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Moody's: Rise in South Korean banks' cybersecurity investment is credit positive

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Moody's: Rise in South Korean banks' cybersecurity investment is credit positive

South Korean banks' increased investment in cybersecurity in order to decrease cyber risk is credit positive for the lenders and system stability, Moody's said Sept. 15.

The rating agency's comments follow the release of Bank of Korea's annual financial information technology development survey report. Based on a survey of 19 South Korean banks, cybersecurity-related spending totaled 259 billion South Korean won in 2018.

Banks' investment in cybersecurity rose 5% year over year in 2018, after spending rose 19% in 2017, according to the central bank's report.

The collective improvement of the financial institutions' IT capabilities is in part enforced by the regulators' guidance on their IT spending, Moody's said.

The rating agency said that banks' reliance on external vendors for IT will continue to rise because of the increase in cloud computing usage. It added that the strength of a bank's cyber risk defenses and prevention of customer information breaches may be limited to the weakest link of the banks' suppliers.

As of Sept. 13, US$1 was equivalent to 1,177.03 South Korean won.