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IMF warns of dangers of rapid digital transformation: it threatens global financial stability

IMF warns of dangers of rapid digital transformation: it threatens global financial stability

A recent report released by the International Monetary Fund and cyberattacks warned of the risks associated with rapid digital transformation, technological innovation such as artificial intelligence and escalating global geopolitical tensions, which are exacerbating cyber attacks against global financial institutions.

The Fund also warned of the threat to global financial stability due to the increasing frequency and sophistication of cyberattacks, highlighting the growing risk of huge losses from attacks, making the financial sector particularly vulnerable. to cyber threats, as operations involve enormous amounts of data. and sensitive transactions. Moreover, experts warn that this concerns the financial sector as a whole.

Reputational damage and bankruptcy

The report states that a cyberattack on financial institutions could cause funding problems, damage reputation and even lead to bankruptcy. It could also undermine confidence in the financial system, disrupt basic services and spread to other sectors.

He said that over the past two decades, nearly a fifth of reported cybersecurity incidents affected the global financial sector, causing direct losses of $12 billion to financial firms, and that since 2020, direct losses reached $2.5 billion.

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For his part, Akshay Joshi, head of the Industry and Partnerships Division at the World Economic Forum Development Center, said that while financial institutions are widely recognized as leaders from a cybersecurity maturity perspective, they are also vulnerable to the exponential increase in cybersecurity. the frequency and intelligence of cyberattacks. It’s like any other sector.

ويضيف تقرير صندوق النقد الدولي أن البنوك مستهدفة بشكل خاص وأن أرvest غير المباشرة والضoses الذي يلحق بالسمعة ، ك ،ا أن الحوادث الإلكترونية هي مخاطر تشغيلية ر … مؤسات المالية وتؤثر سلبًا على الاستقرار المالي الكلي In general.

Strengthening electronic security capabilities

The IMF report urges financial firms to strengthen their cybersecurity capabilities through increased efforts such as stress testing and information sharing agreements, among other recommendations. Furthermore, the IMF calls on the authorities to develop appropriate and adequate national cybersecurity strategies accompanied by regulatory frameworks.

With the global financial system exposed to significant and growing cyber risks, policy and governance frameworks must keep pace to mitigate risks.

The IMF also called for greater international cooperation on cybersecurity, noting that cyberattacks often originate from outside the country where the financial firm is based.

According to experts, securing digital ecosystems is vital due to the growing cybersecurity deficit of financial institutions.

According to the World Economic Forum’s Global Cybersecurity Outlook 2024 report, there are growing disparities between organizations that are cyber resilient and those that are not.

Improved Cybersecurity for Large Organizations

While larger organizations have shown improvements in cybersecurity, the cyber resilience of small and medium-sized businesses has declined.

In fact, the number of SMEs maintaining a minimum level of cyber resilience has fallen by 30%, despite making up the majority of businesses in many countries.

The Forum’s report also concludes that the gap between organizations with cybersecurity and those without is exacerbated by emerging technologies, with many SMEs being left behind as advanced technologies develop.

Bridging the cybersecurity skills gap

Persistent skills shortages pose a barrier to efforts to achieve cybersecurity goals, according to the Strategic Cybersecurity Talent Framework, a white paper from the World Economic Forum.

The framework revealed a global shortage of around 4 million cybersecurity professionals, with more than half of public institutions citing lack of resources and skills as their biggest challenge to improving cybersecurity resilience, but efforts are deployed to alleviate the cybersecurity skills shortage. For example, the Forum’s Bridging the Cybersecurity Skills Gap initiative raises awareness among leaders and establishes actions that help create sustainable pipelines of cybersecurity talent within organizations and across sectors.

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