Increasing Cyberattack Prevalence Driving Demand for Security Solutions Among BFSI Companies from Maria Yardena's blog

With the burgeoning demand for a personalized banking experience, surging requirement for mitigating the various risks associated with conventional technologies, and the soaring need for the real-time analysis of large volumes of data, banks and financial institutions are rapidly moving their core operations and applications to the cloud network. Moreover, the ability of the cloud to offer enhanced operational control of the platforms and reduce the capital expenditure is also driving its popularity among banks and financial organizations.

As the adoption of cloud solutions massively increases the chances of cyberattacks, since the data is stored remotely, the rapid shift of banks and financial organizations toward cloud operations is fueling the demand for security technologies among companies operating in the banking, financial services, and insurance (BFSI) market. Hence, in order to manage and control security operations over the cloud network, these enterprises are rapidly adopting cloud-based security solutions. Moreover, the financial services industry has always been highly vulnerable to cyberattacks and a major target area for cybercriminals, on account of the generation of the large volumes of unstructured data in the industry.

Additionally, with rapid technological advancements such as the digitization of financial operations and the use of online banking, the prevalence of data breaches is surging. These breaches are causing massive losses to the organizations operating in the industry. For instance, the U.S. witnessed the highest prevalence of data breaches in 2019. Furthermore, these breaches caused losses of $8.19 million to companies operating in the country. Due to this reason, banks and other financial organizations are adopting security solutions, which is, in turn, predicted to fuel the market at a CAGR of 16.9% during 2020–2030 (forecast period).

According to the estimates of the market research company, P&S Intelligence, the market revenue will rise from $31.3 billion in 2019 to $175.1 billion by 2030. Insurance companies and banks are the biggest end users of security solutions. Between them, the adoption of these solutions was found to be higher in banks in 2019. Furthermore, banks will also use these solutions extensively in the coming years, owing to the growing incidence of cyberattacks and the increasing demand for complying with the strict regulations being implemented for the banking industry.

Geographically, the BFSI security market is expected to exhibit the fastest growth in the Asia-Pacific (APAC) region in the upcoming years. This is attributed to the adoption of cloud-based technologies, increasing number of banks, rising incidence of cyberattacks, and implementation of cybersecurity mandates in various regional countries. For instance, as per the China Banking Regulatory Commission Article 40, in China, all commercial banks are required to adopt appropriate warning and risk monitoring systems to mitigate business risks.

Hence, it can be safely said that banks and other financial institutions all over the world will use security solutions extensively in the forthcoming years, primarily because of the growing incidence of cyberattacks, on account of the increasing adoption of cloud-based solutions by them.