IMF advocates national strategy as banks lose $2.5bn to cyberattacks

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The International Monetary Fund has called for immediate action on national cybersecurity strategies as global banks suffer $2.5bn loss to cyberattacks in four years.

The IMF said in its April 2024 Global Financial Stability Report, released recently, that $12bn has been lost in the last 20 years to cyberattacks.

“Financial firms have reported significant direct losses, totalling almost $12bn since 2004 and $2.5bn since 2020,” it stated.

The multilateral lender noted that central banks and authorities would need to develop an adequate national cybersecurity strategy accompanied by effective regulation and supervisory capacity.

It warned that banks must periodically assess the cybersecurity landscape and identify potential systemic risks from interconnectedness and concentrations, including from third-party service providers.

The IMF urged financial institutions to prioritise improving cyber hygiene, encompassing measures such as bolstering online security, ensuring system health through initiatives like antimalware and multifactor authentication, and fostering comprehensive training and awareness programmes.

It further advocated facilitating board-level access to cybersecurity expertise, as analysis suggests that bolstered cyber-related governance could significantly mitigate cyber risk.

The fund urged financial institutions to prioritise data reporting and collection of cyber incidents and sharing information among financial sector participants to enhance their collective preparedness.

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.

“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,” the IMF stated.

The Financial Institutions Training Centre report on fraud and forgeries in Nigerian banks for the second quarter of 2023 revealed a growing threat of financial fraud within the sector.

The total amount involved in fraud cases during the period surged to N9.75bn, marking an increase of 276.98 per cent from N2.58bn recorded in the preceding first quarter of 2023.

According to the report, the total losses resulting from these incidents amounted to N5.79b, representing a rise of 1,125 per cent compared to N472m lost in Q1’23.

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