he said that financial structures have shown resilience, but the board members must still be satisfied with the results.

Banks Need To Develop A More Proactive Approach

Andrea Enria, the head of ECB’s Supervisory Board, also revealed that the ECB will carry out a stress test on cyber resilience. The test aims to see how banks can react and recuperate from cyberattacks.

In a discussion with a journalist from Lithuania, Enria spoke about the country’s economy and considered the overall course of financial services since the beginning of the conflict between Russia and Ukraine. He noticed some upsurge in cyberattacks at the ECB since the war began, emphasizing the importance of cyber resilience and Cybersecurity.

When questioned if the closeness of Lithuania and Russia would put the former in a vulnerable situation, Enria mentioned that the proximity would not be a problem.

Companies Face A Series Of Issues When Combating Cyber Attack

ECB noted that financial firms encounter a particular area of vulnerability where they cannot ensure a well-integrated IT infrastructure and a seamless provision of services to users. Firms also face challenges in providing the board with top-tier data for effective risk management and strategic direction of the bank.

When steering its stress test, the ECB aims to assess the readiness of companies for cyberattacks and the broader implications that such incidents might have on their outsourced partnerships. It will also evaluate companies’ effectiveness in recovering from any attack.

Enria highlighted that the ECB emphasizes internal governance and control. He noted that banks with effective management and a robust internal control framework, combining solid checks and balances, are better positioned for compliance.

The ECB has announced a substantial commitment of resources and time to the test activity and intends to unveil results by mid-2024.

Furthermore, Cybersecurity and cyber resilience are not mere tick-box activities or processes that can be concluded. Managing cyber risk is a continuing growth process involving staying abreast of new technological risks and continuously testing and checking the efficiency of existing controls, as Enria emphasized in his conversation.