LAGOS, Nigeria (VOICE OF NAIJA)-The International Monetary Fund (IMF) has said that financial institutions across the world lost a sum of $12 billion to cyber attacks in the past 20 years.
IMF disclosed this in a report titled, ‘Global Financial Stability Report, April 2024.’
The Bretton Wood institution highlighted the significant exposure of the financial sector to cyber risk, noting that approximately one-fifth of recorded cyber incidents in the last two decades have targeted the financial industry, “with banks being the most frequent targets followed by insurers and asset managers.
“Financial firms have reported significant direct losses, totaling almost $12 billion since 2004 and $2.5 billion since 2020.
“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.
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“JP Morgan Chase, for example, the largest US bank, recently reported experiencing 45 billion cyber events per day while spending $15 billion every year and employing 62,000 technologists, many focused on cyber-security,” IMF stated.
IMF said, Cyber incidents are key operational risks that could threaten the operational resilience of financial institutions and hurt overall macroeconomic stability.
“A cyber incident at a financial institution or at 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,” the report added.
IMF noted that reported direct losses from cyber incidents by firms have generally been small but have the potential to escalate significantly.
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“Based on available data, the median reported direct loss to a firm from all cyber incidents has been about $0.4 million, and three-fourths of the reported losses are below $2.8 million.
“Although losses from malicious incidents have been more than five times as large as those from non-malicious incidents, at around $0.5 million, the magnitude of losses in absolute terms has been generally modest as well.
“For example, most cyber extortions, such as ransomware attacks, or malicious data breaches have resulted in losses of up to $12 million.”
IMF said the distribution is, however, heavily skewed, with some occurrences imposing losses of hundreds of millions of US dollars.