According to research, banks and credit unions consider threats from data breaches and fraud to be the most significant obstacles to their digital banking strategy.
In the survey by American Banker, it was found that approximately 90% of the 200 banking professionals who participated considered cybersecurity threats to be a considerable obstacle to their institutions’ digital banking strategies. Bankers identified security-related functions as two of the top three technologies that are crucial for enabling digital banking.
According to the survey:
- 55% of bankers emphasized the significance of enhanced security and fraud mitigation in achieving their goals
- 50% highlighted the criticality of digital identity verification.
These security measures far outweighed the importance rankings of other digital services such as:
- Virtual assistants or chatbots (30%)
- Rapid application development (21%)
Banks have increasingly collaborated with fintechs in 2023, largely driven by cybersecurity and fraud prevention concerns. According to bankers, the primary areas where they are considering partnering with fintechs are peer-to-peer payments or money transfers, as well as secure ID verification.
The survey reveals:
- 45% of respondents are inclined to seek assistance from fintechs in these areas.
Banking Sector Experiencing Major Data Breaches
For years, the issue of cybersecurity has been at the forefront of digital bankers’ concerns, with the industry experiencing numerous major data breaches. In 2024 alone, several banks have fallen victim to a string of cyberattacks that were made possible by exploiting a vulnerability in the file transfer service MoveIt.
These recent supply chain attacks present an especially grave threat to banks, as the security of their data relies on the risk management practices of third-party entities. Since this data contains sensitive consumer information, regulators mandate that banks thoroughly assess the security systems of their partners to avoid potential liability in the event of a breach.
2024 Banking Budgets Significantly Allocated Towards Data Breach Prevention
According to the study conducted by American Banker, it was revealed that banks are anticipating a significant portion of their budget in 2024 to be allocated towards the prevention of data breaches.
Furthermore, the survey discovered that:
- Over 60% of financial services firms have intentions to boost their cybersecurity expenditure by a minimum of 10% in 2024.
SentryBay Is Best Defence Against Banking Data Breaches
“SentryBay’s patented technology can significantly bolster a bank’s digital security strategy by offering fraud mitigation solutions designed to safeguard sensitive customer data and transactions, directly addressing the challenges highlighted in the American Banker survey,” said Brent Agar, VP Strategic Partnerships, SentryBay. “By integrating SentryBay’s solutions, banks can enhance their cybersecurity posture, reduce the risk of data breaches, and meet regulatory requirements more effectively, ensuring a safer digital banking experience for their customers.”
