Cyberattacks are now the top security concern to the global financial system. A US top federal official believes cybercriminals are a bigger threat nowadays than the lending and liquidity risks – culprits behind the 2008 global recession.
The assessment comes from Federal Reserve Chairman Jerome Powell, regarded as one of the world’s leading authorities in the world of finance.
In an interview that aired on CBS’s “60 Minutes” on Sunday, Powell said many government agencies, including the Federal, and all large private businesses in the world are watching cyber risks very closely.
“I would say that the risk that we keep our eyes on the most now is cyber risk. So you would worry about a cyber event. That’s something that many, many government agencies, including the Fed and all large private businesses and all large private financial companies in particular, monitor very carefully, invest heavily in. And that’s really where the risk I would say is now, rather than something that looked like the global financial crisis.”
Powell shared that the worst scenario would be if hackers attacked a major payment processor and forced it to shut down thus preventing money flow from between global financial institutions. The global financial system would largely be paralyzed, he said, citing examples of large companies losing the ability to track payments they are disbursing.
With recent large-scale attacks on organizations using Accellion software (Solarburst/Solarwinds) and hacks of Microsoft Exchange Servers governments and businesses alike are increasingly concerned about those types of threats.
“We spend so much time and energy and money guarding against these things. There are cyber-attacks every day on all major institutions now. And the government is working hard on that. So are all the private sector companies. There’s a lot of effort going in to deal with those threats. That’s a big part of the threat picture in today’s world.”