There are two cyber threats which the financial sector needs to pay keen attention to. The first is ransomware attacks where the modus operandi has become more threatening. In addition to corrupting a victim’s data using crypto-ransomware, attackers are now exfiltrating information from their victims. 6/9  BIS central bankers' speeches  MAS has asked financial institutions to review the adequacy of their internal IT controls, as well as incident response and business continuity plans to fend against the latest ransomware threats. Second, cyber criminals are targeting major third-party IT vendors to amplify the coverage of their attacks. The cyber attack on Solarwinds is a powerful illustration of the increased sophistication and persistence of cyber criminals. They are now attacking supply chains to infiltrate the networks and systems of multiple entities. MAS has exhorted financial institutions to exercise strong oversight of arrangements with third party service providers, to ensure system resilience and maintain data confidentiality. FINANCIAL SECTOR PERFORMANCE Let me now provide an update on the financial sector. In 2020, the financial services sector 9 grew by 5.1% even as the overall economy contracted. In the first half of this year, we estimate the sector grew by about 6%. Growth has been broad-based across the financial services sector. The banking industry has been supported by strong fee income growth. The insurance industry expanded strongly on the back of robust demand for single-premium life insurance products. The payments industry grew significantly as adoption of e-payments gained traction with businesses and individuals moving towards online transactions.

The broader economy should see a recovery in the second half of this year alongside strengthening global demand and further progress in our vaccination programme. Trade-related activities such as manufacturing and wholesale trade will be supported by resilient global trade flows and robust upswing in the global tech cycle. Modern services, particularly the financial and ICT sectors, are set to expand at a firm pace this year, amid a pickup in credit intermediation activities and the ongoing digitalisation of business processes which has been accelerated by the pandemic. Moreover, compared to a year ago, Singapore is much better equipped to handle the pandemic, with more effective testing and tracing, swift isolation of infected cases, and vaccination. Singapore’s GDP growth could exceed the upper end of the 4 to 6% forecast range, barring a setback to the global economy. Last month, the official forecast range was maintained at 4 to 6% in light of the deterioration of the domestic COVID-19 situation and consequent Phase Two (Heightened Alert). MTI, together with MAS, will review the forecast range in August when preliminary estimates for Q2 GDP are available. The resident unemployment rate should continue to gradually decline. Total employment expanded by 14,000 in Q1 this year, the first expansion after four consecutive quarters of contraction. The Phase Two (Heightened Alert) measures and continued restrictions under Phase Three (Heightened Alert) however will have a transitory impact on employment in the domesticoriented services sector.