Banks may not benefit from cyber liability insurance as much as they may believe
Recent cyber attacks have highlighted the dangers that exist in the digital world. These dangers are still not fully understood, due to the fact that many businesses have only very recently begun the process of “digitizing” themselves. Banks are among those that have only recently begun to grow more digital, and this means that cyber insurance is beginning to attract more attention from these financial service organizations. The problem is, however, that insurance may not be enough to protect banks from digital risks.
Banks are becoming attractive targets because of their relatively low digital aptitude
Banks are high priority targets within the digital space. Many of these organizations are still quite new to the Internet and online technology in general. Banks do, of course, have stringent security measures in place to protect themselves in the digital world, but most banking groups are operated in a very traditional sense, which accounts for the physical world more than the digital one. Because of the rapidly evolving nature of digital risks, some banks may not be in a position to keep up with the latest security solutions, relying too heavily on insurance protection that may not be as effective as they might believe.
Insurers may not be able to cover the costs of major cyber attacks
While many insurance companies have begun offering cyber insurance coverage, some of these companies may not have the ability to manage the costs of a major cyber attack. Many cyber liability policies have a limit placed on claims payouts, and insurers are often quick to tout their ability to quickly process claims relating to cyber attacks. In the event of a severe attack, however, especially one committed against a banking organization, insurers may not be able to handle the financial impact effectively.
Major cyber attacks resemble natural disasters in terms of unpredictability
The insurance industry is as afraid of major cyber attacks as any other industry. Like natural disasters, cyber attacks are often unpredictable and their damage could be felt for several years after their occurrence. For insurers, unpredictable risks are often the most expensive to defend against and it can be difficult for insurance companies to provide ample protection against the myriad threats that exist in the digital space.