The UK’s impending divorce from the EU may be grabbing the headlines at the moment, but cybersecurity and regulatory compliance concerns are also among the top worries of British financial services.
Having surveyed decision makers at more than 100 of these firms, Lloyds Bank Commercial Banking found that Brexit is these companies’ biggest concern. Of the people polled, 58% stated that the conscious uncoupling from the EU was their biggest worry. This was followed by 36% saying the same about economic uncertainty and 31% worrying about new regulations.
Cybercrime came fourth, leaping from the eighth place in 2018, with 29% of decision makers in the sector worrying about it. During the same period, investing in cybersecurity as a top concern has grown from 46% to 70%.
The survey also unveiled that confidence in the British economy has deteriorated since 2018. Back then, 29% thought the UK economy’s growth would slow down. Now, 58% believed it was the case. Moreover, in 2018 27% said they were less optimistic about the future than in the year before. That number increased to 54% in 2019.
Still, 59% stated that they were prepared for a no-deal Brexit with little or no dependency on a transition period. Of the rest, 29% said they had limited dependency on a transition period and 12% said they were significantly dependent.
Robina Barker Bennett, managing director and head of financial institutions at 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. That said, the responses to this survey show the sector’s resilience during difficult times and it is especially encouraging to see that firms plan to continue investing in the UK.
“In 2019, firms are arguably more dependent than ever on technology. With this rapid advancement, the risks from cybercrime are increasing, placing extra pressure on financial institutions to change the way they operate.”
The growing cybersecurity concerns were also reflected in research conducted by RegTech Analyst earlier this year. Not only did it reveal that the RegTech sector attracted investment worth almost $11bn since 2014, but it also revealed that the percentage of investment into cybersecurity solutions have jumped from 14.4% in 2014 to 42.6% in the first six months of 2019.
As RegTech Analyst reported this need can be attributed to the fact that as companies have become more digitized, the demand for strong digital defences have grown too.
Even though the investment in the sector has grown, companies are still making mistakes, as Diana Moldovan, UKI Cyber operations lead at Aviva, the insurance company, told FinTech Global as part of ournew podcast series Women Leaders in Finance. For instance, many businesses fail to find cybersecurity solutions that fit their need and often rather opt for general tools that are made for a broader audience.
“[There] are so many products on the market right now and it’s difficult to choose the best solution for you,” Moldovan explained. “And I think this is one area where businesses make mistakes because sometimes they choose a new technology because they have heard some other company implemented it and they help them with the risk they also have so they can see there will be good to implement the same technology. And this is the wrong way of doing it.”
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