Banks face an ongoing challenge against cyber attacks

Worldwide analysis from ServiceNow reveals that banks face an ongoing problem to guard their programs from subtle assaults. Simon Cox, Chief Transformation Officer at ServiceNow, walks via among the report’s key findings.

The examine, performed worldwide amongst 750 C-level executives from banks with over $1 billion price of property, examined the frequency of cyber assaults over the previous two years. The examine discovered that as many as 68% of the banks surveyed had skilled at the least one severe cyber assault.

What’s much more alarming is that these assaults typically got here within the type of subtle and well-coordinated assaults. This underscores the rising skill of cybercriminals to avoid a financial institution’s safety and achieve entry to delicate monetary information.

Along with information breaches, cyber assaults even have hefty monetary penalties. The examine reveals that one cyber assault can price banks as much as $5 million in damages. These prices embrace direct monetary losses because of stolen funds, the price of restoration, reputational harm and attainable penalties. This underscores the significance of continued funding in safety measures.

Operational challenges and failures

Trendy banking depends on complicated technological infrastructures and programs to course of monetary transactions, handle buyer information and guarantee regulatory compliance. Nevertheless, reliance on know-how carries important operational dangers, notably when legacy programs and processes are concerned.

In consequence, the examine discovered that the banking trade frequently faces operational challenges and failures, with 60% of the banks surveyed reporting severe operational failures prior to now yr alone. This not solely resulted in important monetary losses (as much as $10 million per incident), but in addition affected buyer satisfaction and the financial institution’s picture. In spite of everything, prospects count on banking providers to operate seamlessly with out interruptions.

Outdated programs are additionally typically susceptible to failure, gradual to answer buyer requests and tough to take care of. Upgrading the know-how infrastructure, investing in versatile and scalable programs, and adopting greatest practices for managing know-how property are wanted to enhance operational effectivity, based on the examine.

Along with modernising and upgrading, preventive upkeep and steady monitoring additionally play a serious function. Banks ought to take proactive measures to determine potential issues earlier than they result in main failures. The analysis suggests banks that implement proactive monitoring and upkeep can considerably cut back their threat of great failures.

Knowledge administration, privateness and compliance

The examine additionally discovered that 80% of banks wrestle with information safety and privateness rules. Moreover, the banking trade is underneath fixed strain from rules and more and more stringent necessities.

Rising regulatory calls for on information administration and privateness additionally presents a fancy problem inside the banking trade. The survey clearly illustrates that compliance with privateness legal guidelines such because the Basic Knowledge Safety Regulation (AVG) in Europe, and buyer information administration are high priorities for banks.

But as many as 80% of banks wrestle with information administration and privateness compliance. That is an alarming discovering given the monetary dangers and reputational harm related to information breaches and privateness violations. A violation of the AVG may end up in fines of as much as 4% of a financial institution’s world annual income.

These information challenges are additional compounded by the rising regulatory pressures dealing with the banking trade. Complying with complicated rules, that are consistently altering, is a rising concern for banks. Laws such because the Basel III requirements for capital necessities and the Dodd-Frank Wall Road Reform Act impose important necessities on banks, with doubtlessly excessive compliance and reporting prices. For some banks, this may be as excessive as 15% of their complete working prices.

A holistic strategy

All of the challenges highlighted within the examine have one factor in frequent: they require innovation and a strategic strategy. Banks that need to survive within the ongoing battle for technological safety, modernisation and regulatory compliance can not sit nonetheless. It’s a difficult period of change, but in addition of alternative for banks keen to innovate and spend money on their future.

The query just isn’t whether or not they can meet these challenges, however how they are going to accomplish that and what alternatives they’re keen to take into motion.