Switzerland: Financial Sector Assessment Program-Technical Note on Cyber Risk Supervision

This Technical Note focuses on the cyber risk regulatory and supervisory practices within the financial sector broadly, with specific attention to systemically important banks, insurance companies, and financial market infrastructure. The cyber risk management framework has recently been strengthened, with some major changes still to be implemented. There is a need for stricter regulation, more effective supervision, and increased coordination in cyber security matters in the financial sector. The financial system is only as strong as its weakest link, therefore, regulation that covers the entire financial system and more effective supervision would not only help the cyber preparedness of the sector but also increase the attractiveness of the Swiss Financial Center. The scope of relevant regulations should be expanded, beyond banks, to encompass the entire financial sector. The staff resources of Swiss Financial Market Supervisory Authority, Swiss National Bank, and National Center for Cyber Security should be reinforced substantially to adequately monitor cyber risks. Furthermore, coordination among authorities is important, given the shared responsibilities.