Cybersecurity biggest barrier to financial innovation
07 Apr 2017
- 71% of financial institutions say cybersecurity is the biggest risk associated with partnering with FinTech firms (of which: Germany 64%, Hong Kong + Singapore 70%, New York, 78%).
- 71% also believe greater visibility of FinTech firms’ cybersecurity controls would improve partnering capability.
- 75% acknowledge the need to improve partnering capabilities to stand any chance of accelerating their digital innovation.
Seventy one percent of the world’s largest banks and asset management firms say cybersecurity is the biggest risk associated with working with FinTech firms, according to new research from international law firm, Simmons & Simmons.
The study, conducted by Simmons & Simmons, shows how many large financial institutions are struggling to innovate fast enough.
The figures prove that data security is a hurdle that needs to be overcome in order for banks to feel confident about partnering with FinTech firms; 60% also believe that the security of the environment in which new digital solutions are being tested is another area of concern.
Alex Brown, head of TMT at Simmons & Simmons says: “There is no doubt that established financial institutions need to look at new forms of technology and partnering solutions if they are to escape from the chains of their legacy IT systems and adopt innovative technology solutions. At the same time, though, not only are they encumbered by their legacy systems, the increasing weight of data protection and financial regulation make data sharing with third parties or adopting innovative technology solutions steadily more difficult. However, there is a real economic imperative to share data with partners to help provide better services to customers. Those that don’t find ways to innovate will be left behind.”
While it is agreed that successful collaboration with FinTech firms is essential for innovation, most large institutions (75%) admit they are poorly equipped to address the factors prohibiting progress.
Hyperfinance, the firm’s flagship research programme, investigates what large banks and asset managers need to do to succeed in accelerating their digital innovation and overcome the challenges they face. The firm surveyed 200 senior level respondents (30% at c-suite level) across five financial centres.
Click here for more information | Download the full report here.