Financial sector hit by £1.34bn security test bill
Written by Peter Walker
The financial sector is forking out more than £1.34 billion annually to combat the growing threat of data breaches and system outages.
Research from AVORD has revealed that 95 per cent of businesses in the financial sector have seen an increase in the number of data breaches over the last five years. And as a result of the growing threat to mobile devices, more than half (52 per cent) are now investing more in identifying and protecting against app-based threats.
In December, the security testing platform commissioned Coleman Parkes to survey 400 businesses with a turnover in excess of £1 million - of which financial services made up 20 per cent - talking to owners, chief information
security officers, chief information officers or heads of IT.
With 76 per cent of businesses claiming the cost of testing is too expensive, there is a clear demand for change, according to AVORD.
More than three quarters (79 per cent) of businesses in the financial sector currently outsource the security testing on their critical assets. AVORD stated that the need to use consultancies is being driven by a skills shortage, with 41 per cent of those surveyed saying that they do not have the in-house employee skills and knowledge to carry out security testing.
The research suggested that “opportunistic multi-national consultancies” are to blame for inflating the price of security testing in the UK, with many financial services firms being charged inflated prices to conduct tests on their assets.
The financial sector was subject to the most security breaches of all surveyed industries last year, with 41 per cent suffering from an attack. Of those hit, 77 per cent reported that the breach occurred partly as a result of issues with the security testing process.
The impact of breaches in the past 12 months has been wide spread, with 84 per cent reporting lost customers, 48 per cent having to pay legal fees and 58 per cent experiencing reputational damage. In addition, 68 per cent were hit by fines from regulators.
Brian Harrison, founder and chief executive of AVORD, commented: “Companies are struggling to cope with the ever-increasing threats impacting on their attempts to secure systems at current costs.
“Unless something changes, businesses will be forced to cut corners, and this will inevitably mean there are more data breaches and system outages.”