Latest Payments News: Lloyd’s Warns Major Cyber Attack Could Cost Global Economy $3.5trn... and more


October 30, 2023

Our payments industry analysts work tirelessly each week to bring our customers all the latest news. Here is a snapshot of six of the main stories we have covered lately!

Lloyd’s Warns Major Cyber Attack Could Cost Global Economy $3.5trn

A new report by LloydsofLondon insurance firm has found that a cyber attack on a “major financial services payment system” could result in potential losses of $3.5trn for the global economy.

This figure was arrived at through a systemic risk scenario that models the global economic impact of a “hypothetical but plausible” cyberattack.

The three countries that would experience the highest five-year economic loss from the scenario were the US ($1.1trn), China ($470bn) and Japan ($200bn).

Lloyd’s added that the recovery time for individual countries or regions would depend on the structure of their economy, exposure levels and resilience — which financial service providers should continue to invest in.

“The #risk scenario released today highlights the important role of insurance in supporting and protecting customers against the potential threat cyber poses to businesses and society," said Bruce Carnegie-Brown, chairman of Lloyd’s.

“The global interconnectedness of #cyber means it is too substantial a risk for one sector to face alone.”

CPMI Issues New Report On Interlinking Of Faster Payment Systems

The Bank for International Settlements – BIS (BIS) Committee on #Payments and Market Infrastructures (CPMI) has published a new report on governance and oversight considerations for the interlinking of faster payment systems.

The report, issued as part of the G20’s cross border payments programme, describes ten initial considerations that were identified during CPMI workshops with global stakeholders.

Combined with additional insights that will be gained from further engagement with stakeholders and written feedback, the CPMI will later submit a final report to the G20 on governance and oversight of faster payments interlinking arrangements.

The G20 has identified governance and oversight of cross-border payment linkages as a priority in helping to achieve its 2027 targets for cost, speed, access and transparency.

US Treasury Official Sings Praise of India's UPI

A US Treasury official has highlighted India’s “outstanding” contribution to the advancement of bilateral instant payments linkages for cross-border payments.

Jay Shambaugh, under secretary for international affairs at the Treasury, made the comments during a speech at Harvard Law School this week.

“Some jurisdictions with strong bilateral economic relationships are going further and interlinking their fast payment systems,” he said.

“India stands out as a jurisdiction advancing bilateral links between its Unified Payments Interface system (UPI) and those of other countries, including Singapore and the United Arab Emirates.”

He added that several ASEAN countries — namely Thailand, Malaysia, Singapore, Indonesia and the Philippines — have shown even “greater ambition” in aiming to link up their instant payment systems multilaterally.

No 'Compelling Argument' For Retail CBDC, Says Fed Governor

A member of the board of governors at the US Federal Reserve Board has said that retail Central Bank digital currency (CBDC) is a solution looking for a problem to solve.

Speaking at an event at Harvard Law School, governor Michelle Bowman said we have seen a range of arguments in the public debate about issuing a CBDC.

These include addressing frictions within the payment system, promoting financial inclusion and providing the public with access to safe Central Bank money.

“These are all important issues,” she said. “But I have yet to see a compelling argument that a US CBDC could solve any of these problems more effectively or efficiently, or with fewer downside risks for consumers, than alternatives.”

Bowman went on to say that the US has a “safe and efficient” payment system that is already being improved by innovations such as FedNow.

“The potential uses of a US CBDC remain unclear and, at the same time, could introduce significant risks,” she said.

'Nearly Unavoidable' That AI Triggers A Financial Crisis, Warns SEC Chief

Unless regulators step in, artificial intelligence (AI) could have disastrous effects on the financial services sector, the head of a US regulator has said.

In an interview with the FT, Gary Gensler, head of the U.S. Securities and Exchange Commission (SEC), said that regulating AI is a “hard challenge”.

This is because a variety of financial institutions may all be using the same base models, he said, and these models could be developed by tech companies that are not regulated by financial regulators.

"If everybody’s relying on a base model and the base model is sitting not at the broker dealer, but it’s sitting at one of the big tech companies,” Gensler said, this could produce herd-like behaviour in the markets.

Booking.Com Facing Class Action Over Failure To Pay Hoteliers, the world’s largest hotel bookings platform, could soon be facing a class action lawsuit due to failures to distribute payouts to hoteliers.

According to media reports, hoteliers in Europe and Japan have been affected, with some having to wait weeks or even months to receive their funds from the site.

More than 40 hoteliers, some representing large hotel chains, have contacted Japanese lawyer Hirotaro Kato, who plans to file a class action lawsuit and sue for damages later this week. responded in a statement saying that the issue was caused by a failed update to’s internal systems.

“Most payments have resumed but due to unforeseen technical difficulties, there are still delays with some of our partners,” it said. “We are urgently working to resolve these issues.”

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