More than 80 per cent of financial services firms are planning to invest in preventative technology and IT systems, as well as test their defence and response mechanisms over the coming year, according to a CBI/PwC Financial Services survey.

The quarterly survey of 98 financial services firms found that increasing efficiency and ensuring regulatory compliance were the most important spurs for investment. However firms recognised that compliance costs could divert funding from other investment projects, such as technology and new product development over the next two years.

When asked which projects would be most likely to miss out on funding due to compliance costs, transformation of business operating model was top, followed by digitisation of front-end channels to the customer, technology (including business platforms and applications), and new product development.

Some 72 per cent of firms also plan to invest in cyber security training and awareness programmes, while 67 per cent (and 100 per cent of building societies) expect to employ expert security personnel.

Rain Newton-Smith, chief economist at CBI, said: “Firms continue to keep a close eye on the challenges ahead, from concerns over labour shortages and the impact of regulation costs on business expansion. It’s reassuring to see them taking meaningful steps to address cyber crime, as it rises up the risk register. A deeper understanding of the need for greater diversity and concrete plans to improve it will also enable better business decisions to be made.”

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