The banking sector is becoming more exposed to cyber crime after Covid-19 pandemic accelerated digitalisation and remote working, S&P Global Ratings said on Tuesday.

Cyber attacks can harm credit ratings mainly through reputational damage and potential monetary losses, it said in a report titled 'Cyber Risk In A New Era: The Effect On Bank Ratings.'

"Cyber attacks have had only a limited effect on bank ratings to date but can trigger more rating actions in the future as cyber incidents become more frequent and complex," said Credit Analyst Irina Velieva.

Banks and other financial institutions are attractive targets for cyber criminals because they possess valuable personal data and play a critical role in servicing particular financial or economic needs and segments.

Institutions with weak risk governance are less prepared for, and therefore more vulnerable to cyber attacks, said S&P in the report.

"Although it is crucial to learn from previous attacks and strengthen cyber-risk frameworks in real time, the appropriate detection and remediation of attacks takes precedence because the nature of threats will continue to evolve."

S&P said cyber defence will become an increasingly important part of entities' general risk management and governance frameworks, in need of increasing spending and more sophisticated tools.

"We acknowledge, however, that this might not be straightforward for many entities, especially the ones with weaker risk-control frameworks and insufficient budget allocated for cyber defence."