G7 finance leaders have agreed to hold exercises to simulate artificial intelligence-powered cyberattacks on banks, as policymakers continue to seek ways to protect strategic systems from cybersecurity risks.
Japanese Finance Minister Satsuki Katayama told reporters on Thursday that G7 finance deputies “had been discussing the idea of doing tabletop exercises on frontier AI, which was signed off at the ministerial level.”
“Frontier AI” describes the most advanced models that are at the leading edge of what the technology can do.
Katayama made the remarks on the sidelines of the International Monetary Fund’s (IMF) annual gathering in Bangkok after meeting with central bank governors and fellow finance ministers.
A Japanese finance ministry official who attended the leaders’ meeting told reporters on Oct. 15 that the exercises will test how financial authorities can respond to AI-driven cyberattacks.
The exercises would involve G7 finance ministries and central banks, but could also include private financial institutions, the official said.
The agreement came after the IMF said this week that a major AI-enabled cyberattack on financial institutions or critical services could undermine confidence, which would ripple through global markets.
“Frontier AI models could accelerate both attacks and defenses, increasing the importance of cyber resilience, incident reporting, crisis preparedness, and oversight of critical third-party providers,” the IMF said in an Oct. 13 blog post.
The post noted that cyber threats can be difficult to contain, saying that in more than 70 percent of reported cases of cyberattacks so far this year, “software providers had almost no time to patch vulnerabilities before attackers exploited them.”
“That’s more than double the share in 2021, when providers typically had close to 300 days to fix vulnerabilities,” it said.
It recommended strengthening cyber defense capabilities, including testing financial institutions’ resilience.
As a further blog post from Oct. 15 explained, with finance becoming more digital, cyberattacks have become a growing source of risk.
“AI adds urgency by accelerating vulnerability discovery, exploitation, and attack, compressing the attack-defense cycle to machine speed,” it said.
“A major attack affecting payments, trading, or access to deposits could cause immediate losses and undermine confidence.”
Banks Told to Prepare for Cyberattacks
Also on Thursday, Bank of England Deputy Governor Sarah Breeden said that her institution is working with banks to help prepare to recover from AI-empowered cyber breaches.
Breeden told the annual meeting of the Institute of International Finance in Bangkok that through technological advancement, AI poses a systemic risk to financial systems.
She said that it was no longer enough for financial bodies to assume cyberattacks will not get through, and they needed to think about recovery options if they are hit.
“Cyber is always the thing that I say keeps me up at night,” Breeden said. “The thing that I worry about the most is waking up and one of our most systemically important banks or a bit of core infrastructure has been attacked and is paralyzed.”
Reuters contributed to this report.
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