In the next year, 86 percent of financial services firms plan to increase the time and resources they spend on cyber-security.
Duff & Phelps conducted research that shows firms are preparing to implement stricter cyber-security measures in response to growing scrutiny and pressure to protect investor information and prepare for new legislation this year.
The survey included responses from 183 senior financial services professionals operating in Europe, Asia and the US.
Jake Summerfield, managing director at The Network Group, commented: “In the wake of recent high-profile cyber-attacks such as Tesco Bank, Lloyds and TalkTalk, it's no wonder that some of the UK's largest companies are starting to take seriously the threat of cyber-crime. As this research shows, firms have clearly recognised the need to prepare for incoming regulation such as GDPR, which promises more punitive action against companies should they suffer a data breach.”
The research found that 66 percent of firms expect cyber-security to be a priority for regulators this year, and 31 percent think it will be the most important priority for regulators.
Thirty-nine percent of firms also believe regulators have intentions to increase scrutiny on financial crime and KYC compliance departments, an area that is increasingly converging with cyber-security as regulators expect firms to take a holistic view of cyber-threats.
Sixty-two percent of respondents think the Securities and Exchange Commission's proposed rules to enhance information reported by investment advisers will impact their firm. Some firms are now must implement processes to protect against future cyber-attacks.
With the British government introducing a new cyber-security strategy and the White House currently reviewing US cyber-security strategy, it's plain that cyber-security will be a top priority for regulators, government and financial institutions in 2017.
Jason Elmer, managing director, compliance and regulatory consulting at Duff & Phelps, said: “Cyber-security is at the top of the agenda for financial services firms today. In the wake of high-profile cyber-attacks, many are anticipating clearer and more punitive cyber-security regulations to be implemented. Firms are proactively looking to strengthen cyber-defences as a result, and this is an opportunity for regulators to collaborate with financial institutions to form new rules.
“What's also clear is that commercial pressures from investors concerned about the security of their sensitive data will accelerate any attempt to improve cyber-security measures. For all these reasons, 2017 is set to be a watershed year for cyber-security regulation.”