The Bank of England is to make securing cashless payment technology and preventing cybercrime a top priority.
The decision by the 326-year-old institution to focus on cybersecurity and digital payments was revealed yesterday by an external member of the Bank of England's financial policy committee. The committee was created in 2010 with the remit of monitoring the economy of the United Kingdom.
According to Law360.com, committee member Elisabeth Stheeman said that the impact of the COVID-19 pandemic on the financial system was key in driving the decision to focus on cyber-issues. According to Stheeman, what had been a gentle stroll toward digital dominance in everyday payments had increased to a leggy gallop.
“The reality is that online fraud and cyber-hacking of digital accounts have outstripped traditional theft of banknotes and gold,” Stheeman said. “Payments have undergone rapid innovation in recent years, and the COVID-19 shock has accelerated these trends.”
Stheeman said the committee believes these two areas will be critical in creating the kind of operational resilience that will enable the system to contain and withstand future unforeseen financial crises.
To achieve such resilience, Stheeman said the committee will call for more frequent stress-testing to gauge how well banks can recover from cyber-attacks. The committee also plans to create new standards for how quickly and effectively financial institutions should be expected to contain cyber-attacks.
Stheeman anticipates that the responsibility for ensuring the security of digital payments will lie with technology companies in the future, rather than with banks.
Cyber-criminals have sought to exploit the changes wrought by the global health pandemic, creating scams promising cures or vaccinations and targeting the newly opened up attack surface created by the increase in remote working.
Across the pond, Americans have lost more than $77m in fraud related to COVID-19 since the outbreak began, according to the US Federal Trade Commission. John Breyault, vice-president of public policy, telecommunications, and fraud at the National Consumers League, thinks the real figure is much higher.
“I think the FTC’s numbers are almost certainly just the tip of the iceberg when it comes to fraud losses,” Breyault said. “We know fraud is historically an under-reported crime.”