IMF Raises Red Flag for Cyber Risk as New Threat to Financial Stability

IMF Raises Red Flag for Cyber Risk as New Threat to Financial Stability

Washington DC , December 8: Amid the global pandemic when cashless transactions and Touchless way of doing business is on the rise, the International Monetary Fund has warned about the Cyber Risk of data flow in Digital financial services.

The number of cyber attacks worldwide has tripled over the last decade and financial services continue to be the most targeted industry, according to IMF.

“Cyber security has clearly become a threat to financial stability,” wrote Jennifer Elliott and Nigel Jenkinson of IMF’s Monetary and Capital Markets Department in a blogpost released on Monday (local time).

“Given strong financial and technological inter-connections, a successful attack on a major financial institution — or on a core system or service used by many — could quickly spread through the entire financial system, causing widespread disruption and loss of confidence.”

Explaining the threat cyber risk poses, it said transactions could fail as liquidity is trapped, households and companies could lose access to deposits and payments, according to Elliott and Jenkinson.

Under extreme scenarios, investors and depositors may demand their funds or try to cancel their accounts or other services and products they regularly use.

The Blogspot further detailed and added that hacking tools are now cheaper, simpler and more powerful, allowing lower-skilled hackers to do more damage at a fraction of the previous cost.

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