Financial sector vulnerable to cyber attacks, could cost $100B a year: IMF report
The International Monetary Fund--or IMF--says average annual potential losses from cyber-attacks could be close to 9% of banks’ net income globally, or around $100B. In a severe scenario that figure could go as high as $350B. Here are the report's takeaways:
Financial institutions are attractive targets because of their role as intermediaries in moving funds, IMF says . "A successful cyber-attack on one institution could spread rapidly through the highly interconnected financial system," it says.
Estimated losses are several orders of magnitude greater than the present size of the cyber insurance market. Insurance market for cyber risk remains small with around $3B in premiums globally in 2017.
Coverage is limited, and insurers face challenges in evaluating risk because of uncertainty about cyber exposures, lack of data, and possible contagion effects.
Strengthening the regulatory and supervisory frameworks for cyber risk is needed, and efforts should focus on effective supervisory practices, realistic vulnerability and recovery testing, and contingency planning.