Assessing and managing cyber risk have recently turned into an extensive challenge that financial institutions are facing due to the growing threats of cyber crimes and information security breaches, both in quantity and magnitude. The drastic growth of these attacks aimed at financial institutions over the recent years, means these institutions have to identify and quantify their risk exposure with respect to these risks. Subsequently, banks and insurance companies need to design preventive actions and where relevant pay (re)insurance premiums for indemnities against the impacts of cyber risk.

This article addresses the topic of cyber risk and different aspects of the mitigation of its adverse effects on financial institutions.