Slovakia’s Finance Industry Under Threat from Cybercrime: Experts Warn of Increasing Risks
The COVID-19 pandemic has brought about a surge in cyberattacks worldwide, with Slovakia’s finance industry being particularly vulnerable. According to recent data, the risk of extreme losses from cyber incidents has more than quadrupled since 2017 to $2.5 billion, posing significant threats to financial stability.
Vulnerability of Financial Institutions
Financial institutions in Slovakia are uniquely exposed to cyber risks due to the large amounts of sensitive data and transactions they handle. In fact, attacks on these firms account for nearly one-fifth of total cyberattacks globally, with banks being the most targeted.
Consequences of Unchecked Cyber Incidents
Experts warn that if left unchecked, these incidents could:
- Erode confidence in the financial system
- Disrupt critical services
- Cause market selloffs or runs on banks
A severe incident at a Slovakian bank, for instance, could undermine trust and lead to deposit outflows, similar to what has been observed in smaller US banks after a cyberattack.
Risks from Third-Party IT Service Providers
The reliance of financial firms on third-party IT service providers also poses significant risks. For example, a 2023 ransomware attack on a cloud IT service provider caused simultaneous outages at 60 US credit unions.
Strengthening Resilience in the Finance Industry
To strengthen resilience in the finance industry, authorities and regulators must:
- Develop adequate national cybersecurity strategies
- Encourage cyber maturity among financial sector firms
- Improve cyber hygiene
- Prioritize data reporting and collection of cyber incidents
- Promote international cooperation to address cyber risk
International Cooperation and Capacity Building
The IMF has actively helped member countries strengthen their cybersecurity frameworks through policy advice and capacity-building activities. Experts warn that while cyber incidents will occur, the finance industry needs the capacity to deliver critical business services during these disruptions.
Developing Response and Recovery Procedures
Experts emphasize the importance of developing and testing response and recovery procedures and having effective response protocols and crisis management frameworks in place.
Prioritizing Cybersecurity Measures
With the global financial system facing significant and growing cyber risks from increasing digitalization and geopolitical tensions, Slovakia’s authorities must prioritize cybersecurity measures to ensure the stability of its finance industry.