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BaFin increases focus on IT outsourcing risks

BaFin increases focus on IT outsourcing risks

Cybersecurity and the outsourcing of IT services are among the greatest risks to the financial sector, warns a new report from German regulator BaFin.

The watchdog has named the seven risks it considers most capable of jeopardising Germany's financial stability. Of these, one is new for 2024 - market concentration in the outsourcing of IT service.

"In some sectors in Germany, a small number of specialised IT service providers serve a large proportion of banks and insurers," warns the report.

Among the other concerns highlighted is the risk of cyberattacks and of inadequate money laundering prevention.

Mark Branson, president, BaFin, says: "Institutions shouldn’t underestimate risk provisioning needs, and, more than ever, companies should be investing in their operational security and stability."

Read the report (German)

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