Mapping cyber-financial risk profiles: implications for European cybersecurity and financial literacy

Abstract

This study investigates the landscape of cyber-financial risks across Europe by identifying distinct risk profiles based on financial literacy, digital comfort, and economic vulnerability. Utilizing data from the Flash Eurobarometer 525 survey, we employ K-means cluster analysis to categorize European citizens into five distinct cyber-financial risk profiles: Cyber-Savvy Pragmatists, Digital-Savvy Vulnerable individuals, Cautious Traditionalists, Comfortably Naive individuals, and Digitally Hesitant At-Risk individuals. Our findings show significant variations in risk profiles across demographic groups and European regions, with gender disparities and educational differences. We examine how self-perceived financial knowledge and financial decision-making patterns differ across these profiles, uncovering potential overconfidence in some groups that may exacerbate cyber-financial vulnerabilities. This study also explores regional distributions of risk profiles, highlighting areas of heightened cybersecurity concern across Europe. Our results indicate that cybersecurity strategies should be tailored to address the specific vulnerabilities of each risk profile, with particular attention to gender-based disparities and regional variations. This research contributes to a better understanding of cyber-financial risks in Europe and offers actionable information for policymakers, financial institutions, and cybersecurity professionals in developing targeted interventions to enhance digital financial security across diverse populations.