Cyberattack on Australian bank could threaten financial system, but risk is low

The other issue facing the banks is a skills shortage in cybersecurity. The bigger banking players have deeper pockets to retain and attract talent, but smaller players might struggle, DeLange said.

“It is a competition for skills not only between themselves, but also with information technology companies and other companies. With COVID, that also didn’t help just in terms of skilled migration coming into the country.”

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Banks with a significant customer base but relative lower revenue numbers, such as several regional banks, have a high risk of a data breach, the report found. Other factors that influence risk could include the number of unique IP addresses a company has, its volume of network traffic, and the popularity of its website.

“Cyber risk is an evolving risk,” said DeLange. “The frequency and sophistication of attacks are on the increase and the banking industry as a collective faces the challenge of combining efforts to manage the risk. Failing to do so could have systemic implications.”

In a research note released on Wednesday, Jarden analysts said that the recent data breach at Optus could have happened to any Australian company given the rise in frequency and severity of cyberattacks. They expect listed companies to lift their focus on and investment in data privacy, cybersecurity policies and risk management plans in the wake of the Optus breach.

They said that the banking sector was aware of the risks of being exposed to cyberattacks and it was an ongoing focus for them.

“We view banks as having amongst the best access to data, both first party and third party via open banking giving them insight into both financial status and spending habits,” they said.

“Whilst data is key for general operations (i.e. lending decisions), outside of this utilisation of data is at different levels for different banks. Notably, whilst not all had externally facing cybersecurity policies, all had cybersecurity programs for customers with a focus on reducing vulnerability to cybercrime. One area all banks have been utilising data is in informing and backing decisions to reduce branch numbers.”

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