Rising Cyber Threats Pose Serious Concerns for Macro-Financial Stability, warns International Monetary Fund (IMF)

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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

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.