Insurance giant Lloyds of London has warned that the global economy could suffer losses of $3.5 trillion as a result of a major cyber attack targeting payment systems.
The hypothetical scenario modeled by the insurance market alongside the Cambridge Risk Research Center is considered unlikely to materialize. The researchers suggested that the chance of it happening is around 3.3%, which he expanded to a chance of once in 30 years.
The UK government also previously conducted an investigation into the possibility of cyber-attacks on the financial system and found that a catastrophic incident was unlikely. In the National Risk Register, the worst-case scenario for an attack on financial market infrastructure is modeled as an attack on a single network and is only considered to have a “slight chance” of occurring within a limited forecast period. It was being done.
In a government scenario, this attack could have a significant impact on the financial system, including the processing of financial transactions, leading to a loss of availability and integrity of financial data and public confidence in the financial system as a whole.
In contrast, in the Lloyd case, multiple separate, hypothetical and unprecedented cyber attacks all occurred simultaneously, impacting multiple independent systems that make up the financial market infrastructure monitored by different organizations. Become.
In a research scenario, Lloyds said: “An attacker injected malicious code into critical parts of software used in the financial services industry to verify transactions and verify payments during regular software updates. Embed. Updates are sent to a network of tens of thousands of partners and customers and percolated simultaneously.”
This would allow attackers to “create a backdoor that would allow hackers to launch a large-scale breach, meaning customers would be unable to pay for goods and services.” Banks would not be able to settle payments. . And interbank lending has come to a halt. ”
Despite just confirming that banks are unable to clear payments, Lloyds warns: “Hackers are able to divert funds to networks of accounts under their control by scrambling the data they currently hold. It will take more time to remediate and discover further breaches.”
The insurance giant then explained that its response teams were too busy chasing attackers to focus on other tasks, and that its business was being affected by declining trust in financial institutions and new regulations. Masu.
The study considered a “hypothetical (but plausible)” scenario in which such a global attack could lead to an average loss of $3.5 trillion in gross domestic product (GDP) over five years. The United States suffered the most damage, followed by China and Japan.
As the company acknowledged, the type of impact described in its study “represents a highly sophisticated and novel attack never seen before.”
Bruce Carnegie Brown, Lloyd's Chairman, said: “We are committed to building resilience to systemic risks, and the risk scenarios announced today will support our customers against the potential cyber threats to businesses and society. “This highlights the important role of insurance in protecting people's lives.”
“Cyber’s global interconnectedness means the risks are too great for any one sector to face alone. Therefore, to ensure we build society’s resilience to the potential scale, We must continue to share knowledge, expertise and innovative ideas across government, industry and the insurance market on this risk. ”
The cyber insurance market was transformed in 2017 in the wake of the NotPetya attack, which initially targeted Ukraine. At this time, many in the market began to worry about whether war exclusions in insurance policies were fit for purpose.
Mondelēz International and Zurich American Insurance last year reached a settlement after a years-long legal battle over the food company's $100 million claim for damages from the attack. Similar claims continue.
In response, Lloyds led a controversial effort to revamp these exclusions with the aim of creating a solution that balances the needs of customers and the insurance market. The company warned in March that these new exemptions could hurt profits.
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