GCC banks are managing their exposure to cyber risks effectively through investment in digital security, according to S&P Global Ratings.
Strong profitability, capitalisation and liquidity provide a financial buffer to the region's lenders against potential cyber incidents, the rating agency said in a report.
Gulf banks have managed to move their activities online during the Covid-19 pandemic with minimal disruption, owing to “years of investment in infrastructure and systems”.
They have reported only a “handful of minor cyber attacks” over the past decade, the report said.
The pandemic has accelerated digitisation of the global banking sector — a trend that was already under way in the Gulf — at an unprecedented rate. More consumers began transacting online at the peak of the pandemic-induced movement curbs.
Amid the accelerated digital transformation and online purchasing, cyber risk emerged as one of the major threats to the operations and credit profiles of financial institutions, S&P said.
“GCC banks laid the foundation for success over several years by investing in infrastructure and systems, including equipment and software, to minimise their exposure to cyber risk … while also benefitting from supportive regulatory frameworks and cyber risk requirements,” the rating agency said.
“There have been no major interruptions to the operations of banks in GCC countries … GCC banks' exposure to cyber risk is manageable, assuming they continue to invest in cyber security and proactively manage risk, taking into consideration the evolving nature of threats.”
Cyber attacks have risen sharply in recent months, with a World Economic Forum report calling 2021 an “unprecedented year for cyber crime in terms of volume and severity”.
Globally, cyber criminal activities were projected to inflict damage worth about $6 trillion in 2021, a study by research company Cybersecurity Ventures found.
Cyber crime costs are expected to increase nearly 15 per cent on a yearly basis worldwide over the next three years to reach $10.5tn annually by 2025 — from $3tn in 2015, the California-based firm said.
Over the years, the GCC banks have adopted strong regulatory frameworks focused on improving cyber security.
For example, the Central Bank of the UAE last year established a networking and cyber security operations centre to protect the local financial system against cyber attacks.
The Saudi Central Bank's cyber security framework, issued in 2017, defined requirements around governance, risk management, compliance, operations, technology and the use of third-party cyber security services by regulated entities. This year, those rules were supplemented with a document on cyber threat intelligence principles, which addressed the production and dissemination of intelligence aimed at identifying and minimising cyber threats.
The Central Bank of Qatar also published a circular in 2018 outlining the regulatory requirements banks must fulfil to effectively manage cyber risk.
Cyber risks range from a temporary interruption of services to a complete shutdown of IT systems.
They can harm banks' credit profiles through reputational damage, as well as monetary loss. In extreme cases, they could have negative implications on liquidity through a sudden outflow of funds.
Data breaches are among the biggest risks, said S&P report, which is supported by data from cyber security specialist Guidewire.
The data estimated that GCC's top 19 banks would suffer an average 7.5 per cent fall in net income and a 0.6 per cent decline in equity (based on figures from the end of 2021) under a high-severity cyber incident. The banks' average operational risk capital charge was 3.6 per cent of the total equity.
“Data suggests that GCC banks appear to have sufficient operational risk capital to cover losses related to cyber risk,” S&P said.
GCC banks have faced sporadic incidents of cyber attacks in the past.
Hackers claimed to gained access to the servers of one bank in the Gulf and leaked personal data of its customers, S&P report said. Documents were subsequently posted to the whistleblower site Cryptome in April 2016. The leak comprised more than 15,000 files, including passwords, personal identification numbers and payment card data.
In October 2018, an attack on Pakistan's banking system resulted in the theft of details relating to more than 19,000 debit cards, including 25 cards issued by a Bahraini bank with operations in Pakistan.
In February 2013, a bank in Oman said that 12 of its credit cards were compromised in an alleged hack originating from outside the sultanate.
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Company profile
Name: Fruitful Day
Founders: Marie-Christine Luijckx, Lyla Dalal AlRawi, Lindsey Fournie
Based: Dubai, UAE
Founded: 2015
Number of employees: 30
Sector: F&B
Funding so far: Dh3 million
Future funding plans: None at present
Future markets: Saudi Arabia, potentially Kuwait and other GCC countries
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The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part three: the age of the electric vehicle begins
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The biog
Job: Fitness entrepreneur, body-builder and trainer
Favourite superhero: Batman
Favourite quote: We must become the change we want to see, by Mahatma Gandhi.
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Brief scores
Barcelona 2
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Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
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Company profile
Company name: Suraasa
Started: 2018
Founders: Rishabh Khanna, Ankit Khanna and Sahil Makker
Based: India, UAE and the UK
Industry: EdTech
Initial investment: More than $200,000 in seed funding
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Sukuk explained
Sukuk are Sharia-compliant financial certificates issued by governments, corporates and other entities. While as an asset class they resemble conventional bonds, there are some significant differences. As interest is prohibited under Sharia, sukuk must contain an underlying transaction, for example a leaseback agreement, and the income that is paid to investors is generated by the underlying asset. Investors must also be prepared to share in both the profits and losses of an enterprise. Nevertheless, sukuk are similar to conventional bonds in that they provide regular payments, and are considered less risky than equities. Most investors would not buy sukuk directly due to high minimum subscriptions, but invest via funds.
Concrete and Gold
Foo Fighters
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About Housecall
Date started: July 2020
Founders: Omar and Humaid Alzaabi
Based: Abu Dhabi
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# of staff: 10
Funding to date: Self-funded
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ALL THE RESULTS
Bantamweight
Siyovush Gulmomdov (TJK) bt Rey Nacionales (PHI) by decision.
Lightweight
Alexandru Chitoran (ROU) bt Hussein Fakhir Abed (SYR) by submission.
Catch 74kg
Omar Hussein (JOR) bt Tohir Zhuraev (TJK) by decision.
Strawweight (Female)
Seo Ye-dam (KOR) bt Weronika Zygmunt (POL) by decision.
Featherweight
Kaan Ofli (TUR) bt Walid Laidi (ALG) by TKO.
Lightweight
Abdulla Al Bousheiri (KUW) bt Leandro Martins (BRA) by TKO.
Welterweight
Ahmad Labban (LEB) bt Sofiane Benchohra (ALG) by TKO.
Bantamweight
Jaures Dea (CAM) v Nawras Abzakh (JOR) no contest.
Lightweight
Mohammed Yahya (UAE) bt Glen Ranillo (PHI) by TKO round 1.
Lightweight
Alan Omer (GER) bt Aidan Aguilera (AUS) by TKO round 1.
Welterweight
Mounir Lazzez (TUN) bt Sasha Palatkinov (HKG) by TKO round 1.
Featherweight title bout
Romando Dy (PHI) v Lee Do-gyeom (KOR) by KO round 1.
Mohammed bin Zayed Majlis
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5.
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The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
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At a glance
- 20,000 new jobs for Emiratis over three years
- Dh300 million set aside to train 18,000 jobseekers in new skills
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Mina Al Oraibi: Air strike casts a long shadow over the decade ahead
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Matthew Levitt: Iran retains its ability to launch terror attacks
Damien McElroy: A CEO tasked with spreading Iran's influence
Hussein Ibish: Trump's order on solid constitutional ground
Simon Waldman: Cautious Israel keeping a low profile
Rashmee Roshan Lall: Sound of silence in South Asia
Fanar Haddad: The Iranian response will be gradual
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Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
The specs: 2018 Harley-Davidson Fat Boy
Price, base / as tested Dh97,600
Engine 1,745cc Milwaukee-Eight v-twin engine
Transmission Six-speed gearbox
Power 78hp @ 5,250rpm
Torque 145Nm @ 3,000rpm
Fuel economy, combined 5.0L / 100km (estimate)
Our commentary on Brexit
- Con Coughlin: Choice of the British people will be vindicated
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Mina Al Oraibi: Air strike casts a long shadow over the decade ahead
Jack Moore: Why the assassination is such a monumental gamble
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HAJJAN
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Mohammed bin Zayed Majlis
Tomorrow 2021
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How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
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Director: Anna Boden, Ryan Fleck
Starring: Brie Larson, Samuel L Jackson, Jude Law, Ben Mendelsohn
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AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
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The%20Roundup%20%3A%20No%20Way%20Out
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Comment on Coronavirus
FIXTURES
Saturday
5.30pm: Shabab Al Ahli v Al Wahda
5.30pm: Khorfakkan v Baniyas
8.15pm: Hatta v Ajman
8.15pm: Sharjah v Al Ain
Sunday
5.30pm: Kalba v Al Jazira
5.30pm: Fujairah v Al Dhafra
8.15pm: Al Nasr v Al Wasl
Company Fact Box
Company name/date started: Abwaab Technologies / September 2019
Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO
Based: Amman, Jordan
Sector: Education Technology
Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed
Stage: early-stage startup
Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.
