Financial institutions globally have suffered a staggering loss of $12 billion due to cyber attacks over the past two decades, according to a report released by the International Monetary Fund (IMF).
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The IMF’s ‘Global Financial Stability Report, April 2024’ highlights the alarming vulnerability of the financial sector to cyber risks. It reveals that approximately one-fifth of all recorded cyber incidents in the last 20 years targeted financial institutions, with banks being the primary victims followed by insurers and asset managers.
Since 2020 alone, financial firms have reported losses totaling $2.5 billion. Institutions in advanced economies, particularly in the United States, have borne the brunt of these attacks. For instance, JP Morgan Chase, the largest US bank, faces a staggering 45 billion cyber events daily, prompting an annual expenditure of $15 billion on cybersecurity measures.
While cyber incidents have yet to cause systemic disruptions, the IMF warns of their potential to threaten operational resilience and macroeconomic stability. Loss of confidence, lack of substitutes for disrupted services, and interconnectedness pose significant risks, especially amidst rapid digital transformation and geopolitical tensions.
Despite the generally modest reported losses per incident, some occurrences have resulted in losses amounting to hundreds of millions of dollars, indicating the severity of the cyber threat to financial institutions worldwide.
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