Central bankers, regulators and risk managers have for the past decade tried to shore up banks’ ability to withstand financial shocks as happened to the Lehman Brothers back in 2008. But now, the new culprit may not be a financial shock, but a cyber-attack. Such an attack may disrupt financial services such as worldwide payment systems. Cybercrime is already worth a trillion dollars globally in terms of loss to countries. Losses could be similar to those from hurricanes such as Katrina or Sandy. One of the sources for this could be from a rogue state such as North Korea. Another scenario could be where an amateur launches malware without proper understanding of the circumstances. Even central banks may not be well-prepared to handle such circumstances. The financial services ecosystem needs to agree on this threat and work as a unit, because all will suffer together. Coordinated corporate training programmes aimed at implementing systems to stop cyberattack contagion have to be initiated.

Source:https://hbr.org/2018/09/how-a-cyber-attack-could-cause-the-next-financial-crisis

Uploaded Date:10 November 2018