Aging cybersecurity technology puts financial service companies at risk

Financial service organizations (FSOs) need to elevate their cyber defenses for the AI-driven threats they face today.

In brief

• Financial service organizations face some of the most complex and ongoing cyber threats.
• AI-driven cybercrime and risk in real time is bringing threats that many FSO cyber defenses weren’t designed to manage.
• Accelerating defenses with cloud-native protection could be a crucial step.

Cyber leaders in financial services organizations operate in one of the highest stakes, most highly regulated and targeted sectors in global business today. The nature of financial services – handling vast amounts of sensitive consumer and institutional data, the facilitation of high-value transactions and the pivotal role financial services organizations play in economic stability – have long made the sector a primary target of global cyber criminals.

But with the advent of AI-driven cyber-crime and the escalation of real time risk from anywhere in the world at any time, financial services organizations are now dealing with a global threat environment that many current cybersecurity defense systems just weren’t designed to manage. It’s been two decades since the first security information and event management systems (SIEMs) were introduced and while some upgrades have happened in that time, many financial services organizations are still managing systems that are increasingly outdated, rely on rule-based detection and demand intensive, time-consuming resources.

In a cloud-native, automated risk environment these legacy systems, once considered the backbone of security operations centers (SOCs), now struggle to cope with both the volume and nature of cyber threats as well as the exponential growth and complexity of data that organizations now manage. The implications are clear: for financial cyber leaders this isn’t just a technology challenge, it’s a fundamental business risk with far-reaching implications.

For any cyber leader working under these changing conditions, here are the critical issues and strategies to know:

Cyber risk and compliance challenges impacting financial services organizations

Cyber leaders in financial services are facing pressure from every direction. Increasing regulatory scrutiny, complex cyber risk, and a mandate to accelerate digital transformation while keeping costs under control. And the challenge is real. According to the EY Global Financial Crime Survey, 76% of financial services organizations believe cyber risks are the primary operational threat – but because of the limitations of aging SIEMs to manage that threat, they’re also an increasing obstacle to crucial compliance.

Global privacy requirements of GDPR, imposing strict governance protocols for how data is stored, accessed and protected, and NYDFS cybersecurity regulations for robust frameworks and rapid breach notifications, all put both financial service organizations and their SIEMs under enormous pressure. For those with legacy platforms, real-time monitoring isn’t possible, meaning large scale log ingestion and significant manual effort to meet compliance standards and report fully. The lack of automation means SOC teams are manually investigating, triaging and correlating threats – all of which introduces delays, inefficiencies in audit process, and the increased risk of more scrutiny and heavy penalties.

Building a business case for leadership

Despite escalating risks, leadership may not always be on the same timeline for technological transformation that is required. Aligning leadership and securing buy-in requires a structured, step by step business-driven approach:

1. Build the business case: Aging SIEMs present not just a technology challenge but a much broader and more serious reputational risk. Support this with a cost-benefit analysis, comparing TCO (total cost of ownership) of legacy SIEMs in terms of maintenance, false positives and labor costs with the benefits of AI-driven, automated and cloud-ready next gen platforms.
2. Secure cross-functional buy-in: Engaging risk officers, compliance teams and business unit leads to more closely aligned security objectives with business priorities. This will help negate implementation concerns across the organization and stress competitive advantage.
3. Develop phased implementation: Conduct a gap analysis of current SIEM capabilities and needs and prioritize high-risk implementation first: fraud detection and cloud security. Many next-gen SIEMs are designed for easy integration, allowing a hybrid operation and evolution over time.
4. Address regulatory compliance early: Engage regulators and auditors early to ensure alignment with evolving frameworks.
5. Ensure future-proof scalability: Ensure the chosen next-gen SIEM supports multi-cloud environments and can scale with increasing data volumes.
6. Establish continuous measurement and governance: Define KPIs such as mean time to detect (MTTD) and mean time to respond (MTTR) and regularly review SIEM performance in terms of cybersecurity, efficiency and compliance to prove ROI to leadership.