ICBC cyberattack reveals rising risks: DBRS

By James Langton | November 10, 2023 | Last updated on November 10, 2023
2 min read

The recent cyber attack on Industrial and Commercial Bank of China (ICBC) highlights the vulnerability of payments systems and the growing risk to the insurance sector, says DBRS Morningstar in a new report.

This week, the bank reported it suffered a ransomware attack that prevented it from settling clients’ trades in equities and U.S. Treasuries, causing affected asset managers, hedge funds and others to reroute their trades to other firms.

While ICBC hasn’t disclosed the full impact of the event, DBRS said it raises “reputational and vulnerability concerns” for the bank, given its position as the only Chinese bank with a U.S. securities clearing licence.

“As the most significant attack on the U.S. treasury clearing market to date, the ICBC incident highlights the risk of a breakdown of the global payment system,” the report said.

“A long-enough interruption in clearing U.S. Treasuries can potentially trigger an event of default or a force majeure situation under many derivatives contracts, given the prevalent use of government securities as trading collateral,” it added.

Additionally, cyberattacks and ransomware attacks are becoming increasingly frequent and sophisticated, DBRS noted.

“Banking institutions remain a top target for cyber criminals given the large amount and the sensitivity of the data they manage,” it said. “The rise of artificial intelligence also poses the risk of increasingly sophisticated malware, ransomware, and social engineering attacks.”

At the same time, the increased availability and use of cyber insurance, has dramatically increased the interconnection between the banking and insurance industries, DBRS noted.

“Similar to other insurance products potentially exposed to catastrophic losses, reinsurance and insurance companies are paying closer attention to ‘accumulation risk,’ or the risk of a single cyber event affecting a large number of policyholders at the same time,” it said.

“Cyber risk has the potential to generate a chain of highly correlated losses because of the increasing connectivity of global communications and the widespread use of specific operating systems. A systemic event of such scale can potentially cost multiples of the estimated size of the current cyber market,” it warned.

Recently, European securities regulators elevated cyber risk oversight to a top priority for authorities there in the years ahead.

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.