DBRS Morningstar Publishes Commentary on Data Privacy & Security Risks and Rating Implications for Canadian Credit Unions

DBRS Limited (DBRS Morningstar) published a commentary titled “Data Privacy & Security Risks and Rating Implications for Canadian Credit Unions,” which highlights key data privacy and security issues facing the Canadian credit union industry, the preparedness of credit unions to manage data privacy and security risks, and the rating implications from the mismanagement of these risks.

Key highlights include the following:

-- Canadian credit unions are exposed to data privacy and security risks as a consequence of managing large pools of personal identifiable information of their members.
-- Overall, data privacy and security risks are generally well managed in the credit union industry.
-- A lapse in data privacy and security risk management can have negative implications for ratings depending upon the severity and the recurring nature of one or more issues.

“As Canadian credit unions adapt to a dynamic and evolving technological landscape, they are being increasingly exposed to data privacy and security risks, with the large credit unions likely better positioned to manage a negative fallout from a data privacy and security event in comparison to the small and medium-size credit unions,” said Sohail Ahmer, Vice President, Global Financial Institutions Group, at DBRS Morningstar.

“For a credit union’s rating to be affected, it would likely have to experience severe and persistent failures in its data privacy and security infrastructure, resulting in a material and sustained deterioration to the franchise and financial performance.”

Notes:
The commentary is available at www.dbrsmorningstar.com.

For more information on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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