Cyber threats to the financial system are growing, and the global community must cooperate to protect it$.$

In February $2016,$ hackers targeted the central bank of Bangladesh and exploited vulnerabilities in SWIFT, the global financial system$$s main electronic payment messaging system, trying to steal $$1$ billion. While most transactions were blocked, $$101$ million still disappeared. The heist was a wake$-$up call for the finance world that systemic cyber risks in the financial system had been severely underestimated.

Today, the assessment that a major cyberattack poses a threat to financial stability is axiomatic$$ not a question of if$,$ but when. Yet the world$$s governments and companies continue to struggle to contain the threat because it remains unclear who is responsible for protecting the system. Increasingly concerned, key voices are sounding the alarm. In February $2020,$ Christine Lagarde, president of the European Central Bank and former head of the International Monetary Fund, warned that a cyberattack could trigger a serious financial crisis. In April $2020,$ the Financial Stability Board $($FSB$)$ warned that $$a major cyber incident, if not properly contained, could seriously disrupt financial systems, including critical financial infrastructure, leading to broader financial stability implications.$$ The potential economic costs of such events can be immense and the damage to public trust and confidence significant.

Two ongoing trends exacerbate this risk. First, the global financial system is going through an unprecedented digital transformation, which is being accelerated by the COVID$-19$ pandemic. Banks compete with technology companies; technology companies compete with banks. Meanwhile, the pandemic has heightened demand for online financial services and made work$-$from$-$home arrangements the norm. Central banks around the globe are considering throwing their weight behind digital currencies and modernizing payment systems. In this time of transformation, when an incident could easily undermine trust and derail such innovations, cybersecurity is more essential than ever.

Second, malicious actors are taking advantage of this digital transformation and pose a growing threat to the global financial system, financial stability, and confidence in the integrity of the system. The pandemic has even supplied fresh targets for hackers. The financial sector is experiencing the secondlargest share of COVID$-19$related cyberattacks, behind only the health sector, according to the Bank for International Settlements.

Question:

Discuss in detail the strategies that can better protect the Global Financial System against Cyber Threats. $(30)$