Federal Reserve Warns of Historical Gaps in Banks’ Management of Cyber Risk

Federal Reserve's Vice Chair for Supervision, Michael Barr, addressed historical shortcomings in banks' management of third-party cyber risk during a conference. He expressed concerns about the rising reliance on third-party service providers by banks, leading to increased cyber threats. Barr emphasized the need for banks to not only identify vulnerabilities but also prioritize resilience by developing and testing business continuity plans. He anticipates improvements in quantifying cyber risk through mandatory incident reporting, expecting this to aid threat detection and understanding the broader financial system's interconnectedness.
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