Cyber crime ‘biggest risk to banks’ during coronavirus crisis

Cyber criminals taking advantage of the COVID-19 situation to hit customers and banks, says ANZ chief risk officer.

A work-from-home environment could pose additional security risks, says ANZ.

ANZ chief risk officer Kevin Corbally believes the biggest threat to the financial sector during the coronavirus shutdown is heightened cyber-criminal activity.

In an internal video released to ANZ staff and shareholders on Thursday, Mr Corbally stressed the current work-from-home environment could pose additional security risks, as cybercrime syndicates are likely capitalising on Australia’s stretched telecommunication infrastructure.

“I would argue that in the current environment, they’re probably even higher risks now as criminal activities. Criminals look at how they can actually utilise the COVID-19 situation to impact our customers and our bank as well,” Mr Corbally said.

While COVID-19 has put a spotlight on credit risks impacting the capital buffers of major banks, company data protection concerns have relatively gone unnoticed.

Mr Corbally noted remote working has placed additional pressures upon telecommunication frameworks, potentially implicating internal cybersecurity measures that protect consumer financial data.

“With everyone working from home, there’s a huge impact on the telecommunications infrastructure that we’re using,” Mr Corbally said.

“So the risk of one of those telecommunication infrastructures falling over is another one we need to focus on.”

The head of ANZ’s risk division also flagged criminals are likely to take advantage of greater human error during the pandemic, as remote working placed greater stress and fatigue on employees.

The major bank indicated anti-money laundering risks would be of ongoing concern throughout the pandemic.

“ANZ is aware that threats to its information are continuously evolving and likely to be elevated as criminal activity seeks to exploit the COVID-19 situation by activities such as advanced persistent threats, phishing, distributed denial of service, social engineering, malware and ransomware,” Mr Corbally said.

Coronavirus has already inflicted a significant blow to ANZ’s financial position, with its interim statutory profit slumping by 51 per cent to $1.55bn for the six months to March 31 and incurring a credit provision charge $1.67bn.

Its financial woes also prompted the bank to defer its interim dividend payment to shareholders until at least August. 

ANZ indicated approximately 10 per cent of its home loan customers and roughly 15 per cent of business banking customers have requested loan repayment deferrals because of the virus.

Mr Corbally said customers taking up repayment deferrals were not being treated as an impaired loan, with incurred hardship costs already being factored into the bank’s credit provision estimates for the remainder of its financial year.

“What APRA, and what the International Accounting Standards Board has said, is that we as a bank should not view that period of deferral as a period in which the customer is in arrears,” Mr Corbally said.

“One of the things obviously we will also look to do going forward, is make sure we keep in contact with those customers and talk to them regularly, and connect with them over that six-month period, to ensure that their situation doesn’t actually change.”