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December 05, 2022

S&P says cyber risks may affect banks’ credit ratings

Banks and lenders in the region should be wary on digital risks.

S&P Global Ratings highlighted the risks of increasing digital risks as potential profit losses, reputational damage, poor risk management that could affect banks’ credit rating.

S&P Global Ratings said that as banking moves further into the digital space, threats of cyberattacks are rising in the Asia-Pacific (APAC) region.

The rating firm said that data breaches can harm the reputation of a bank and can hit a bank’s credit profile.

In economies where the entire industry incurs repeated, serious data breaches, or where regulators are particularly lax, S&P said they may possibly downgrade rating scores on all banks.

S&P further added that although they have yet to downgrade any regional bank’s credit rating mainly due to a cyberattack, a digital-operations related risk could a financial institution, especially those that have not invested enough in their cybersecurity.

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