Cybersecurity and geopolitical risks in financial markets

The USD 81 million theft from the central bank of Bangladesh in 2016 illustrates vulnerabilities in global payment networks. Attackers exploited weak local network defences and authentication processes, prompting reforms across SWIFT participants, including stricter authentication protocols, improved endpoint security, and enhanced co‑ordination among authorities (IMF, 2024[11]).

Evidence from the 2017 NotPetya cyberattack shows that losses among indirectly affected firms were several times larger than those borne by directly targeted firms, highlighting how cyber shocks can propagate through supply chains and production networks (Crosignani, Macchiavelli and Silva, 2023[10]).

Disruptions to shared service providers or payment systems can propagate through financial linkages, triggering liquidity stress and amplifying systemic risk (Eisenbach, Kovner and Lee, 2022[4]; Kotidis and Schreft, 2025[6]).

In several recorded instances, financial institutions have temporarily suspended operations following ransomware attacks. Beyond direct financial losses, operational downtime can erode customer trust, prompt regulatory scrutiny, and result in substantial business interruption costs. Some institutions now conduct “ransomware drills” to strengthen resilience (Crosignani, Macchiavelli and Silva, 2023[10]).

AI-powered social engineering is posing new challenges for cybersecurity. Advanced chatbots and AI-generated synthetic media (“deepfakes”) can impersonate executives or clients, enabling fraudulent transactions or credential theft. Institutions are responding by reinforcing verification protocols and deploying AI-based detection tools (IMF, 2023[71]; G7, 2022[72]). It should be noted, however, that AI has the potential to both mitigate and amplify cyber risks, while it may itself be a direct target or vector for cyber threats (G7 Cyber Expert Group, 2025[64]).

The development of quantum computing introduces potential long-term risks to encryption systems (G7 Expert Group, 2024[73]). “Harvest now, decrypt later” strategies may allow attackers to exploit encrypted data once quantum capabilities mature, prompting efforts to transition to quantum-resistant cryptographic standards (World Bank, 2024[74]). In addition, the uncertainty around the speed of progress in quantum computing may incentivise firms to take stock of their existing cryptography standards to assess their exposure and prepare for the post-quantum transition (OECD, 2024[7]). The G7 Cyber Expert Group has provided a high-level roadmap to inform senior leaders on the types of activities that may help the transition to post-quantum cryptography in a co‑ordinated, timely, and objective‑driven way in advance of future risks (G7 Cyber Expert Group, 2026[65]).

Cyber incidents frequently span jurisdictions, as attackers exploit cross-border networks and legal asymmetries. This underscores the importance of international co‑operation, including information sharing and co‑ordinated response frameworks (G7, 2022[72]; FSB, 2021[75]). Financial authorities increasingly view robust cyber resilience as a core component of financial stability, as highlighted by the FSB’s frameworks and the G7 Fundamental Elements of Cybersecurity (OECD, 2019[27]; FSB, 2021[75]; G7, 2016[76]).1

Crypto‑asset markets are exposed to vulnerabilities from exchange breaches and illicit activity. These incidents not only generate investor losses but may also undermine trust in digital finance. In some cases, state‑linked actors have leveraged crypto‑assets for cyber operations and sanctions evasion, highlighting the intersection of financial and security risk (FSB, 2022[77]).

Recent discussions around frontier AI models suggest that advanced systems may be capable of identifying and exploiting vulnerabilities at scale, raising concerns for financial-sector resilience. These developments reinforce the need for enhanced international co‑ordination and risk monitoring (Reuters, 2026[78]; JMOF, 2026[79]).