"Global financial institutions lost $12 billion to cyberattacks in 20 years \u2013 IMF"

" Global financial institutions lost $12 billion to cyberattacks in 20 years \u2013 IMF \r\nThe International Monetary Fund (IMF) has revealed that financial institutions\u00a0 lost a total of $12 billion to cyberattacks in the last 20 years.\r\n\r\nOut of this amount, $2.5 billion was lost between 2020 and 2024, according to IMF\u2019s April 2024 Global Financial Stability Report\u00a0 released recently. This is even as the body expressed concern that the rising incidents of cyberattacks on financial institutions globally could affect confidence in the financial system and destabilize economies.\r\n\r\n \u201cFinancial firms have reported significant direct losses, totaling almost $12 billion since 2004 and $2.5 billion since 2020,\u201d\u00a0 the IMF stated.\r\n Banks as primary target \r\nAccording to the body, financial firms, given the large amounts of sensitive data and transactions they handle, are often targeted by criminals seeking to steal money or disrupt economic activity.\r\n\r\n \u201cAttacks on financial firms account for nearly one-fifth of the total, of which banks are the most exposed. Incidents in the financial sector could threaten financial and economic stability if they erode confidence in the financial system, disrupt critical services, or cause spillovers to other institutions. \r\n\r\n Cyber incidents that disrupt critical services like payment networks could also severely affect economic activity. For example, a December attack at the Central Bank of Lesotho disrupted the national payment system, preventing transactions by domestic banks,\u201d \u00a0IMF stated.\r\n\r\n \u201cFinancial institutions in advanced economies, particularly in the United States, have been more exposed to cyber incidents than firms in emerging market and developing economies,\u201d\u00a0 it added.\r\n\r\nCiting JPMorgan Chase as an example, the IMF said the largest US bank recently reported experiencing 45 billion cyber events per day while spending $15 billion on technology every year and employing 62,000 technologists \u2013 many focused on cybersecurity.\r\n\r\nIt added that cyber incidents are a key operational risk that could threaten financial institutions\u2019 operational resilience and adversely affect overall macrofinancial stability.\r\n Why cyberattacks are rising \r\nThe IMF noted that many factors contribute to the rise in cyber incidents. These, it said, include the rapidly growing digital connectivity- accelerated by the COVID-19 pandemic \u2013 and increasing dependency on technology and financial innovation.\r\n\r\nIt added that geopolitical tensions may also be a contributing factor, considering the surge of cyberattacks after Russia\u2019s invasion of Ukraine in February 2022.\r\n\r\n \u201cA cyber incident at a financial institution or a country\u2019s critical infrastructure could generate macro-financial stability risks through three key channels: loss of confidence, lack of substitutes for the services rendered, and interconnectedness. \r\n\r\n \u201cWhile cyber incidents thus far have not been systemic, ongoing rapid digital transformation and technological innovation such as artificial intelligence and heightened global geopolitical tensions exacerbate the risk. \r\n\r\n \u201cRecent significant cyber incidents\u2014such as the ransomware attack on the US arm of China\u2019s largest bank, the Industrial and Commercial Bank of China, on November 8, 2023, which temporarily disrupted trades in the US Treasury market\u2014further underscore that cyber incidents at major financial institutions could threaten financial stability,\u201d\u00a0 it said.\r\n What central banks need to do \r\nTo strengthen resilience in the financial sector, the IMF said central banks and authorities will need to develop an adequate national cybersecurity strategy accompanied by effective regulation and supervisory capacity that should encompass:\r\n \r\n \t Periodically assessing the cybersecurity landscape and identifying potential systemic risks from interconnectedness and concentrations, including from third-party service providers; \r\n \t Encouraging cyber \u201cmaturity\u201d among financial sector firms, including board-level access to cybersecurity expertise, as supported by the chapter\u2019s analysis which suggests that better cyber-related governance may reduce cyber risk. \r\n \t Improving cyber hygiene of firms\u2014that is, their online security and system health (such as antimalware and multifactor authentication)\u2014and training and awareness. \r\n \t Prioritizing data reporting and collection of cyber incidents, and sharing information among financial sector participants to enhance their collective preparedness. \r\n \r\nNoting that attacks often emanate from outside a financial firm\u2019s home country and proceeds can be routed across borders, the IMF said international cooperation has also become imperative to address cyber risk successfully."

"Global financial institutions lost $12 billion to cyberattacks in 20 years \u2013 IMF"

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