Cybercrime costs financial services sector more than any other industry, with breach rate tripling over past 5 years
Cyber attacks cost financial services firms more to address and contain than in any other industry, and the rate of breaches in the industry has tripled over the past five years. The costs that firms incur when responding to cybercrime incidents is increasing as the risks to business, privacy and related data grow by the day, so much so that cyber security is outranking some of the more traditional business risks and concerns. The average cost of cybercrime for financial services firms globally has increased by more than 40% over the past three years according to recent data. While cyber attacks have a greater financial impact on the financial services industry than on any other industry, financial services firms continue to make prudent and sophisticated security technology investments that contribute to reducing the cost of breaches significantly. The greatest proportion of financial services firms’ cyber-defence spending is for more advanced solutions like security intelligence systems, followed by automation, orchestration and machine-learning technologies. While the cost of cybercrime for financial services companies continues to rise, financial firms have considerably more balanced and appropriate spending levels on key security technologies to combat sophisticated attacks than do those in other industries. This is particularly true with regard to the use of automation, artificial intelligence and machine-learning technologies, which could be critical to future cyber security efforts.
Rise in cybercrime against financial services
The average number of breaches per company has more than tripled over the past five years, from 40 in 2012 to 125 in 2017; that is slightly below the global average of 130 across all industries. A significant budgetary portion of financial services companies’ total security costs is spent on containment and detection of cyber breaches. The greatest impact of cyber breaches on financial services firms are business disruption and information loss, which together account for most of the cost to respond to cybercrime incidents. More can be done with regards to security technologies deployed in financial services. Only one-quarter of financial services companies have actually deployed AI security technologies and fewer than one-third use advanced analytics to fight cybercrime.
Most costly attack types for financial services firms
At the same time, financial-services firms appear to be less affected than other industries by more-common forms of cyber attacks. While 2017 saw a string of malware attacks – including the WannaCry and Petya attacks, which cost several global firms hundreds of millions of dollars in lost revenues – malware attacks were among the least costly types of cyberattacks for financial services companies. The costliest types of attacks for banks, hedge funds, asset managers and insurers are denial of services, phishing and social engineering, and malicious insiders. Banks, hedge funds, asset managers and other financial services firms have implemented advanced solutions for malware, reducing the susceptibility to such attacks, so the cybercrimes they’re currently grappling with are largely different from those affecting other industries. One such threat is identifying bad actors within their own organisation and figuring out the right combination of human effort with technologies to combat this growing issue. One thing is certain, however: When it comes to fighting cybercrime, firms can’t hire their way out of this issue, as there simply aren’t enough talented cyber professionals out there, hence the rise in using MSP’s (managed service providers) like Storm IT Financial, who constantly keep up to date and train their staff as IT and cyber security is their business, leaving their clients to do their business. Investing.
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