ESA Warns About Looming Cyber Threats and Brexit Repercussions

Fintechist ESA Brexit Cyber Threats

Financial threats come in many different forms and shapes. In the past few years, there has been an increase in cyber threats and risks associated with the Brexit. EU regulators, and more specifically the Joint Committee of the ESA, are growing concerned over these developments as we speak.

It is evident the financial sector is under fire from many different angles. External threats should not be overlooked, nor should internal developments, Although not everyone wants to admit it, cyber threats are a very big problem as of right now. The looming Brexit will also shake things up in many different ways.

ESA Voices Banking Sector Concerns

As such, the ESA highlights both of these topics as major financial threats. It is possible a combination of these incidents will cause financial instability in the European Union. Since the UK’s withdrawal from the EU is still shrouded in mystery, there are a lot of potential outcomes. Taking all of these into account is virtually impossible as of right now.

Systemic risk in the banking sector still remains present in 2017 and 2018. The ESA strongly advises conducting more stress testing to manage systemic risk. It is evident there needs to be a strong focus on this particular aspect. Additionally, fragile IT systems need to be upgraded and outsourcing needs to be scrutinized more closely.

Whether or not European financial institutions will heed this warning, remains to be seen. The words by the ESA should not be taken lightly whatsoever. Even so, the banking industry has been dealing with most of those problems for decades. Unfortunately, not much progress has been made since. It is doubtful anything big will change in the months to come.

Header image courtesy of Shutterstock