Financial services firms have incurred $12 billion in losses due to cyber attacks over the past two decades, according to a recent report from the International Monetary Fund (IMF).
Data indicates that there is little sign of a reduction in risk, prompting the IMF to advocate for enhanced cross-border cooperation to protect the stability of the global financial system. The number of incidents doubled since the pandemic, with extreme losses rising more than fourfold since 2017 to reach $2.5 billion.
The report highlights that indirect losses, including reputational damage and the costs of security updates, are significantly greater. The magnitude of losses experienced by banks, asset managers, and insurers has led the IMF to view cyber attacks as an escalating threat to financial stability.
“Attacks on financial institutions account for nearly 20% of the total, with banks being the most vulnerable,” wrote the authors of the study—Fabio Natalucci, Mahvash Qureshi, and Felix Suntheim. They noted that while cyber incidents have thus far not been systemic, they can pose severe risks to macro-financial stability through loss of confidence and disruption of essential services, particularly due to technological and financial interconnectedness.
The report also indicates that banks in advanced economies face greater exposure compared to those in developing countries. For instance, JP Morgan, the world’s largest bank by assets, reported facing as many as 45 billion cyber threats daily and is investing $15 billion annually in technology to counter these threats.
In summary, the IMF emphasizes the need for improved international cooperation to effectively manage the risks associated with cyber attacks, stating, “Given the global nature and systemic implications of cyber attacks, cross-border coordination is crucial to mitigate cyber risks.”