Financial services organisations must take data security more seriously and adapt their strategies to mitigate the risk of emerging cyber threats in what’s tipped to be the sector’s next disruptive decade. These are the findings of a new White Paper commissioned by managed service provider Advanced 365.
Security attacks impacting the financial services sector 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, in truth, could well be even higher when considering the damage done to customer trust.
A detailed survey of 758 financial services respondents recently conducted by PwC has revealed that the average number of security incidents climbed by 8% in 2014 to a record-breaking 4,978 per organisation.
Around 80% of cyber attacks succeed in less than one day, yet only 21% of those attacks are discovered in the same day. The average breach inside major companies remains undetected for somewhere around 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 then expose more security flaws.
Adapting to new threats
Neil Cross, managing director at Advanced 365, stated: “Data security is the most critical issue affecting the financial services industry today. However, many firms are not doing enough to adapt to the emerging new threats which will become increasingly disruptive across the next decade.”
Cross continued: “The nature of cyber crime has and is maturing. Without question, organisations must take this issue more seriously and invest in updating their security strategies now before it’s too late.”
The White Paper 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 on a global basis come 2020.
The payment systems involved will “revolutionise” how consumers purchase goods and services but will also 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 in-depth 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.
In conclusion, Cross added: “Businesses must accept the fact 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 them.”
Read the White Paper, entitled ‘The Future of Data Security in Financial Services’, by clicking here.
*Report produced by Information Technology-focused research companies Kaspersky Lab and B2B International