IMF warns of cyber threat to digitally connected financial markets

The International Monetary Fund’s (IMF) October 2026 Global financial stability report has highlighted the risk financial institutes face as they become digital and interconnected. In the report, the IMF warned that this interconnectivity leads to a greater risk of cyber disruptions which has emerged as a growing source of systemic risk.

The IMF noted that cyber threats constitute a growing systemic risk as financial services become more digital and interconnected, stating that frontier AI models are emerging as both powerful enablers of cyber attacks and critical defensive tools.

“A major attack affecting payments, trading or access to deposits could cause immediate losses and undermine confidence,” the report’s authors warned.

In the report, the IMF noted that rapid digitisation has expanded the attack surface. First is the exposure to disruption due to the fact that financial institutions increasingly depend on interconnected technologies, cloud services, third-party providers, and real-time payment and settlement systems.

The second risk identified in the IMF report is that there is growing reliance on a small number of critical technology providers, together with increasingly complex and often opaque third-party dependency chains. The report’s authors warned that this supply chain increases concentration risk and creates potential common points of failure across financial institutions.

The third is the growing sophistication of cyber threats. “State- actors, ransomware groups and insiders now have access to increasingly powerful tools, including frontier AI models that have demonstrated strong capabilities in network-attack simulations,” the IMF warned. These developments are making cyber defence more challenging.

It noted that the number of reported vulnerabilities has risen sharply as the time between the disclosure and exploitation of vulnerabilities has been reduced significantly. In over 70% of cases in 2026, the IMF said that software providers had almost no time to patch vulnerabilities before exploitation began, a jump of 20% compared to a year ago.

While the report’s authors note that AI can help to address shortages of cyber expertise through stronger monitoring, threat detection and automated response to cyber attacks, AI also increases the urgency of strengthening foundational cyber resilience, including cyber hygiene, incident reporting, crisis preparedness and oversight of critical third-party providers.

Responding to a question the cyber threat to financial institutes and the global financial market, Caio Ferreira, deputy division chief in the global markets analysis division at the IMF, said that all countries need to address the risks identified by the IMF: “Which regions become more vulnerable in this sense are those that do not have appropriate prevention, and what we see globally is that prevention has been challenged by a lack of availability of cyber security professionals.”

Ferreira referenced data showing that there is a 40% shortfall in the number people needed in cyber security . Looking at specific regions, he said: “I think that broadly we see emerging markets as being less prepared but cyber threats impact every country. In advanced economies, it’s important to improve the focus on understanding what are the main nodes that can impact the cyber threats and the operational connections between different parts of the financial sector.”

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