The International Monetary Fund (IMF),has said that financial institutions have lost $12 billion to cyberattacks over the past 20 years.
From 2020 to 2024, $2.5 billion of this sum was lost, according to the IMF’s newly issued April 2024 Global Financial Stability Report. The group has voiced worry that the increasing number of cyberattacks on financial institutions worldwide may undermine trust in the financial system and cause economic instability.
“Financial firms have reported significant direct losses, totaling almost $12 billion since 2004 and $2.5 billion since 2020,” the IMF stated.
According 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.
“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,” IMF stated.
“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,” it added.
Citing 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 – many focused on cybersecurity.
It added that cyber incidents are a key operational risk that could threaten financial institutions’ operational resilience and adversely affect overall macrofinancial stability.
The 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 – and increasing dependency on technology and financial innovation.
It added that geopolitical tensions may also be a contributing factor, considering the surge of cyberattacks after Russia’s invasion of Ukraine in February 2022.
“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 those cyber incidents at major financial institutions, could threaten financial stability,” it said.
