Study: 50% of Financial Firms Unsure About Data Security

data privacy

The security of backed-up and stored data is among the chief concerns of financial firms around the country, according to a recent survey of 200 financial organizations in 45 countries conducted by data storage firm Continuity.

More than 50% of firms surveyed said there were not confident about their storage and backup security, while another quarter said they were significantly concerned.

More alarmingly, more than 59% of the firms surveyed said they weren’t confident their organization’s data could recover from a ransomware attack.

But despite these concerns, 68% said threat detection and incident response were part of their organizations’ vulnerability management programs, and 46% said they have done a thorough job identifying security baselines.

On the other hand, 21% report having no security baselines in place. Changing priorities, organizational silos and a lack of knowledge and skilled personnel also were mentioned among the largest barriers to effective security.

Attacks on Lending Firms Increased Last Year

Another study, conducted by LexisNexis Risk Solutions, found a marked increase in the average number of monthly fraud attacks on financial services firms and lenders between 2020 and 2021.

For examples, in banks generating more than $10 million in yearly revenue, the number of fraud attacks rose from 1,977 in 2020 to 2,320 last year. The cost of these attacks is growing as well. For every dollar lost to fraud in 2021 in the last year, it cost financial and lending companies $4, compared to $3.64 in 2020 and $3.25 in 2019.

The study also found that fraud losses happen at each phase of the customer journey, from the opening of a new account to the distribution of funds from a bank or investment account or loan.

The distribution phase is the most vulnerable, according to 43% of respondents.

To learn more about how financial institutions can think differently about protecting their data, download the Real-Time Payments Tracker, a collaboration between PYMNTS and The Clearing House.