Post by Bank for International Settlements – BIS

In response to the increasing frequency, sophistication and potential impact of cyber incidents, authorities have adopted a range of tools aimed at testing firms’ preparedness for managing cyber risk. Among them, cyber stress testing can help authorities and firms to identify vulnerabilities and strengthen response and recovery mechanisms as well as understand the financial stability impacts of cyber incidents. A new FSI Brief by Patrizia Baudino reviews approaches to cyber stress testing for banks on the basis of disclosure by three authorities that recently conducted such exercises. Two distinct approaches emerge, namely firm- or system-focused cyber stress tests. It is important for the authority in charge to select the approach that best reflects the institutional setup and the objectives of the stress test, ensuring consistency across all parts of the exercise. Continued enhancements and disclosure of the methodological aspects in cyber stress tests can help raise awareness and establish best practices. Read more at: https://bit.ly/4tcLl5U #FinancialStabilityInstitute