According to the IMF’s April 2024 Global Financial Stability Report, financial institutions worldwide have lost a staggering $12 billion due to cyberattacks over the past two decades.
“Financial firms have reported significant direct losses, totaling almost $12 billion since 2004 and $2.5 billion since 2020,” according to the International Monetary Fund (IMF).
This has sparked concern about the growing frequency of cyberattacks on financial institutions worldwide.
The IMF worries that such attacks might erode trust in the banking sector and destabilize economies.
According to the IMF, banks are prime targets for cybercriminals because of the sensitive data and transactions they manage.
“Attacks on financial firms account for about one-fifth of the total, with banks the most vulnerable. Incidents in the financial sector may jeopardize financial and economic stability if they undermine trust in the financial system, interrupt vital services, or produce spillover effects on other institutions.
These attacks are a severe threat to financial and economic stability because they interrupt vital services and undermine trust in the financial system.
The IMF cites one example as a cyberattack on Lesotho’s Central Bank in December, which interrupted the national payment system and prohibited domestic bank operations.
The IMF reports that financial institutions in affluent economies, particularly the US, are more vulnerable to cyber events than those in emerging markets and developing nations.
The IMF cites the example of JPMorgan Chase, which faces an astounding 45 billion cyber incidents per day. Despite extensively investing in technology and employing thousands of cybersecurity experts, financial institutions continue to be vulnerable to cyber assaults.
The IMF highlights that cyber events pose a considerable operational risk to financial institutions’ resilience and broader macroeconomic stability.
Several reasons contribute to the rise in cyberattacks, including the COVID-19 pandemic’s enhanced digital connectedness and an increased reliance on technology and financial innovation. Geopolitical tensions, such as those caused by conflicts like Russia’s invasion of Ukraine in 2022, heighten cyber threats.
To address these difficulties, the IMF urges central banks and governments to create strong national cybersecurity plans and effective regulations.
Assessing the cybersecurity picture, encouraging financial sector organizations to become more cyber mature, enhancing cyber hygiene, and encouraging stakeholders to share information are all top goals.
Given the global character of cyber threats, international cooperation is required to successfully tackle cyber dangers across boundaries.
