Cybersecurity Disconnects Pose Huge Risks for Financial Services Firms

As financial services companies rapidly adopt new technologies, they are struggling to keep up with the pace of change and prioritize cybersecurity. A recent survey reveals that many institutions are underspending on cybersecurity and lack the talent to address emerging threats.

The State of Cybersecurity Spending

According to the survey, 70% of companies believe they are underspending on cybersecurity, with none reporting overspending. This represents a significant shift from previous years, as companies increasingly recognize the critical importance of investing in cybersecurity capabilities.

Compliance and Maturity

Increased compliance with regulations was cited by 70% of respondents as a key factor in maturing their cybersecurity capabilities. However, simply meeting compliance requirements is not enough. Companies must take a proactive approach to compliance, integrating security into their technology adoption plans from the outset. As regulations catch up with emerging technologies, companies that fail to do so will be left vulnerable to attack.

Spending Habits Reveal Concern

The survey also revealed a lack of confidence in current spending habits. Only 13% of respondents devote more than 20% of their overall IT budget to cybersecurity, despite acknowledging the need for increased investment.

Regional banks (Tier 2) are expected to see the largest growth in cybersecurity spend over the next two to three years, as they near the Tier 1 capital threshold and anticipate increased scrutiny from regulators.

Talent Gap Persists

Despite recognizing the importance of cybersecurity, many companies lack the talent to address emerging threats. A staggering 65% of respondents expressed concerns about gaining and retaining appropriately skilled cybersecurity talent.

To address this issue, companies may need to consider alternative solutions, such as using technology to augment talent or outsourcing certain security functions.
More than half of respondents plan to rely on internal resources to close the capability gaps related to emerging technologies.

Call to Action: Future-Proof Your Environment

The technology landscape is evolving rapidly, and financial services firms must take immediate action to future-proof their environments. Companies should ask themselves four key questions:

Do we have the right technology priorities, aligned with our security capabilities?
Do we have the right metrics and reporting for managing cyber risks?
Are we investing in the right things?
Do we have the necessary talent to address emerging threats?

By answering these questions and prioritizing cybersecurity, financial services firms can reduce their exposure to risk and ensure a more secure future.

Many companies are planning to invest heavily in cloud and edge computing technologies, but few have considered the security implications of these investments. As adoption accelerates, companies must prioritize securing their cloud and edge environments to avoid falling victim to emerging threats.