While these ever emerging technologies such as Digital transformation, Artificial Intelligence, Internet of Things, Cloud Computing, Enterprise Mobility and Mobile Banking, have brought about efficiency and increased innovations, they have also exposed the financial services sector to cybercrime. Some notable incidents of 1|Page  cybercrime include, the attack on the Central Bank of Bangladesh, Russian retail bank and seven banks in the United Kingdom. The financial services sector is a key target by criminals because it is the custodian of large amount of funds in the economy. For this same reason, the financial services sector has to also deal with other types of risks, which among others include, fraud, extortion, money laundering, illicit financial flows, market manipulation, data theft, and currency attacks. With statistics showing an increase of cyber-attacks in the financial sector, the importance of ensuring that our institutions are cyber resilient cannot be over-emphasized. Ladies and gentlemen, the financial services sector has to see cybersecurity for what it is, a large scale operational risk deserving the utmost attention and thus develop the necessary systems and cultures throughout the sector to deal with this risk. Key to the development and operation of these systems and cultures is the need to nurture talent capable of addressing cyber security threats through prompt detection, investigation, reporting, prosecution and prevention. Distinguished participants, let me also emphasize that cyber risks should be viewed from an enterprise-wide perspective.
And left unattended, these vulnerabilities are only likely to intensify.25 III. Policy Implications How should monetary policy makers respond to these challenges? In the short term, they must play the hand they’ve been dealt. The prevalence of dollar invoicing means using the flexibility in inflation targeting. 22  In addition to the direct costs of financing these reserves, there have been indirect costs including the crowding out of domestic investment. 23 Rachel, L and Smith, T (2015), ‘Secular drivers of the global real interest rate’, Bank of England Staff Working Paper No. 571, estimate that the savings glut has lowered global real rates by 25 basis points over the past 30 years. 24 See ‘Real interest rates and risk’, speech by Gertjan Vlieghe given at the Society of Business Economists’ Annual conference, 15 September 2017. 25 If history serves as a guide, EMEs’ external liabilities could double as a share of GDP by 2030: market-based finance could then account for half of external liabilities and investment funds could represent 40% of market-based finance flows to EMEs. By 2030, the reduction in sustainable capital flows arising from push factors could completely cancel out the positive impact stemming from domestic reforms in EMEs over the past two decades. To offset this reduction in the sustainability of EME capital flows, their reserves would have to double over the next ten years.