Financial Inclusion and Cybersecurity in the Digital Age

IMF News, December 10, 2020

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Speech by Kristalina Georgieva, IMF Managing Director, delivered at the (Virtual) Conference on Financial Inclusion and Cybersecurity co-hosted by International Monetary Fund, Carnegie Endowment for International Peace, World Bank, and World Economic Forum on December 10, 2020.
Central thesis: COVID-19 accelerates digital adoption and opportunities for financial inclusion, but also multiplies cyber risks; efforts to expand financial inclusion and strengthen cybersecurity must proceed together.

"On average, 106 people gain access to the Internet in sub-Saharan Africa every second."
"Hackers attack computers with Internet access an average of once every 39 seconds." [1]
If these statistics hold true: "in just a minute of me speaking over 6,000 people would gain access to the Internet in sub-Saharan Africa."
Since 2011, "an additional 1.2 billion adults worldwide have gotten access to a bank account."
"Today, 69% of adults have an account."
"Close to one-third of adults—1.7 billion—are still unbanked."
"About half of unbanked people include women from poor households in rural areas or out of the workforce."
"Attacks have tripled over the last decade, and financial services continue to be the most targeted industry."
Cyber risk has implications for financial stability; IMF Staff Discussion Note published this week: "Cyber Risk and Financial Stability: It’s a Small World After All."

Cyberattacks target large and small institutions, rich and poor countries, and operate without borders.
Potential impacts on individuals and households:
- A cyber attack can take a bank down and prevent remittances from going through.
- A mobile money app hack can block access to cash transfers needed to pay for food.
The financial sector is highly interconnected, with rapid transactions among many actors where trust is critical; a major cyber attack could seriously threaten financial stability and thereby deny people the benefits of financial inclusion.

Make digital financial inclusion a top priority during pandemic recovery.
- "Digital financial innovations can open up new possibilities for people around the world."
- Expand availability of mobile money apps and other digital financial services "as broadly available as possible to everyone, everywhere."
- "Prioritizing development finance for digitalization and financial inclusion is paramount" to prevent greater inequality.
Build a safe, secure, and robust system to support digital financial inclusion.
- Recognize the financial sector as a locus for damaging disruptions from cyber attacks and design resilience accordingly.
Strengthen collaboration across stakeholders.
- Institutions should avoid working in silos; bring together relevant stakeholders to share knowledge and enhance collaboration.
- The workshop seeks to "bring together all the relevant stakeholders to share our knowledge and enhance our collaboration."

Balance ambition and caution: "a ship is safe in harbor. But that’s not what ships are made for."
- Do not keep technologies unused because of risks, but do not "sail deliberately into unsafe waters."
- Build technologies and systems to be "strong and resilient."
Final call: find a balance between advancing technologies that facilitate financial inclusion and ensuring these are "safe, secure, and effectively regulated." "Working together, we can do it."

Source: Financial Inclusion and Cybersecurity in the Digital Age — Kristalina Georgieva, December 10, 2020.