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…
Cybersecurity threats are increasingly impacting the credit ratings of Korean financial institutions, according to Korea Ratings. The agency is exploring more precise methods to quantify a firm's exposure to cyber risks, which can extend beyond data theft to disrupt operations and raise borrowing costs. In a recent report, Korea Ratings highlighted that cyber risk can impair a financial institution's business prospects and financial stability.
International rating agencies have already downgraded companies following cyberattacks that disrupted operations or exposed internal control weaknesses. For instance, in 2019, S&P Global Ratings reduced Bank of Valletta's credit rating from BBB to BBB- after a cyberattack, citing operational risks and governance issues that diminished its creditworthiness.
Korea Ratings has also begun to factor cyber-related concerns into its evaluations of domestic financial firms. In March, the agency reduced Lotte Card's credit rating due to its risk management performance. Last August, Lotte Card revealed a data breach that exposed personal information, which contributed to the downgrade.
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- Cyber risk gains ground in Korean financial firms' credit ratings koreatimes.co.kr
