Financial supervision: BaFin: Threat from cyber attacks increases

The financial supervision Bafin demands more provision against growing IT risks and the progressive climate change from banks and insurers. “The threat of cyber incidents is very high worldwide. And it continues to increase. Also due to the tense geopolitical situation,” warns the President of the Federal Financial Supervisory Authority (BAFIN).

Many companies in the financial sector and their central service providers are part of the critical infrastructure – “” and thus an attractive goal for the state’s attacks “. In the first three quarters in 2024, 258 reports about IT incidents in payment services were submitted to BAFIN and thus significantly more than in previous years.

The threat is also increasing because of the diverse new technological possibilities – such as generative artificial intelligence (AI). “Of course, criminals also use such technologies. For example, to develop new attack methods or malice codes,” said Branson.

The financial supervision calls on the financial institutions to use the strong yields of 2024 to further invest in the security of their IT. “We expect that. And your customers expect that,” emphasized the Bafin boss.

Climate change is progressing

In view of the devastating fire like in Los Angeles and huge floods like in the Spanish region of Valencia, the BaFin boss also commented on natural disasters and their huge costs. Climate change is progressing, “the physical risks continue to increase,” said Branson. “And they will be reflected in the banks ‘loan portfolios or in the insurers’ claims.”

In the management of their sustainability risks, the companies have “fundamentally made progress”. However, there are still data gaps so that insurers and banks could not completely assess risks.

Economic weakness brings more credit cases

Another risk factor: the German economy. After the second year of recession in a row, economists trust this in 2025 at best. The number of company bankruptcies is skyrocketed. The risk that borrowers can no longer pay their rates increases. “We expect the proportion of problematic loans to continue to increase,” said Branson. For this, banks would have to provide for this.