On June 25th, the International Monetary Fund (IMF) published a technical study in which they highlight the annual losses of financial institutions caused by cyber attacks. They estimate that these cyber attacks could reach “hundreds of billions of dollars”. As a result, bank profits could deteriorate and financial institutions would face high reputation costs. Against this backdrop, the IMF recommends governments to strengthen their regulatory and supervisory regimes to address cyber risk and improve financial infrastructures.
While the quantitative analysis of this type of risk is currently in process, the IMF report provides a framework for the estimation of costs that can result from cyber attacks. It is estimated that the annual losses could reach some 100,000 million USD. Given these figures, Christine Lagarde, managing director of the IMF, warned that the financial sector is particularly vulnerable to these attacks mainly due to its interconnectivity. A successful cyber attack against an institution could thus spread rapidly, risking the stability of the financial system as a whole.
The IMF calls on governments to carry out a comprehensive data collection on the frequency and effects of this type of crime in order to facilitate risk assessment for the financial sector. In addition, it recommends to continue working on policies that seek to strengthen financial infrastructures, not only to reduce the chances of success of future attacks, but also to facilitate the rapid recovery of affected entities.