How a Cyber Attack Could Cause the Next Financial Crisis

Ever since the forced bankruptcy of the investment bank Lehman Brothers triggered the financial crisis 10 years ago, regulators, risk managers, and central bankers around the globe have focused on shoring up banks’ ability to withstand financial shocks. But the next crisis might not come from a financial shock at all. The more likely culprit: a cyber attack that causes disruptions to financial services capabilities, especially payments systems, around the world. Criminals have always sought ways to infiltrate financial technology systems. Now, the financial system faces the added risk of becoming collateral damage in a wider attack on critical national infrastructure. Such an attack could shake confidence in the global financial services system, causing banks, businesses and consumers to be stymied, confused or panicked, which in turn could have a major negative impact on economic activity. Many steps are being undertaken to protect against such a scenario. But more needs to be done. An attack that undermines confidence in those very machines also could have debilitating consequences on the flow of money between consumers, businesses, and financial institutions around the world.