Hong Kong’s Financial Sector Braces for Cybercrime Threat: A Battle of Attack Versus Preparedness

As the global economy transforms into a digitally-driven one, the finance sector in Hong Kongfaces an attractive target for cybercriminals. With the increasing reliance on technology and the rise of virtual financial services, Hong Kong’s financial institutions face a daunting challenge: maintaining a cyber-safe yet business-friendly environment.

The Growing Cybersecurity Challenge for the Finacial Services Industry

Cybersecurity has become a significant and growing issue globally, especially for the financial services industry.

Cybercrime costs have surged, reaching an estimated $1 trillion in 2019 - a 50% increase from the previous year [1].
The financial services sector, including banking and insurance, is the most targeted industry, with an average cost of $18 million and $15 million for banking and insurance sectors, respectively, in 2018 [2].

Where Does Hong Kong Stand?

Hong Kong, as an international financial centre and a significant cybercrime target, has been working to enhance its cybersecurity measures.

A comparison of cybersecurity frameworksacross jurisdictions shows that while Hong Kong is keeping pace, it is not yet a leader [3].

Strengthening Cyber Resiliency

To strengthen its cyber resilience, Hong Kong experts recommend several measures:

Policy Level: Developing a dedicated cyberspace safety roadmap with policy priorities.
Legal and Regulatory Level: Enacting cyberspace protection legislation and harmonizing regulations across the financial sector.
Operational Level: Encouraging talent development, enhancing readiness at the industry level, and operationalizing preparedness.

The Evolution of Cyber Threats

Although cyberattacks are on the rise, financial institutions in Hong Kong are better prepared than others. However, the battle between attack and preparedness is constantly evolving.

Cyberattacks are likely to become more ubiquitous and sophisticated, using artificial intelligence and subtle attacks [4].

Technology’s Impact on Cybersecurity

The increasing use of technology in financial services provides opportunities for hackers and cybercriminals to exploit.

Virtual financial services, online collaboration tools, and the coming of 5G networks pose cybersecurity risks [5].

Balancing Cybersecurity and Business Growth

Hong Kong’s financial services sector faces a complex task: ensuring cybersecurity while allowing for the continued growth of the industry.

Development of a cyber-insurance market in Hong Kong could serve as a foundation for business opportunities [7].

Conclusion

Despite the challenges posed by cyber risks, Hong Kong’s financial sector is working to strike a balance between cybersecurity and business growth.

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