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Cyber attack warning: Huge assault on UK banks only ‘matter of time’ – Bank of England

Anil Kashyap told lawmakers how vulnerable banks would struggle to guard against a crippling assault, with fears growing over records of British financial institutions being at risk of compromise. Banks have previously been warned by security services over the potential for cyber attacks by Russia and other countries. Urging financial sectors to boost their preparedness, the BoE is no stranger to calling for the strengthening of protective measures to keep sensitive information in tact. Mr Kashyap, a senior at the BoE and external member of the financial policy committee, told MPs time was running it before “one of these things happens on a big scale”.

The falsification of transaction records and other data was an even bigger danger, Mr Kashyap said.

He told a Parliament committee: “If you wanted to do maximum damage, that is what you would probably do if you were a state actor.”

Attacks on bank records would be especially damaging as it would not be easy to identify which records were accurate and which had been corrupted, Mr Kashyap said.

He said: “You have this difficult situation where you have to restore the system, where you could be restoring a corrupt system.”

Financial institutions also risked focusing too much on dangers that would damage their individual reputations, rather than threats to the system as a whole, such as overreliance on a handful of providers of cloud computing services.

Mr Kashyap added: “I don’t really care if bank ‘x’ is offline for a week, even if it’s disastrous for their share price, if the services that they provide, that are critical, can be delivered in some other way.

“What is tricky is it could be the case that the (bank) board’s incentives of what to worry about are misaligned with the general incentives.”

He also said the BoE must turn its attention to technology firms who begin to rapidly gain market share in financial services.

It comes after this week saw Facebook announce a digital currency and payment service for its users.

The news raised eyebrows from finance and privacy experts, with Bruce McClary, spokesman for the National Foundation for Credit Counseling, expressing concerns to CNBC.

He said: “My concern is that when you put social media and your wallet into a blender, there could be some problems.

“First of all you want to make sure your financial transactions are secure and private.”

In May this year, hackers stole more than $40million worth of bitcoin from cryptocurrency exchange Binance.

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