Cyber attacks among biggest risks to financial stability, Bank chief warns

Cyber attacks are among the biggest risks to financial stability in the UK, the Bank of England chief has warned.

Major incidents this year – such as attacks on Jaguar Land Rover (JLR) and Marks & Spencer (M&S) – have highlighted the significance of these risks.

The Bank’s Financial Stability Report (FSR), published on Tuesday, found that a record amount of firms responding to its survey cited cyber attacks as among the biggest risks to the UK financial system.

Andrew Bailey, the Bank’s Governor, said: “If you look at the league table of risks post the financial crisis and asked the question, what risk has come up the league table most sharply in that period, I’m afraid that cyber would be up there for me, right at the top.

“It never goes away. We have to be, I’m afraid, very straightforward and frank about this. You can’t mitigate cyber risk in a way that just takes it off the table.

“We have to be very realistic about the fact that as we develop defences and firms develop defences, bad actors out there are developing at the same time.

“Our approach with the financials sector is to say it is critically important, we have to go on working together on it… because I’m afraid it’ll just go on evolving.

“The fragmentation of the world economy, the fact that there are bad actors out there… we know who they are – there is an association with cyber attacks.”

Heightened political tensions around the world has been associated with an increase in cyber attacks, the report found.

Furthermore, new technologies like artificial intelligence (AI) open up new risks and could make it easier for attackers.

The warning comes after JLR suffered a severe cyber attack earlier this year, forcing it to pause production of its cars for more than a month and resulting in a costly recovery.

The incident had a wider impact on the UK economy and was cited as one of the key factors pulling on economic growth over the third quarter.

A wave of cyber attacks this year has also targeted retailers like M&S and the Co-op, as well as an airport software provider, leading to significant flight delays.