LONDON – An increase in cyberattacks and ransomware attacks since the inception of the pandemic shutdowns is alarming for a world of finance that is moving headlong toward digital money and longer-term remote work.
The flip side of the digital revolution has always been the inevitable rise of its online crime alter ego, mimicking the vaunted global reach and potential anonymity of the web and breaking free from lax corporate and consumer security.
Some attackers are clearly suspected of being state sponsored, politically motivated. But others are simply hyper-sophisticated organized gangs like DarkSide.
The rise of remote work during the pandemic has led to an increase in these types of cyberattacks and disruptions in companies, banks and government agencies. This past month’s victims include Colonial Pipeline, Brazilian meatpacker JBS and Ireland’s national health service.
Ransomware criminals raised nearly $ 350 million last year, three times more than in 2019, according to members of a public-private group called the Ransomware Task Force.
That seems like a modest total globally, but the disruption caused by lost business or utilities and massive spending on cybersecurity defenses will be many multiples of that. US government estimates put the 2017 WannaCry-like attack bill, attributed to North Korea and targeting hospitals and banks around the world, at billions of dollars.
Citing different sources in the tech industry, credit rating firm Fitch acknowledges that ransomware attacks in particular increased nearly 500% in 2020, with a quarter of all cyber incidents at legal and financial firms and with global costs estimated at $ 20 billion. Even before the pandemic hit, the World Economic Forum (WEF) estimated the scale of disruption to cybercrime of all kinds to be in the trillions of dollars.
This year’s WEF annual risk report included “cybersecurity failures” in the top 10 global risks “by probability,” with “extreme weather” and “climate action failures” the top two. And nearly 40% of its members saw cyber risks as a “clear and present danger” to the global economy over the next two years.
Meanwhile, the Washington Center for Strategic and International Studies documented more than 100 cross-border cyberattacks against governments and corporations around the world in the past year alone.
DIFFERENT TYPES OF VIRUSES
But individual business risk and data loss are different from fears that lifelong savings or investments will be stolen.
Rating firm S&P Global said banks are key targets as direct sources of financing, due to their key role in infrastructure and also their possession of a wide range of sensitive personal data.
“Accelerated digitization and remote work arrangements have increased the financial sector’s exposure to cyber risks and could lead to more complex cyberattacks leading to higher losses,” he said, citing poor governance such as high vulnerability and US banks from medium size with annual revenue between $ 10-50 billion as the most target.
The scale of this problem is clearly multiplying as fast as the digital world itself, and similarly catalyzed by the pandemic.
But the added threat to finance is a big deal as central banks and governments move toward digital money, trying in part to reclaim the world of digital money from cryptocurrencies that have already proven prone to hacking and organized crime. .
The controversial launch of central bank digital currencies (CBDCs) as legal tender in the coming years considerably raises the stakes when it comes to getting new money. China is already testing the digital yuan and the European Central Bank said on Thursday it would decide next month on the go-ahead for the cyber euro.
“The increased number of central bank touchpoints in the economy and the danger of hackers usurping central banks’ role in money creation means that the rollout of CBDC will increase cybersecurity risks,” the analysts wrote. from Fitch Monsur Hussain and Duncan Innes-Ker last month.
The flip side of this huge potential risk to the tens of trillions of dollars in CBDCs replacing physical cash around the world is simply increasing centralized spending on cybersecurity and innovation to keep you safe.
And it is this trend that some asset managers have already identified.
“Cybersecurity will be key to enabling the themes of ‘The Next Big Thing,'” wrote Mark Haefele, chief investment officer at UBS Global Wealth Management, last week.
UBS said the size of the global cybersecurity market was about $ 148 billion last year, growing at an annual rate of around 8% in recent years and is expected to accelerate to at least 10%. And it fits perfectly into portfolios at the moment as a ‘defensive’ position within the expensive tech sector, he added.
If digitization of the global economy is inevitable, keeping it safe will be paramount. This virus risk may not coincide with the COVID-19 outage at the moment, but investing in equivalent cyber vaccines can be lucrative nonetheless. (by Mike Dolan, Twitter: @reutersMikeD Edited by Mark Potter)