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Posted 12 Apr 2024

2 min read

  • According to IMF’s Global Financial Stability Report 2024
    • The risk of extreme losses from cyber incidents has increased to $2.5 billion
    • The number of cyberattacks has almost doubled since the COVID-19 pandemic.
    • Attacks on financial firms account for nearly one-fifth of the total, of which banks are most exposed. 

 

  • Reasons Behind Rising Cyber Incidents in the Financial Sector
    • Increased digital financial services offer a target-rich environment for hackers. 
    • Insider threats i.e. users have authorized access to assets and misuse their privileges deliberately or accidentally for monetary gain.
    • Cybersecurity skills gap leaving financial firms vulnerable to cyber threats.
    • Geopolitical tensions. E.g. Surge in cyber-attack after Russia’ invasion of Ukraine.

 

  • Impact of Cyber Attacks on Macro-financial Stability
    • Data breaches lead to a loss of confidence in the viability of targeted institutions, resulting in high deposit outflows.
    • Cyber-attacks on payment networks can halt trading, online banking,the  etc., and undermine the country's financial stability.
    • Cyber-attacks propagate rapidly within a network of financial systems through financial linkages, thus impacting market stability.

 

  • Policy Recommendations
    • Strengthen reporting of cyber incidents by financial firms to supervisory agencies.
    • Financial firms should develop and test response and recovery procedures to remain operational in the face of cyber incidents

World Cybercrime Index

  • The index has been developed as a joint partnership between University of Oxford and UNSW Canberra.
  • India ranked number 10 in cybercrime, with frauds involving people making advance fee payments being the most common type.
  • Russia topped the list followed by Ukraine and China.
  • Tags :
  • World Cybercrime Index
  • Global Financial Stability Report 2024
  • Cyberattack on financial sector
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