Financial Institutions Beefing Up Cybersecurity Amid Rising Threats: Moody’s

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A recent survey conducted by Moody’s, a global rating agency, involving 240 banks, highlights a growing focus on cybersecurity within the financial sector. The report, titled ‘2023 Cyber Survey – Escalating cyber threats drive up budgets as banks fortify defenses,’ underscores the increasing investments made by banks worldwide in response to the surge in cyber incidents.

Financial institutions, being custodians of client wealth and managing sensitive personal data, are becoming prime targets for cyber threats. Moody’s findings reveal a consistent upward trend in cybersecurity investments across banks of all sizes and credit strengths since 2019. Notably, firms in the US and Asia-Pacific regions are leading in investment compared to their counterparts in Europe, the Middle East, and Africa (EMEA).

In the face of evolving threats, banks are adopting sophisticated cyber defense strategies. The survey indicates that approximately 80 percent of respondents still rely on on-premises infrastructure, although there’s a gradual shift towards cloud services and software providers with robust defense capabilities. Large banks, in particular, aim to reduce on-premises infrastructure from 65 percent to 55 percent within the coming year. Notably, North American banks are ahead in migrating to cloud infrastructure compared to their EMEA counterparts.

Moreover, the survey highlights that about three-quarters of respondent banks have standalone cyber insurance coverage, with North America leading at 97 percent, compared to 55 percent in Asia Pacific. The coverage includes various incidents such as ransom payments, legal settlements, regulatory fines, and reputational damage.

Moody’s survey also underscores the heightened attention senior officials are giving to cybersecurity within financial institutions, demonstrating stronger governance over this critical issue.