40% of Global Financial Institutions Cite Security as Their Biggest Challenge

40% of Global Financial Institutions Cite Security as Their Biggest Challenge

by January 16, 2019

The Regtech: Beyond Compliance report by Frost&Sullivan was commissioned by Enterprise Ireland to analyse key trends in the global regtech market. In it, they refer to a 2017 Frost & Sullivan end-user survey of banking, financial services and insurance (BFSI) companies that may have found it difficult to meet the demands of an evolving marketplace.

Researchers conducted 1934 interviews in total, surveying decision makers for an organisation’s IT & communications-related services in regions spanning North America, Europe, Asia Pacific, and Latin America. What this entails is that the sample size is quite large, and encompasses a variety of markets, though the exact percentage of participants from each region could impact the results somewhat.

Through that report, The Irish Advantage was able to derive the following information:

bank security biggest challenge banking financial services

Edited from The Irish Advantage

Unsurprisingly, more financial institutions (40%) cite security and privacy concerns as more concerning compared to the 32% average recorded by IT professionals altogether.

This is no surprise. After all, nearly a quarter of all cyber attacks are directed at them.

Ensuring that security on finance-related information not only for their own bottom line, but also their customers’ monies is crucial to the survival of a financial institution today. While in the days of yore, this effort was simply to store valuables in a vault, today’s increasingly digital world does not lend well to similar one-stop procedures.

Therefore, financial institutions come up with or hire someone to come up with solutions to combat digital thieves, and come up with procedures to ensure that all of this sensitive information stays in-house and in the right hands. This effort is often, costly.

 The Rapidly Shifting Fintech Scene Poses a Problem

For many of the more traditional financial institutions, agility was not a major concern when it comes to providing technology services. As consumer demand shifts and ebbs along with quickly shifting technology trends, a financial institution could be exposing themselves to breaches of data or theft if they carelessly extend their offerings without considering how to keep the new additions secure.

This concern tallies into the second-highest concern as highlighted by financial institutions (28%), which is managing multi-vendor solutions.

On top of that, baseline protections for their normal operations would also continue to require tweaks and upgrades to keep up with the threats to new and coming cyber security threats.

A financial institution’s need for agile, inexpensive and secure cybersecurity offering is real, and bonus points for those that are able to offer plugin services that can integrate into existing infrastructure.

Regardless of whether these solutions are developed in-house or from third-party firms, the need for robust and agile cybersecurity tallies with an incumbent’s need to keep up with current fintech trends to satisfy the global appetite.

In security, failure is not an option.

Two employees were sacked and five senior management executives, including the CEO, were leveled with hefty fines due to the SingHealth security breach, which saw the company’s failure to protect the personal data of 1.5 million SingHealth patients.

Keeping Up With Regulations

Beyond protecting themselves, banks also have to beef up security  to meet regulatory requirements, as three-quarters of jurisdictions worldwide are mapping out updated cybersecurity regulations, guidance or supervisory pratcies for the financial sector within 2019.

Some of these include the ISO 27k series of standards, published jointly by the International Organization for Standardization and the International Electrotechnical Commission to provide a globally recognised framework for best-practice information security management. This standard sets out the requirements that an organisation’s information security management system (ISMS) can be audited and certified against.

Other challenges cited by financial institutions include aligning IT with business strategies (27%), improving their digital presence (27%), and ensuring network stability (24%) among others.