A recent report from German regulator BaFin underscores cybersecurity and the outsourcing of IT services as major threats to the financial sector.
The watchdog identifies seven key risks that could undermine Germany's financial stability, including a new concern for 2024: market concentration in IT service outsourcing.
The report raises alarm about the dominance of a few specialized IT service providers catering to a significant portion of banks and insurers in Germany. It also highlights the persistent risks posed by cyberattacks and insufficient measures for preventing money laundering.
Mark Branson, President of BaFin, emphasizes the importance of adequately addressing these risks. He warns institutions against underestimating the need for risk provisioning and urges companies to prioritize investments in operational security and stability.