Banking and investment management professionals think that the biggest threat of financial crime now stems from cyberspace, according to new research.
A survey of nearly 200 senior professionals working in retail banks, investment banks and asset management firms, conducted by information provider LexisNexis Risk Solutions, shows that 44 per cent currently perceive so-called evolving criminal methodologies, like cyber crime, to be the single biggest financial crime risk for their businesses.
A total of 41 per cent say that such methodologies will represent the biggest risk over the coming 12 months, but 92 per cent said that they are concerned that their organisation’s legacy technology is “a barrier to fighting financial crime over the next one to two years”.
And a staggering 87 per cent said that their business isn’t able to enhance their technology fast enough to counter evolving criminal methods.
“Criminal methodologies are constantly evolving and financial institutions are struggling to keep up with their changing tactics when implementing financial crime defences. For those tasked with combatting financial crime it can feel as if they are fighting twenty first century criminals with twentieth century tools,” said Dean Curtis, managing director at LexisNexis Risk Solutions for the UK.
“Our report shows financial crime professionals do not believe the industry is doing enough to leverage the advantages of technology to fight financial crime.”
The report found that the problem is being compounded by the regulatory environment and the associated costs. Increased regulations require investment in new technologies and 60 per cent of respondents to the survey cited this as a root cause of cost increases. Since 2015, 63 per cent of financial institutions say their financial crime compliance costs have increased, whilst just 2 per cent say they have decreased.
The risk of cyber crime moved into sharp focus after tens of thousands of individuals across almost 100 countries were affected by a massive cyber-attack earlier this month. That attack, known as “Wannacry”, was believed to be one of the largest of its kind. It affected hospitals, companies, universities and governments, including the NHS, where close to 50 health trusts were believed to have been affected.
Last month the British Chambers of Commerce warned that while large businesses are more likely to become the victim of an attack than their smaller counterparts, all types of companies need to ramp up security defences.
Three in four UK businesses have reported a digital skills shortage among their employees, according to a separate BCC report, despite 84 per cent of firms admitting that digital and IT skills are more important to their enterprise now than two years ago.
Jameson White is a millennial attorney, law professor, entrepreneur, writer, and speaker on privacy, cybersecurity, A.I., AR/VR, blockchain, and digital monies. He has written for many outlets, and contributed to cybersecurity and technology publications.