Financial Services Firms Must Update Security Strategies
Financial Services firms must take data security more seriously and adapt their strategies to mitigate the risk of emerging cyberthreats in what is tipped to be the sector’s next disruptive decade. These are the findings of a new whitepaper commissioned by managed service provider Advanced 365.
Security attacks impacting the financial services industry are on the rise with 93% of firms experiencing data breaches in the last 12 months. The average loss in reputational brand value for a company is estimated to be between £117 million and £210 million but could be even higher when considering the damage to customer trust.
A survey of 758 financial services respondents, conducted by PwC, has revealed that the average number of security incidents climbed 8% in 2014 to a record-breaking 4,978 per organisation. Around 80% of cyberattacks succeed in less than one day, yet only 21% of these attacks are discovered in the same day. The average breach inside major companies remains undetected for 229 days.
The sector is facing unprecedented disruption due to sweeping technological and social trends, which pose new challenges to security. Threats will grow dramatically as many businesses continue to migrate from major legacy platforms which will expose more security flaws.
Neil Cross, managing director, Advanced 365, call data security “the most critical issue” impacting financial services today. “Many firms are not doing enough to adapt to emerging new threats, which will become increasingly disruptive in the next decade,” he said. “The nature of cybercrime has and is maturing. Without question, organisations must therefore take it more seriously and invest in updating their security strategies now before it is too late.”
The whitepaper also highlights how emerging payment technologies, such as Apple Pay, are expected to see mass market adoption by the end of 2016 with the mobile wallet market forecast to reach £3.34 trillion globally in 2020. The payment systems will revolutionise how consumers purchase goods and services but will become increasingly targeted by hackers.
Cloud computing, the Internet of Things and Big Data analytics are also influencing ever-changing regulatory and legislative requirements in financial services and offer a mix of risks and opportunities for managing data security.
While the survey reveals that 70% of executives believe that security represents a strategic risk for their companies, just 28% of financial services firms feel the risk of damages from data security breaches is outweighed by the cost of prevention.
Cross added that firms must accept that their security policies can no longer be focused on just identifying threats and preventing them. “In order to survive, they must also define areas of risk and develop mitigation strategies to match these,” he said.