CYBER INSURANCE IN THE BANKING SECTOR: IDENTIFICATION OF RISKS AND SECURITY SUPPORT TOOLS

Abstract

Introduction. This article provides an overview of the knowledge gaps related to cyber insurance as a risk management strategy specifically for banking institutions, which are today's allotment sites for collecting the public's money as well as sensitive personal information. Most often, banks can be targets for cyberattacks, because in today's world, in the conditions of digitalization and technological development, the entire banking system rests on systems and programs that have vulnerabilities precisely from cyber threats. The threat of loss of important personal data of customers, funds in individual accounts of individuals and legal entities, can lead not only to personal losses of the bank, but also cause losses to the bank's customers themselves, which directly affects the economy of the entire country, which is why the question of cyber insurance for banking institutions should be raised at the state level. Cyber risk, as one of the operational risks, should be included in the risk management system of banking activity, and cyber insurance should be the most important tool for hedging against potential losses from this type of risk. Accordingly, against the background of the relevance of consideration of the issue of cyber risk, it is advisable to study the experience of other countries and try to acclimatize it with certain changes in Ukraine, because the complete copying of foreign practice may not take root in our country, due to the peculiarities and specifications of conducting banking and insurance business in Ukraine . Against the background of increasing cyber attacks on the banking sector of Ukraine, the urgency of considering potential hedging factors increases, and cyber insurance becomes one of the main directions of transferring cyber risk to a third party. To reduce the probability of a cyber incident and minimize losses from such a risk, cyber insurance should act in conjunction with the modernization and constant updating of ICT systems on which the banking system operates, conducting training and education for employees on the topic of cyber protection, as well as a number of other factors, which are described in this article.

Materials and methods. Statistical information, scientific works of foreign and domestic scientists, economists, financiers and experts in the financial sector, as well as sources for information terms of cyber incidents formed the basis of the information base for writing the article and conducting related research.

Results and discussion. Based on the results of the research, it can be concluded that cyber insurance as a type of insurance in Ukraine is at the stage of formation. With the growing number of cyber attacks on the banking sector of Ukraine, the relevance of cyber insurance as a hedging tool is growing every year. In the conditions of digitization, the entire operational activity of the bank works on electronic ICT systems, which must be protected from potential cyber threats, because the faulty operation of the bank potentially leads to losses not only for the subject of banking activity itself, but also for the bank's clients, which is a threat to of the entire economy of the country.

Conclusions. Based on the study of the issue of cyber insurance as the main tool for hedging cyber risks for the banking sector and problems in drawing up cyber insurance contracts, proposals were made to determine the strategic directions of the development of cyber insurance in Ukraine, which appeared against the background of new challenges and threats.