Cyberattacks on Small Banks

Cyberattacks on Small Banks

Authors: Fabian Gogolin, University of Leeds, Leeds, England.; Ivan Lim, Durham University, Durham, England; and Francesco Vallascas, Durham University

Key Findings: The authors study cyberattacks at small banks with assets less than $10 billion that occurred between 2005 and 2017. The attacks were external data breaches involving losses of personal information by hacking or malware/electronic entry. Cyberattacks led to an outflow of deposits at affected banks. Larger deposit outflows are observed in markets with less digital literacy and markets where large banks dominate. The authors conclude that cyberattacks reduce the trust of bank customers by generating bank-specific reputational damage.