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Risk managers: Cyber attack could cause next big shock
SOME three-fifths of risk managers around the world believe the chances of a high-impact event in the global financial system has increased in the last six months, with the threat of a cyber attack a key concern.
This was among findings from a survey conducted in September and October by The Depository Trust & Clearing Corporation (DTCC), a US-headquartered company providing clearing and settlement services.
The survey echoes concerns by governments, banks and other financial services firms over a spate of activities in recent years by organised groups of cyber criminals intent on bringing websites down, stealing sensitive data and committing credit card fraud.
Others have warned that cyber attacks could cause the next major shock to the interconnected global financial system.
Last month, Hong Kong-listed electronic toymaker VTech was among the latest firms to be hit, with hackers stealing a database containing the details of more than five million customers and some of their children.
A survey released on Monday by audit and advisory firm EY found that about a third of Singapore organisations are not confident in their ability to detect sophisticated cyber attacks. The global figure is 36 per cent.
The EY study polled 1,755 organisations across major industries from 67 countries, including 35 organisations from Singapore.
Meanwhile, the DTCC survey polled 400 clients and other financial market participants. Some 45 per cent of respondents said that the probability of a high-impact event in the global financial system has increased during the past six months, up from 29 per cent since the last survey was conducted in Q1 2015.
Cyber risk remained the number one concern, with 37 per cent citing it as the single biggest risk to the broader economy - albeit lower than 46 per cent half a year ago.
One respondent said: "Cyber risks appear to be multiplying while controls to address these risks may not be able to keep up with the continually escalating threats."
Respondents also highlighted other risks like geopolitical risk, the impact of new regulations, an economic slowdown outside the European Union (EU) and the US, and US Federal Reserve monetary policy.
European-based respondents tended to rank geopolitical risk highest, while respondents located in the Asia-Pacific region or working for Asia-Pacific firms were concerned about an economic slowdown outside of the EU and the US, DTCC said.
Over-regulation had caused a lack of liquidity in markets, which will exacerbate volatility, one respondent said.
Similar to half a year ago, 72 per cent of all respondents said their firms have increased the amount of resources dedicated to identifying, monitoring and mitigating systemic risks over the past year.