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Financial Firms Lost $2.5Bn To Cyberattacks in 4 Years – IMF

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Financial firms have reported significant direct losses, totaling almost $12 billion since 2004 and $2.5 billion since 2020, the International Monetary Fund (IMF) has disclosed.

Financial Firms Lost $2.5Bn To Cyberattacks in 4 Years – IMF

In its April 2024 Global Financial Stability Report released recently, IMF stated that attacks on financial firms account for nearly one-fifth of the total, of which banks are the most exposed.

The IMF offered JPMorgan Chase as an example, stating that the biggest US bank recently reported 45 billion cyber events each day, with $15 billion spent annually on technology and 62,000 employees, many of whom were devoted to cybersecurity.

It went on to say that cyber events constitute a major operational risk that might jeopardise the operational stability of financial institutions and negatively impact macrofinancial stability as a whole.

“Financial institutions in advanced economies, particularly in the United States, have been more exposed to cyber incidents than firms in emerging markets and developing economies. Given the large amounts of sensitive data and transactions they handle, are often targeted by criminals seeking to steal money or disrupt economic activity.

“Attacks on financial firms account for nearly one-fifth of the total, of which banks are the most exposed. Incidents in the financial sector could threaten financial and economic stability if they erode confidence in the financial system, disrupt critical services, or cause spillovers to other institutions.

“Cyber incidents that disrupt critical services like payment networks could also severely affect economic activity. For example, a December attack at the Central Bank of Lesotho disrupted the

The IMF observed that a variety of reasons are involved in the increase in cyber incidents, which include the COVID-19 pandemic, which accelerated the fast expanding digital connectivity as well as the growing reliance on technology and financial innovation. Also, given the spike in cyberattacks following Russia’s invasion of Ukraine in February 2022, geopolitical tensions might also be a cause.

“A cyber incident at a financial institution or a country’s critical infrastructure could generate macro-financial stability risks through three key channels: loss of confidence, lack of substitutes for the services rendered, and interconnectedness. While cyber incidents thus far have not been systemic, ongoing rapid digital transformation and technological innovation such as artificial intelligence and heightened global geopolitical tensions exacerbate the risk.

“Recent significant cyber incidents—such as the ransomware attack on the US arm of China’s largest bank, the Industrial and Commercial Bank of China, on November 8, 2023, which temporarily disrupted trades in the US Treasury market—further underscore that cyber incidents at major financial institutions could threaten financial stability,” it said.

To strengthen resilience in the financial sector, the IMF, suggested that central banks and authorities must create a sufficient national cybersecurity strategy and implement efficient regulation and supervisory measures, which should include: regular evaluation of the state of cybersecurity and detection of possible systemic vulnerabilities resulting from concentrations and interconnections, including those arising from third-party service providers; improved cyber-related governance to lower cyber risk and supports the idea of promoting cyber “maturity” among financial sector companies, including board-level access to cybersecurity knowledge, among others.

 


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E-Financial

CBN Says OPay, Moniepoint, Others can Start Onboarding New Customers Soon

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Central Bank of Nigeria (CBN) has said that mobile money operators including fintech firms like OPay, Palmpay, Kuda Bank, and Moniepoint will resume the enrolment of new customers “in another couple of months”.

CBN Says OPay, Moniepoint, Others can Start Onboarding New Customers Soon

Olayemi Cardoso, governor, stated this on Tuesday at the 295th Monetary Policy Committee (MPC) of the apex bank in Abuja when the MPC jacked up interest rate from 24.75 per cent to 26. 25 per cent.

Cardoso, said the apex bank has engaged many of the players on the need to strengthen their operations.

He said to block money laundering and illicit flows, the apex bank brought up “remedial measures that will help that sector to tighten up on onboarding and even existing clientele base”.

“I am confident that as time goes on, and hopefully in another couple of months, all these will be something of the past and then you will see that sector going back into what they’ve been known to do before, but certainly with a very stronger regulatory framework,” he said.

In April, the apex bank stopped fintech companies from onboarding new customers, a move that has been seen as a clampdown on the financial sub-sector by the Cardoso-led CBN.

When asked why the apex bank took the decision, the CBN chief said reports that the CBN has decided to clamp down on fintech firms are “furthest from the truth”.

He said “the fintechs have not been singled out for any exceptional kind of treatment”, adding that the CBN remained proud of the exploits of fintech firms in the last number of year and the apex bank would continue to support and strengthen them.

“However, regulation is very critical in a sector that seems to have grown so incredibly rapidly,” Cardoso said, citing illicit flows within the sub-sector.

“More recently, we had course to take a deep dive look at the whole issue of illicit flows and money laundering particularly within the non-heavy regulated banking system and we all know some of the issues that came out with cryptos and some of the messages we put out after that, which of course, gave us some course to know that there is the need for heightened surveillance.”

He said the apex bank has had major handshake with security agencies to identify the places to tighten regulations and surveillance in the sub-sector.

Cardoso said, “For that reason, we were concerned with respect to how we saw the issue of anti-money laundering and illicit flows as they made their way within the various sub-sectors of the financial industry and we felt there was a need for us to take a breather and work with different players to strengthen regulations, not by any means to throw them out of business.

“Let me re-emphasise that as at this point in time, we have not revoked the licenses of any of the fintech organisations.”


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Flutterwave Refutes N11Bn Loss Due to Security Breach

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Flutterwave, African fintech company, has debunked allegations in the media that it lost N11 billion ($7.25 million) due to a security compromise.

Flutterwave Refutes N11Bn Loss Due to Security Breach

Flutterwave, led by Olugbenga Agboola, Nigerian tech millionaire has rejected accusations is the only Africa-focused Company to make CNBC’s 2024 Disruptor 50 List

In response to the avalanche of claims, Flutterwave said that it discovered suspicious activity on one of its customer platforms in April 2024. The corporation maintains that it aggressively prevented any loss of customer monies.

As a security precaution, Flutterwave will contact select customers to move their accounts and recommends that all customers implement multifactor authentication, 3D security, and IP whitelisting.

This recent incident raises security worries for the corporation, which accepts payments in over 30 currencies from 40 countries.

In March 2023, reports arose saying hackers stole N2.9 billion ($6.3 million) from Flutterwave. The corporation quickly rejected the charges, reaffirming its commitment to client fund protection.

Flutterwave was ordered by a Nigerian court to recover N19 billion ($12.5 million) for unlawful POS transactions that affected 6,000 accounts across 35 banks and financial institutions.

This came after a months-long inquiry into a technical malfunction that enabled the fraudulent transfers.

Agboola founded Flutterwave in 2016, and it has since been a forerunner in Africa’s ongoing payments revolution. The company, with headquarters in San Francisco and

Lagos, is a notable success story in the continent’s developing fintech sector.

Flutterwave entered the Rwandan and Egyptian markets in 2023, which was a golden year for expansion. It formed a strategic relationship with IndusInd Bank Ltd., a top Indian financial services provider.

The corporation announced a $50 million investment in the Kenyan market to secure an operating license.

These results highlight Flutterwave’s twin goals of transforming Africa’s payments ecosystem and developing a foothold in international markets.

In 2023, Flutterwave formed a strategic relationship with Microsoft, founded by Bill Gates and Paul Allen, American billionaires.

This effort intends to empower at least 10 million small and medium-sized firms (SMEs) across Africa, with a concentration on Nigeria.

The partnership harnesses the power of the fintech sector to boost economic growth and improve people’s lives by promoting financial inclusion.

This collaboration expands on the two companies’ current technological arrangement, which was signed earlier in 2023.


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CBN raises interest rate to 26.25%

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Monetary policy committee of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which benchmarks interest rates, from 24.75 percent to 26.25 percent.

This comes after Nigeria’s inflation rate rose to 33.69 percent amid the surge in food prices.

Olayemi Cardoso, CBN’s governor, announced the monetary policy rate adjustment at a news conference on Tuesday, May 21, during the committee’s 295th meeting in Abuja.

The monetary policy rate (MPR) is the baseline interest rate in an economy, which banks use to set their interest rates.

This is the third consecutive time the apex bank will be raising the benchmark rate this year. At the March MPC meeting, the benchmark rate had been increased by 200 basis points from 22.75 per cent to 24.75 per cent.


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