Cyber crime climbs risk list in UK financial sector

London, UK

Senior leaders within financial institutions have become less optimistic about the prospects for their own sector as the outlook for the domestic economy deteriorates. This is according to a new report from Lloyds Bank Commercial Banking, now in its fourth year, the survey canvassed the views of more than 100 senior decision makers at a broad range of organisations in the financial services industry. The aim is to explore the key themes shaping their sector, and on the theme of security, significantly, the risk posed by cyber crime has leapt from eighth place to fourth since 2018.

The report found that more than half of firms (58%) are expecting growth in the UK economy to slow down in the next 12 months – twice as many as held that view in 2018 (29%). Two-thirds of them (67%) expect domestic growth in the coming year to be weaker than G7 peers.

The three most significant risks cited by survey respondents remained unchanged on last year, with the UK’s departure from the EU top (58%), followed by economic uncertainty (36%), and new regulation (31%).

Significantly, the risk posed by cyber crime (29%) has leapt from eighth place to fourth since 2018. Last year 46% of respondents said one of their firm’s top three technology investment strategies for 2018 was to improve cyber security, behind improving customer satisfaction (49%) and reducing operating costs (48%). In 2019, cyber security moves to top of the tech agenda and with greater prominence – 70% are now prioritising it as an area for investment.

Robina Barker Bennett, Managing Director, Head of Financial Institutions, Lloyds Bank Commercial Banking, said: “The past year has presented many challenges for businesses. Against a backdrop of on-going global economic turbulence, it is unsurprising that sentiment among financial institutions towards the sector and the wider economy is lower than in previous years. 

In 2019, firms are arguably more dependent than ever on technology. With this rapid advancement, the risks from cyber crime are increasing, placing extra pressure on financial institutions to change the way they operate.”

Ian Bradbury, CTO for Financial Services, Fujitsu UK said, “Financial services leaders’ concerns about cyber security are warranted. As cyber criminals become increasingly sophisticated in how they carry out attacks, financial institutions are facing harsher scrutiny from not only consumers, but also government, about how they’re protecting peoples’ finances. The threat landscape is far more multifaceted than even five years ago, and organisations have often struggled to keep up; in fact, 44% of business leaders say they haven’t planned radically enough in the face of rapid technological and business changes.

“While technology has made payments easier for customers, organisations must ensure they are making the right investments in technology that will protect their finances and data. For example, one way of improving cyber security in financial services is through biometrics. Biometric technologies, such as palm vein authentication, provide a viable solution to preventing cyber threats and fraud. Many organisations are looking at this technology as the best way to digitally transform their offerings, and it’s the type of radical planning that is needed to keep financial organisations a step ahead in cyber security and resilience.”


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