EBA unveils new risks and vulnerabilities in the EU banking sector

New and high risks have emerged and cyber and data security are among the most challenging ones for the EU banking sector. In addition, risks posed by cyberattacks, their volume and sophistication are unabatedly high. While banking operations have become increasingly dependent on IT platforms, cost pressures and operational challenges have contributed to an increasing reliance on third party service providers that a range of IT services and data are outsourced to.

The report is based on data collected from 132 banks across the EU. The data shows further resilience in the EU banking sector amid a benign macroeconomic and financial environment, with an additional strengthening of the capital position, an improvement of asset quality and a slight increase of profitability.

However, further progress on non-performing loans (NPLs) is needed whilst the long-term sustainability of prevailing business models remains a challenge. The importance of robust data management and IT and operational resilience is also a priority.