Prepare for the Possibility of Another Global Financial Crisis Due to Cyberattack
A lot of industries are still reeling from the global financial crash that took place in 2010. Several years of failed regulations and corruption of the business elites led to the said crash. Changes were placed after the said crisis to ensure that they won’t happen again.
Perhaps, those changes were effective enough to prevent corrupt individuals to make use of gullible people, but we are not yet safe. According to Mr. Ravi Menon, the managing director of the Monetary Authority of Singapore, the next global financial crisis might be brought about by cyberattack.
He further described cyberattacks as a growing threat to the financial ecosystem especially since more financial services and transactions take place online. As such, he has advised those who have attended the annual conference in Sydney that financial regulators from around the world must keep up with emerging technologies to prevent cyberattacks. These technological advancements must also be shared to reduce the risks.
For instance, technologies like algorithms in the finance industry may be used to monitor suspicious online transactions. However, he also warned that there may be digital disruptors who could prevent the success of technologies used.
Possible scenarios
There are a lot of possibilities when it comes to cyberattacks. These criminals might go on destroying bank records. They may also change the amounts people have in their accounts. They might even wipe out an entire account and deny people of the service they need. Imagine banks experiencing series of attacks at once. This could potentially bring everything to a halt. The targeted banks will eventually be rendered useless. The worst part is that these hackers might even change someone’s bank account content, or even that of the entire bank. Considering how determined these people are, anything can happen, and a financial crisis may be inevitable.
The down side
The only problem with the growing technology for capturing and analyzing data is that it also increases the risk of misused data. This means that they may be subject to cyberattacks. There must also be a law requiring companies to report cyberattacks as several cyberattacks gave remained unreported over the years. This complicates the process of tracing the perpetrators.
The Trump factor
After the 2010 financial crash, the Dodd-Frank Act was implemented. This increased red tape in businesses. It was said to be effective in preventing abuses and corruption that lead to the crash to begin with.
However, it seems like Trump is making good of his promise to reduce regulations in businesses. He has pledged to cut red tape and eventually water down Dodd-Frank. This worries financial regulators as it could have a negative effect. They were extremely worried that the deregulation may also prevent regulators from fighting cyberattacks.
They are still hoping though that there won’t be much of a rollback on Dodd-Frank. Those post-crash laws were implemented to prevent financial crisis from happening again. They were tougher for businesses, but they were effective in curbing potential abuses. Since Trump seems to promote business-friendly policies, the threat remains.
Photo Attribution:
Featured and 1st image from http://www.aljazeera.com/mritems/imagecache/mbdxxlarge/mritems/Images/2016/10/20/01d570bad5154feb805db672db65a107_18.jpg
2nd image from http://www.peleodiase.com/united-state-2016-presidential-election-the-trump-factor/
