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Financial Institutions Embrace Technology Amid Regulatory Pressure
In today’s rapidly evolving landscape, financial institutions are racing to stay ahead of the curve by adopting new technologies and prioritizing cybersecurity.
The Quest for Regulatory Compliance
The quest for regulatory compliance is no longer seen as an afterthought, but rather as a critical component of business strategy. Financial institutions are recognizing the need to future-proof their technologies and invest in emerging areas like artificial intelligence (AI) and cloud computing.
Cybersecurity Spending on the Rise
Despite acknowledging underspending in cybersecurity capabilities, 13% of financial institution IT budgets are currently devoted to cybersecurity, with a projected increase over the next two to three years. Regional banks, in particular, are expected to see significant growth as they near the Tier 1 capital threshold and face increased scrutiny from regulators.
Talent Shortages and Special Initiatives
As companies invest heavily in emerging technologies, they must also address growing cyber risk by implementing special initiatives and controls. However, fewer than 10% of respondents lack plans to invest in protecting top four technologies, highlighting the need for prioritization.
Financial institutions are relying on talent to address security capability gaps, with 65% expressing concerns about gaining and retaining appropriately skilled cybersecurity talent. Outsourcing some cybersecurity work is not enough, as more than half of respondents plan to rely on internal resources to close capability gaps related to emerging technologies.
Call to Action: Future-Proof the Environment
As the technology landscape continues to evolve rapidly, financial institutions must act now to future-proof their environments. By prioritizing security capabilities and investing in emerging areas like AI and cloud computing, companies can stay ahead of mounting risks and ensure long-term success.
To achieve this, financial institutions should ask themselves four key questions:
- 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 to support our cybersecurity strategy?
- Have we laid the foundation for action by assessing our current security capabilities and identifying areas for improvement?
By taking these steps, financial institutions can position themselves for success in a rapidly changing landscape and ensure the long-term protection of their environments.