JPMorgan Faces 45 Billion Hacking Attempts Per Day As Jamie Dimon Calls Cyber Attacks 'Biggest Threat To The US Financial System'

When JPMorgan Asset & Wealth Management CEO Mary Erdoes took the stage at Davos, she mentioned JPMorgan Chase & Co. JPM spends $15 billion on technology per year and employs 62,000 technologists, with many focused solely on cybersecurity. 

Don't expect these numbers to drop anytime soon.

“There are people trying to hack into JPMorgan Chase 45 billion times a day,” Erdoes said. Even worse is that it’s already double what it was last year — and the attacks are only getting more sophisticated.

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JPMorgan Chase CEO Jamie Dimon is keen to point out that the company has a fortress balance sheet. The goal of this is that regardless of economic conditions, JPMorgan is managed so that when others in the industry are forced to pull back, it can continue serving its customers. 

It's not just deteriorating economic conditions that worry Dimon. In 2019, he described the threat of cyber attacks potentially being "the biggest threat to the U.S. financial system."

This led the bank to have more engineers than massive big tech companies such as Google or Amazon.com Inc. JPMorgan is not just a bank; it's one of the world's largest tech companies.

JPMorgan came out with a correction to Erdoes's 45 billion hacker attempts per day quote, saying, "Ms. Erdoes was referring to observed activity collected from our technology assets, malicious or not." All it takes is one successful bad actor to cause massive consequences. JPMorgan knows this firsthand from being a victim of one of the largest data breaches in history.

A 2014 cyber attack that compromised data from 76 million households and 7 million small businesses lasted for years and was only discovered by JPMorgan in late July 2014 before being disclosed in September of that year. It was as big a wake-up call as possible.

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Why the recent rise in malicious cyber activity? Experts have pointed to two factors — the rise of attacks from Russia since the start of the war in Ukraine and the use of artificial intelligence to help bad actors write more sophisticated malware.

While ChatGPT might have safeguards built in, it has rivals sold on the dark web with no ethical safeguards, making it easier than ever to write code for nefarious purposes.

It remains to be seen how much expenses will increase in the coming year for banks to protect their sensitive data from attacks, but the costs don't just come from hiring talented engineers. The costs of cyber insurance have soared as insurers have repriced their risk exposure in recent years.

Sources differ on the percentage of the increase. In 2021, the cost of cyber insurance increased about 25.5% year over year, and in 2022 rates doubled in the first quarter of the year and increased another 79% in the second quarter of the year.

While the big banks might face the most targets, consider the risk to smaller upstarts with fewer resources and security measures in place.

Bigger companies may face the highest absolute preventative costs to stop and insure cyber attacks, but if they're able to withstand what might be the biggest threat to the U.S. financial system, it's a small price to pay. Being one of the biggest tech companies in the world in the face of these threats might end up being an underrated competitive advantage for JPMorgan compared to its competition.

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