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The growing threat of cyberattacks against financial institutions could undermine public confidence in banks and encourage consumers to keep cash outside the formal banking system, senior officials from the International Monetary Fund (IMF) and the Bank of England (BoE) have warned.
BoE Governor Andrew Bailey and IMF Managing Director Kristalina Georgieva raised the concerns during an IMF and World Bank event in Bangkok, highlighting the risks that increasingly sophisticated cyber threats pose to financial institutions and the wider economy.
Their warnings come as banks deepen their reliance on digital infrastructure, artificial intelligence (AI) and interconnected technology to deliver financial services, creating new opportunities for innovation while expanding the potential attack surface for cybercriminals.
Digital trust becomes a critical banking concern
Bailey referred to recent reports of AI agents hacking personal devices, alongside an incident involving a French supermarket whose refrigeration systems were disrupted after a hacker infiltrated its network.
He argued that the debate surrounding AI should centre on trust in technology and the need for human control to maintain that trust.
“If you try to say what’s at the heart of this debate about AI – for me, it’s about trust in technology and it’s about human control to achieve that trust in technology,” Bailey said.
The BoE governor’s comments reflect a wider concern for financial institutions: as technology becomes central to banking operations, successful cyberattacks could damage not only individual institutions but also confidence in the financial system.
“If we don’t have trust in money, we don’t operate as a society,” Bailey said.
For banks, maintaining that confidence increasingly depends on effective cybersecurity controls, resilient payment systems, robust access management and the ability to protect customer information and deposits against digital threats.
IMF warns fraud could drive consumers away from banks
Georgieva echoed Bailey’s concerns, drawing on her own experience growing up under a system in which people lacked confidence in formal institutions.
“I was born and grew up on the other side of the iron curtain. We didn’t trust the system. What did we do? I would have my dollars in a shoebox under my bed,” she said.
She warned that the rapid growth in the speed, scale and cost of fraud could create a similar loss of confidence if financial institutions and policymakers fail to strengthen their defences.
“And I worry, today, that unless we figure out how to get ahead of this curve, given the speed, the scale and the cost of fraud growing up, we may end up with lots of people with shoeboxes under their beds,” Georgieva added.
Such a shift could have implications beyond individual banks. Reduced confidence in formal financial services could affect deposit mobilisation, digital payment adoption and the broader effectiveness of financial inclusion initiatives.
The comments underscore the importance of ensuring that digital transformation is accompanied by adequate safeguards for consumers, businesses and the institutions responsible for managing financial assets.
IMF identifies cyberattacks as a systemic financial risk
The warnings coincided with the IMF’s latest Global Financial Stability Report, which identifies cyber threats as a systemic risk as financial services become increasingly connected through digital infrastructure.
“A major attack affecting payments, trading or access to deposits could cause immediate losses and undermine confidence,” the report states.
The assessment highlights three factors intensifying the threat: greater dependence on interconnected technologies, increased reliance on a relatively small number of critical technology providers, and the growing sophistication of cyberattacks.
These vulnerabilities mean that an incident affecting a key service provider or shared technology infrastructure could potentially disrupt multiple financial institutions at the same time.
The consequences could extend to payment processing, financial market operations and customers’ ability to access their deposits, making cybersecurity an issue of financial stability rather than simply an internal technology concern.
AI raises the stakes for cybersecurity and regulation
The IMF report also warns that state-sponsored actors, ransomware groups and malicious insiders have access to increasingly powerful tools, including advanced AI models that have demonstrated strong capabilities in network-attack simulations.
As these capabilities evolve, financial institutions may face more sophisticated attempts to exploit vulnerabilities, compromise sensitive information and disrupt critical services.
Banks and their technology partners will therefore need to strengthen cyber risk assessments, incident response plans, third-party risk management and operational resilience. Greater coordination between financial regulators, cybersecurity authorities and technology providers will also be important in identifying threats and limiting the impact of major incidents.
For regulators, the challenge is to ensure that innovation in digital banking and AI does not outpace the controls required to protect financial stability.
The warnings from Bailey and Georgieva reinforce a central message for the financial sector: digital innovation can only deliver lasting value when customers trust the systems protecting their money. Strengthening cybersecurity, managing technology dependencies and maintaining confidence in digital financial services will remain essential as the sector becomes more interconnected.
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