Financial institutions Losses $12 To Cyberattacks In 20 Years - IMF

The financial institutions across the globe lost $12 billion to online attacks in the last two decades through various activities of cyber criminals.

The International Monetary Fund (IMF) disclosed this, saying out of this amount, $2.5 billion was lost between 2020 and 2024.

Also, IMF’s April 2024 Global Financial Stability Report, which disclosed this noted that the spate of cybercrimes is not abating, therefore, efforts must clip its wings. The body said the rising incidents of cyberattacks on financial institutions globally could affect confidence in the financial system and destabilize economies.

The IMF said, “Financial firms have reported significant direct losses, totaling almost $12 billion since 2004 and $2.5 billion since 2020."

The body explained that 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.

IMF stated, “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 markets and developing economies."

Citing JPMorgan Chase as an example, the IMF stated that the largest U.S. bank recently reported experiencing 45 billion cyber events per day while spending $15 billion on technology every year and employing 62,000 technologists – many focused on cybersecurity.

According to it, many factors contribute to the rise in cyber incidents. These, it said, include the rapidly growing digital connectivity- accelerated by the COVID-19 pandemic – and increasing dependency on technology and financial innovation.

It said, “A cyber incident at a financial institution or a country’s critical infrastructure could generate macro-financial stability risks through three key channels: loss of confidence, lack of substitutes for the services rendered, and interconnectedness.

“While 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.

“Recent significant cyber incidents such as the ransomware attack on the US arm of China’s largest bank, the Industrial and Commercial Bank of China, on November 8, 2023, which temporarily disrupted trades in the US Treasury market — further underscore that cyber incidents at major financial institutions could threaten financial stability."

In order to strengthen resilience in the financial sector, the IMF urged the central banks and authorities to develop an adequate national cybersecurity strategy accompanied by effective regulation and supervisory capacity.