The financial sector has incurred staggering losses of $12 billion over the past two decades due to more than 20,000 cyberattacks, according to the latest report by the International Monetary Fund (IMF). This concerning trend is attributed to the increasing digitization of financial services and geopolitical tensions.
In the wake of the Covid-19 pandemic, cyberattacks reported by financial firms have doubled, with direct losses soaring to $2.5 billion. Financial institutions, including banks, bear the brunt of these attacks due to the vast amount of sensitive data and transactions they handle.
Weakness in the Financial Sector
“These attacks not only pose immediate financial threats but also have the potential to undermine confidence in the financial system,” notes Fabio Natalucci, Mahvash Qureshi, and Felix Suntheim, authors of the IMF report. Indeed, cyber incidents disrupting critical services like payment networks could severely impact economic activity, as evidenced by the December attack at the Central Bank of Lesotho.
Addressing cyber risks necessitates collaborative efforts at both national and international levels. Effective regulation and supervision, along with public intervention, are crucial to mitigate systemic risks. To bolster the resilience of the financial sector, comprehensive cybersecurity strategies and regulations must be prioritized, including fostering cyber resilience among financial firms and promoting information sharing.
These findings align with a recent report by Finance Magnates, highlighting the growing threat of cyberattacks faced by the financial services sector in Europe. Distributed denial-of-service attacks, in particular, have surged in recent years, posing a significant challenge to the stability and security of financial institutions across the continent.
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As per Akamai Technologies’ report, web application and API attacks in the Europe, Middle East, and Africa region saw a staggering 119% year-over-year increase, with the financial sector ranking as the third most targeted industry. The banking and insurance sectors, in particular, are vulnerable due to the sensitive nature of the data they handle, making them attractive targets for cybercriminals.
