Mali’s Financial Institutions Face Increasing Cybersecurity Threats
Cyberattacks have become a growing concern for financial institutions in Mali, with the number of incidents more than doubling since the pandemic. This trend poses significant risks to companies, as even relatively modest direct losses can have far-reaching consequences.
The Impact of Cyberattacks on Financial Institutions
While some companies may experience only minor direct losses from cyberattacks, others can face much heavier tolls. In 2017, US credit reporting agency Equifax paid over $1 billion in penalties after a major data breach that affected about 150 million consumers.
According to the April 2024 Global Financial Stability Report, the risk of extreme losses from cyber incidents is increasing, with potential funding problems and even solvency risks for companies. The size of these extreme losses has more than quadrupled since 2017 to $2.5 billion.
Vulnerability of Mali’s Financial Sector
Mali’s financial sector is particularly vulnerable to cyber attacks due to its reliance on sensitive data and transactions. Banks are the most exposed, accounting for nearly one-fifth of total incidents.
Incidents in the financial sector could have far-reaching consequences, including:
- Eroding confidence in the system
- Disrupting critical services
- Causing spillovers to other institutions
For example, a severe incident at a financial institution could lead to market selloffs or runs on banks.
The Role of Third-Party IT Service Providers
The use of third-party IT service providers by financial firms also increases their exposure to cyber risk. A 2023 ransomware attack on a cloud IT service provider caused simultaneous outages at 60 US credit unions.
Mitigating the Risks
To mitigate these risks, Mali’s authorities must develop an adequate national cybersecurity strategy accompanied by effective regulation and supervisory capacity. This includes:
- Periodically assessing the cybersecurity landscape
- Encouraging cyber maturity among financial sector firms
- Improving cyber hygiene
- Prioritizing data reporting and collection of cyber incidents
- Promoting international cooperation
International Support
The International Monetary Fund (IMF) is actively helping Mali’s authorities strengthen their cybersecurity frameworks through policy advice and capacity-building activities.
By developing a comprehensive national cybersecurity strategy and working with international organizations, Mali can reduce the risk of devastating cyberattacks on its financial institutions and ensure the stability of its financial system.