Will the next financial crisis be a cybersecurity crisis?
Recent economic slowdown coupled with widespread geopolitical risk has stoked fears that a recession is looming, which will inevitably invite comparisons with the financial crisis of 2007-08.
To a large extent, the scar that the Great Recession left has kept the financial world on red alert for any kind of recurrence. Just as the present growth has been slow and shallow, its eventual contraction may well be a gradual one, as robust defences are in place to prevent the cataclysmic shock that occurred a decade ago.
Perhaps though a crisis of the scale and damage caused by the subprime mortgage crisis in 2007-08 could be replicated from an unexpected source that the world is not expecting.
Cyber attacks and data breaches have been prominent in the news over the last couple of years, thanks to high-profile breaches at the likes of Facebook, Marriott and British Airways. Given the integral role technology plays in the way we do business and go about our lives, could a cyber attack set the butterfly’s wings flapping on the next financial crisis?
The 2007-08 crisis emanated from severe loss of liquidity in financial markets. With the global financial system reliant on payment companies and other intermediaries facilitating frictionless movement of money from one place to another, one can imagine the damage that could be caused by a major disruption to this.
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