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JPMorgan Chase is currently contending with a surge of cyber attacks, with fraudsters becoming “smarter, savvier, quicker, more devious, more mischievous,” as stated by Mary Erdoes, the head of asset and wealth management at the bank.
Speaking at Davos on Wednesday, Erdoes revealed that the bank allocates USD 15 billion annually to technology and employs 62,000 technologists, a considerable portion of whom are solely dedicated to addressing the escalating cybercrime threat.
She stressed the necessity of such a substantial workforce, stating, “We have more engineers than Google or Amazon. Why? Because we have to. The fraudsters get smarter, savvier, quicker, more devious, more mischievous. It’s so hard, and it’s going to become increasingly harder.”
In addition, Erdoes disclosed that the bank faces a remarkable 45 billion hacking attempts daily. JPMorgan later clarified this figure, stating, “Ms Erdoes was referring to observed activity collected from our technology assets, malicious or not. This activity is then processed by our monitoring infrastructure.” The clarified activities encompass various actions, including user logins like employee virtual desktops and scanning activity, often characterized by high automation and a lack of specific targeting.
Western financial institutions have witnessed a surge in cyber attacks over the past two years, partially attributed to Russian hackers responding to sanctions imposed after their full-scale invasion of Ukraine. Simultaneously, the utilization of artificial intelligence by cybercriminals has contributed to an increase in both the frequency and sophistication of attacks.
According to cybersecurity company Sophos, the finance industry experienced a 64% surge in ransomware attacks last year, nearly doubling the 2021 levels. JPMorgan, a major player, fell victim to one of the largest cyber attacks on a bank a decade ago when data from 83 million accounts, including 76 million households and 7 million businesses, was compromised.
Addressing the Davos event, Gita Gopinath, Deputy Managing Director of the IMF, expressed concerns about the use of AI by cybercriminals, raising alarm bells for policymakers. She emphasized that “Given the tremendous uncertainty about the scale of the impact of this technology and the way it is evolving, policy could be playing catch-up”, “We could risk having a big event before we actually work out how to fix it”.
Gopinath highlighted the substantial investment by banks in AI technology, acknowledging its productivity benefits while underscoring risks related to data privacy and embedded biases in lending decisions. Additionally, the IMF is wary of the long-term risk of AI influencing financial market behavior, potentially resulting in amplified financial cycles.
“If we enter a world where all major banks are using this technology, which is being produced by three or four big companies, are we going to see supercharged herding behaviour, where AI bots or models are sentiment-driven and feed off of each other?
“You then end up with much bigger amplitudes in the financial cycle — you get big credit booms and big credit busts. This is something we are looking into.”
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