The influence of Financial Indicators and the impact of Cybersecurity policy on bank’s performance.
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Date
2024-05-31Author
Kosta, NeofytosPublisher
Πανεπιστήμιο Κύπρου, Σχολή Οικονομικών Επιστημών και Διοίκησης / University of Cyprus, Faculty of Economics and ManagementGoogle Scholar check
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This study explores the relationship between bank cybersecurity policies and bankruptcy risk by integrating cybersecurity metrics with traditional financial indicators. Using data from 2013-2022, the research employs a mixed methods approach to enhance the predictive accuracy of bank bankruptcy models. Logistic regression analysis reveals that banks with robust cybersecurity policies are approximately 2.8 times less likely to face bankruptcy compared to those without such policies. Additionally, a significant positive correlation between capital adequacy and the presence of cybersecurity measures highlights the financial resilience conferred by these practices. Despite these findings, the overall model fit is modest, indicating the need for further refinement to fully capture the interplay between cybersecurity and financial stability. The results suggest that integrating cybersecurity considerations into traditional financial health assessments can provide a more comprehensive understanding of bank resilience, offering valuable insights for bank executives, policymakers, and investors. This study contributes to the literature by emphasizing the critical role of cybersecurity in mitigating default risk and promoting financial stability, advocating for a holistic approach to financial risk management in the digital era.