2nd March 2021

Cyber crime now the biggest threat to banks-CSFI’s Banana Skins poll identifies top risks in banking world

The greatest risks to banks from the COVID-19 pandemic come from crime and disruption, according to the CSFI’s latest survey, "Banking Banana Skins 2021". Cyber criminals are taking advantage of the operational changes that have been forced on the banks-such as remote working-to penetrate bank systems in order to perpetrate theft and to damage payments networks. The pandemic is also accelerating technological change in the banking industry, which could lead to industry re-structuring and the emergence of new business models.

More conventional banking risks-such as bad loans and reduced profitability-are seen as less severe because (unlike the situation after the GFC) the banks are well capitalised, and regulators are exercising forbearance.

The survey, the latest in the CSFI’s long-running series on banking risk, reflects the opinions of more than 150 senior bankers, regulators and observers of the banking scene in 11 countries. The work was supported by the Chartered Banker Institute, Cognizant, The Housing Finance Corporation and Shawbrook Bank, but the conclusions of the report are those of the CSFI and the authors.

The survey identifies the 23 most pressing risks facing banks, and ranks them by severity. Crime comes top of the list-the first time it has reached that position in more than 20 years.

The CSFI’s Banana Skins Index, a measure of the level of anxiety in the banking sector, is at a record high.
Banking Banana Skins 2021
(2015 ranking in brackets)
1. Crime(2)
2. Macro-economic environment(1)
3. Technology risk(4)
4. Security risk(-)
5. Credit risk(7)
6. Quality of risk management(6)
7. Business model(10)
8. Business practices(8)
9. Reputation(12)
10. Sustainability(24)
11. Corporate governance(19)
12. Culture(-)
13. Political risk(5)
14. International trade(-)
15. Interest rates(14)
16. Regulation(3)
17. Management incentives(20)
18. Pricing of risk(9)
19. People risk(22)
20. Liquidity(18)
21. Compliance risk( -)
22. Capital availability(13)
23. Currency(17)

CSFI Trends(3 articles)
Cyber Trends(326 mentions in Banking Newslink)
Market information & research(3975 articles)