Cybercrime a Growing Threat to the Financial Services Sector, PwC Report
Cybercrime has risen up the ranks over the last year to become the second most commonly reported economic crime affecting companies in the financial services (FS) sector after asset misappropriation (which remains the traditional and most popular way of defrauding an organisation), according to the latest findings from PwC’s global economic crime survey.
Cybercrime accounted for 38% of economic crime incidents compared to 16% for other industries in the survey which in total analysed 3,877 responses spanning 78 countries, with 23% of those ( 878 respondents) coming from the FS sector.
While FS organisations have historically taken significant steps to control and safeguard their customers’ data, the survey shows they are nevertheless concerned about the growing threat. Half of FS respondents perceive the risk of cybercrime to have increased in the last 12 months, compared with 36% for other industries.
Some of the developing technologies such as using ‘apps’ to access banking services and mobile phones to make payments are likely to increase, rather than decrease these risks.
Some 45% of FS respondents suffered frauds in the last 12 months, a much higher figure than the 30% reported by other industries. This is an indicator that the sector remains very attractive to criminals due to the significant amount of cash, assets and sensitive client data that is available to them as well as the nature of the industry.
Andrew Clark, forensic services partner, PwC, said: “The rise in cybercrime is not so surprising given the sector holds large volumes of the type of data cybercriminals are interested in and there is an established underground economy servicing the needs of the market for stolen and compromised data. However, our survey shows cybercrime accounts for a much greater proportion of economic crime in the FS sector than in other industries.
“Cybercrime puts the FS sector’s customers, brand and reputation at significant risk. Regulators are increasingly viewing cybercrime as a key area of focus and financial institutions are expected to have appropriate systems and controls in place to fight this growing threat,” he added.
Asked what aspects of cybercrime they were most concerned about, FS respondents had greater concern around all of the categories of collateral damage listed when compared to other industries. More than half said their greatest concern was around reputational damage.