Cyber risk gains ground in Korean financial firms' credit ratings
Cyberattacks are becoming a more consequential credit risk for financial firms, as the damage can extend beyond data theft to operational disruptions and higher funding costs. Korea Ratings is considering more objective ways to measure firms’ exposure to cyber threats, industry officials said Sunday. In a recent report, the ratings agency said cyber risk can weaken both a financial institution’s…
Cyberattacks are increasingly posing a significant credit risk for financial firms in Korea, according to Korea Ratings, an industry source. The agency is exploring more objective methods to gauge a company's vulnerability to cyber threats, which extend beyond mere data breaches to operational disruptions and increased funding costs.
In a recent report, Korea Ratings highlighted that cyber risk can weaken both the business prospects and financial health of a financial institution. The ratings agency noted that international counterparts have already downgraded companies following cyberattacks that disrupted operations or exposed weaknesses in internal controls.
Notably, S&P Global Ratings reduced Bank of Valletta's rating from BBB to BBB- in 2019 after a cyberattack, citing operational risks and governance issues that impacted its creditworthiness. In March, Korea Ratings incorporated cyber-related concerns into its assessment of a domestic financial firm, lowering Lotte Card's score for the "risk management" factor following a data breach in August last year that exposed sensitive information.
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- Cyber risk gains ground in Korean financial firms' credit ratings koreatimes.co.kr
