Financial Crime World

Financial Institutions Prioritize Cybersecurity Amid Regulatory Pressures

A recent survey has revealed that compliance with regulations and increased defense against outside threats are driving financial institutions to mature their cybersecurity capabilities.

Compliance and Defense Against Outside Threats Drive Cybersecurity Investments

Seventy percent of companies surveyed cited increased compliance as a major factor in improving their cyber defenses, while 65% said they were underspending on cybersecurity. The study found that financial institutions devote an average of 13% of their overall IT budget to cybersecurity, but many acknowledge that this is not enough to address the growing threat landscape.

Special Initiatives for Emerging Technologies

Over 40% of respondents reported launching special initiatives to address security control gaps related to emerging technologies such as cloud and applied AI. This highlights the importance of financial institutions staying ahead of the curve in terms of technology adoption and cybersecurity capabilities.

Talent Gap Concerns

The survey also highlighted the importance of talent in addressing security capability gaps. While 65% of companies rely on internal resources to close these gaps, many expressed concerns about gaining and retaining appropriately skilled cybersecurity talent.

“The technology landscape in the financial-services industry will evolve rapidly over the next three to five years, accompanied by mounting risks,” said a spokesperson for the survey.

“It’s crucial that financial institutions future-proof their environments by asking themselves key questions about their pursuit of emerging technologies.”

Four Key Questions for Financial Institutions

The following are four key questions that financial institutions should be asking themselves:

  • Do we have the right technology priorities and are they aligned with our security capabilities?
  • Do we have the right metrics and reporting to measure cyber risk from an emerging-technology perspective?
  • Are we investing in the right things, taking into account security capabilities such as IAM capabilities?
  • How will we address the growing need for special initiatives and controls to secure our environments?

Regional Banks Expected to See Largest Growth in Cybersecurity Spend

The survey also found that regional banks (Tier 2) are expected to see the largest growth in cybersecurity spend over the next two to three years, likely due to increased scrutiny from regulators.

Conclusion

As the financial services industry continues to evolve, it’s clear that cybersecurity will remain a top priority. By investing in emerging technologies and developing the right talent, financial institutions can stay ahead of the curve and protect their environments against growing threats.