Testing of EU Banks’ Cyber Defenses Needs Common EU Approach: Official

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European Union countries should test bank defenses against cyber attacks using a common set of requirements, a senior EU official said on Tuesday, as the bloc plans measures to boost the retail market for financial products.

Cyber attacks against banks have increased in numbers and sophistication in recent years, raising questions on lenders’ capacity to protect their customers.

Seeking to reassure savers and strengthen financial stability, several EU countries are conducting tests on banks’ security systems, but EU authorities warned national initiatives may be less effective and more costly than a common EU approach.

“We want to avoid a proliferation of testing obligations that operate in different countries,” the EU commission’s vice president Valdis Dombrovskis told a conference in Brussels.

“We believe tests that meet comparable standards should be recognized across borders,” he added. This could pave the way for common stress-tests carried out at EU level, as suggested by EU officials in past weeks.

The call for higher cyber security comes as the Commission prepares a policy action plan on retail financial services, such as insurance, loans and payments, that will be released in the coming weeks.

Dombrovskis said the plan would encourage the use of remote identification schemes, such as e-signature and e-identification, to try to boost consumers’ access to financial services and lower costs.

It will also attempt to facilitate the take-up of new technologies in the financial sector, where emerging fintech companies are challenging traditional actors in a range of services, including payments and insurance.

“Our focus should be on removing barriers to market entry and keeping our legislation proportionate,” Dombrovskis said, noting that changes may create new risks that need to be addressed with greater sharing of information among financial firms and common testing of security systems.

(Reporting by Francesco Guarascio; Editing by Keith Weir)