The International Monetary Fund (IMF) has revealed that over the past two decades, global financial institutions have reported significant losses amounting to $12 billion as a result of cyberattacks.
Out of this amount, $2.5 billion was lost between 2020 and 2024. The report by the IMF underscores the pervasive and costly nature of cyber threats within the financial sector, with the international organization expressing concern that the rising incidents could affect confidence in the financial system and destabilize economies.
Speaking on this, the IMF wrote,
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
“Attacks 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. 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. Financial institutions in advanced economies, particularly in the United States, have been more exposed to cyber incidents than firms in emerging market and developing economies”.
Addressing the issue of why cyberattacks have continued to increase, with attacks ranging from data breaches to ransomware incidents, the IMF said that there are several factors behind it. The international organization noted that one major increase in cyberattacks is attributed to increasing digitization.
As businesses, governments, and individuals rely heavily on digital technologies for everyday activities, the attack surface for cybercriminals expands. More devices, networks, and systems are interconnected, providing attackers with more opportunities for exploitation.
Also, experts have pointed to two factors- the first which is the rise of attacks from Russia since the start of the war in Ukraine and the use of artificial intelligence to help bad actors write more sophisticated malware. It was observed that there were more destructive cyber attacks in Ukraine during the first four months of 2022 than in the previous eight years with attacks peaking around the start of the invasion.
On the second, they noted that while ChatGPT might have safeguards built in, it has rivals sold on the dark web with no ethical safeguards, making it easier than ever to write code for nefarious purposes.
In other to mitigate and prevent cyberattacks on financial institutions, the IMF noted that Central Banks and authorities will need to develop an adequate national cybersecurity strategy accompanied by effective regulations and supervisory capacity.
Notably, as these attacks have become more sophisticated, they require a multi-faceted approach involving improved cybersecurity measures, international cooperation, and greater awareness and education about cyber threats.