Bank of England and IMF bosses issue stark warning on cyber threat to trust

The heads of the Bank of England and the International Monetary Fund have issued a stark warning that rising cyber-attacks risk undermining trust in the financial system.

Speaking on a panel about online fraud at the IMF and World Bank meetings in Bangkok, the governor of the Bank of England, Andrew Bailey, pointed to alarming headlines about self-replicating AI agents hijacking personal devices, and the French supermarket hack that heated fridges up to 50C.

“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,” he said.

Pointing to the key importance of technology in underpinning today’s financial system, he added: “If we don’t have trust in money, we don’t operate as a society.”

Echoing his concerns, the IMF’s managing director, Kristalina Georgieva, said the toll of cyber fraud was now so great that people could decide to opt out of the formal financial system altogether.

“I was born and grew up on the other side of the iron curtain,” the Bulgarian economist said. “We didn’t trust the system. What did we do? I would have my dollars in a shoebox under my bed.

“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.”

She said this threat was particularly acute for people on the fringes of the financial system. “Imagine what would happen if trust disappears or is eroded to a point that people no more have the courage to be included,” she said.

Her comments followed a warning from the IMF on Tuesday that the possibility of a big cyber-attack was one of the factors raising the global financial stability threat level to “elevated”, alongside higher borrowing costs and the risk of an AI share price crash.

Bailey stressed that fraud was now frequently committed via social media platforms and apps, not just traditional financial channels – and urged big tech to take responsibility.

He contrasted today’s environment with the legal status in the UK of outlets such as newspapers, which are responsible for the veracity of everything they publish.

Instead, the governor said: “We’ve moved into quite an extreme position of, well, these platforms are open to everybody and there’s no real liability to the provision of the platform to what’s on it. Guess what? Everything’s on it. You know, the good, the bad and the incredibly ugly and downright criminal and terrible.”

He added: “I don’t go around pointing the finger at people and saying: ‘You’re bad.’ What I have said is: ‘Look, there is responsibility all around.’ And we need to evolve to a world where everybody understands this responsibility, and everybody is then a part of addressing the problem.”

He added: “We must get the social media companies involved because a lot of this fraud is transmitted through those channels.”

Bailey called for the same tools that are being used by cybercriminals to be put to work protecting the financial system. “I’m going to use a sporting metaphor: this technology is arming the offence but it can also arm the defence, and it must do.”

The panel event at which the pair were speaking was to launch a new set of international principles for avoiding cyber fraud in financial institutions, called the Bangkok blueprint.