Cybersecurity Threats to Finance in Switzerland Pose Growing Concern

The threat of cyber attacks remains one of the most significant operational risks facing financial institutions in Switzerland, according to the country’s Financial Market Supervisory Authority (FINMA). The agency has increased the intensity of its supervision in response, recognizing that cyber risks are a top priority for Swiss finance.

A Growing Concern

In 2023, cyber risks were a focal point of FINMA’s supervisory activity, with the agency identifying an increasing number of reported cyber attacks on supervised institutions. The Swiss financial sector has not been immune to cyber attacks, with many companies across all sectors targeted in recent years.

Digitalization and Cyber Vulnerabilities

The rise of digitalization and reliance on information communication technologies (ICTs) has made financial institutions increasingly vulnerable to cyber threats. FINMA has observed a growing dependency on ICTs, which can give rise to significant vulnerabilities at Swiss financial institutions. For example:

• IT system outages and disruptions, particularly those resulting from cyberattacks, can jeopardize the availability, confidentiality, and integrity of critical services and functions.
• The increasing use of digital channels for transactions and communication has created new attack vectors for cybercriminals.

FINMA’s Response

FINMA’s findings are reflected in its annual reports and risk monitors, which highlight the growing threat of cyber attacks. In 2022, FINMA identified an increasing number of reported cyber attacks on supervised institutions, with banks, asset managers, and insurance companies being among the worst-affected. The agency has also observed a trend towards more sophisticated and complex cyber attacks.

FINMA’s efforts to address these risks include:

• Increased supervision: FINMA is working closely with financial institutions to ensure that they have adequate controls in place to mitigate the threat of cyber attacks.
• Guidance and risk assessments: The agency provides guidance on cybersecurity best practices and conducts regular audits to monitor compliance.
• Regular monitoring: FINMA regularly reviews the cybersecurity posture of supervised institutions to identify areas for improvement.

Consequences of a Successful Cyber Attack

The consequences of a successful cyber attack can be severe, potentially:

• Disrupting critical services and functions
• Compromising sensitive data
• Damaging an institution’s reputation

As such, it is essential that financial institutions in Switzerland prioritize cybersecurity and work closely with regulators like FINMA to stay ahead of these evolving threats.