Quarterly financial services tech risk radar

In the financial services industry, technology risk is becoming an increasing challenge for firms. As with all change in the industry, most is driven by the regulator. However, with cyber and digital fraud on the rise, firms now need to address how they can protect their business and customers from such risks.

Top five technology risks in financial services

1. Cyber risk management

Cyber risk remains a key focus of regulatory and industry bodies as the cybersecurity paradigm evolves with technological innovations and regulatory and consumer expectations. Boards and executives are seeking closer assurance over cyber risk management. The key is improved and focused cyber risk management and cyber resiliency through effective threat intelligence and risk management, cyber awareness and training, as well as industry collaboration and sharing of information.

2. Operational and cyber resilience

Regulators in the UK and EU are focusing closely on the operational and cyber resiliency of firms in financial services to protect market integrity and consumer confidence. Financial services organisations have built operational resilience governance and control frameworks, but the current focus is on refining the identification of important business service and impact tolerances, effective testing and industry collaboration, and information sharing to strengthen overall resiliency and recovery capabilities.

3. Management information and reporting

Lack of quality, targeted and complete management information is hindering effective executive and board oversight over key technology risks and IT performance. Boards, executives and regulators demand quality information and metrics on cyber risk, IT performance, operations and incidents.

4. Technology-enabled changes

Change and project-related incidents are key causes of operational disruption and failure. Poor project risk management and oversight over third parties are significant factors in IT change delays and failures. Effective programme management frameworks can help improve project discipline, risk management and third-party oversight.

5. Data governance and management

Organisations need to ensure they can rely on their data for complete and accurate information to support the business, keep data safe and comply with relevant legislation. A lack of effective data governance, risk management and asset management can lead to data breaches. Data analytics and Artificial Intelligence (AI) are increasing in commercial value for businesses, with related security and reliability considerations dependent on sound data governance practices.

If you would like to discuss these risks in further detail, please contact our experts below.