Cybercrime in Finance Industry Hits Hard in Uzbekistan, Experts Warn
The financial sector in Uzbekistan is facing a growing threat from cybercrime, with attacks increasing by more than double since the pandemic. While individual companies may suffer relatively modest direct losses, the potential consequences of such incidents are far-reaching and could even threaten the solvency of affected institutions.
Growing Threat
According to a recent report, the risk of extreme losses from cyber incidents has increased significantly, with losses quadrupling to $2.5 billion since 2017. The financial sector is particularly vulnerable due to the large amounts of sensitive data and transactions it handles, making it a prime target for criminals seeking to steal money or disrupt economic activity.
Vulnerability in Uzbekistan
In Uzbekistan, where financial institutions are increasingly reliant on third-party IT service providers, the risk of system-wide shocks is heightened. A recent survey found that only about half of countries, including Uzbekistan, have a national cybersecurity strategy or dedicated regulations in place to address these threats.
Experts’ Warning
Experts warn that without adequate policies and governance frameworks, cyber risks could erode confidence in the financial system, disrupt critical services, and cause spillovers to other institutions. For example, a severe incident at a financial institution could lead to market selloffs or runs on banks, while attacks on payment networks could severely affect economic activity.
Strengthening Resilience
To strengthen resilience in the financial sector, authorities are advised to:
- Develop an adequate national cybersecurity strategy
- Encourage cyber maturity among financial institutions
- Improve online security and system health
- Prioritize data reporting and collection of cyber incidents
- Promote international cooperation
The International Monetary Fund (IMF) is actively helping member countries strengthen their cybersecurity frameworks through policy advice and capacity-building activities. As attacks often emanate from outside a country’s borders and proceeds can be routed across borders, international cooperation is essential to address cyber risk successfully.
Preparation is Key
While cyber incidents will inevitably occur, the financial sector needs to have the capacity to deliver critical business services during these disruptions. To this end, financial institutions should:
- Develop and test response and recovery procedures
- National authorities should have effective response protocols and crisis management frameworks in place
By taking proactive measures, Uzbekistan’s financial sector can mitigate the risks of cybercrime and ensure the stability of its economy.