Due to increasing digitalization and the general situation in the world, the number of cyber attacks is globally on the rise. Data shows that it is becoming increasingly difficult to contain these attacks, and the risks and costs caused by attacks are creating additional problems for companies. Recently, the financial sector has been a particular target for cyber attackers, so it is not surprising that attacks aimed at financial organizations have significantly increased in recent months. The number of attacks globally increased by 11 percent in the first half of 2022, while in banks and financial institutions, the figure doubled.
Among other things, cybersecurity has also become the biggest concern for the Norwegian pension fund, the world’s largest asset fund, which faces an average of three serious cyber attacks every day. According to the Financial Times, the number of significant hacking attempts on the fund, valued at around $1.3 trillion, doubled in the last two to three years.
The fund, managed by Norges Bank Investment Management, reported a historic loss in dollars last week after markets were shaken by fears of inflation and recession, suffering around one hundred thousand cyber attacks annually, of which more than a thousand are classified as serious.
– Cyber attacks worry me more than market problems. The number of attempts is increasing, and the attacks are becoming more sophisticated – said Nicolai Tangen, the fund’s CEO, to the Financial Times. He added that these attacks are becoming a systemic financial risk, especially as markets become increasingly digitalized.
Attacks on the Rise Since the Pandemic
The main motive for cyber attacks is primarily the desire to acquire information, most often financial data. This type of crime has been on the rise since the beginning of the pandemic when almost every industry was forced into rapid digitalization, according to Embroker.
According to data provided by Forbes, in 2021, the average number of cyber attacks and data breaches increased by 15.1 percent compared to the previous year, and it is expected that the number of attacks will double from this year to 2025.
The perpetrators can range from private criminal groups to state-sponsored hackers, and experts believe that the war in Ukraine and the sanctions the West is imposing on Russia could further influence the rise of cyber insecurity, according to the Financial Times. JPMorgan analysts highlighted in a recent report that they expect a wave of cyber attacks as a consequence of the war and that critical industries in the U.S. are on high alert.
Numerous leaders of investment companies are also increasingly concerned about cybersecurity, with some warning that as the danger grows, so do the costs for companies.
And Attacks Cost
The costs associated with cyber attacks – lawsuits, increased insurance rates, investigations – can quickly lead companies to bankruptcy. One attack costs a company an average of around $200,000, and as a result, many companies fail within six months of the first attack, according to TechTarget.
According to Forbes, cybercrime cost American companies more than $6.9 billion last year, and currently, only 43 percent of companies feel financially prepared if they are hit by an attack this year.
It is also estimated that the cost of cybercrime for companies worldwide will rise to $10.5 trillion by 2025.
