No one doubts the critical importance of cybersecurity measures for financial institutions. Customers rely on banks to protect and secure their hard-earned money, finances, and investments. And they expect banks to keep their information and capital secure and accessible only by parties with legitimate and authorized business purposes. But more and more hackers target financial institutions with cyber attacks designed to steal money and customer data for nefarious purposes.
With cyber attacks happening so frequently and becoming more destructive in recent years, banks continue to take steps to improve their cybersecurity measures so that they can better protect customers. Many large financial institutions have already invested quite a bit of money into cybersecurity infrastructure and employee training on evolving cybersecurity threats. And they continually pledge to do more.
Examples of Big Banks Making Large, Direct Investments in Cybersecurity
Recent examples demonstrate just how much money the banking industry will spend to support efforts that enhance customer security and improve transparency:
- HSBC Budgets $1 Billion for Cyber Security Improvements. SC Magazine recently reported that Douglas Flint, the chairman of HSBC Holdings, announced at the beginning of August that the banking giant HSBC will take steps to improve cyber security over the next two years. The investment responds to an attack the bank suffered earlier this year when a number of HSBC Finance Corporation mortgage accounts were hacked. The hack exposed important customer identifying information, such as names, social security numbers, and account details. HSBC has earmarked more than $1 billion dollars for information technology and cybersecurity improvements in an effort to streamline operations and also to reduce the size of retail banking operations by 20 percent by shifting customers over to online-only banking operations.
- JP Morgan Chase Doubles Cybersecurity Spending. An article in Computer Business Review reports that JPMorgan Chase plans to double its cybersecurity budget next year in response to a 2013 cyberattack that leaked data for more than 83 million JPMorgan Chase customers. While the company had announced that it plans to double its cybersecurity spending over a period of five years, it seems that the company has accelerated their proposed timeline. In 2014, the company spent $250 million on cybersecurity; it plans to spend no less than $500 million by the close of 2015.
Banks Also Indirectly Invest in Cybersecurity
Banks are making significant investments in cybersecurity in indirect ways, as well. For instance, many banks have invested in promising cybersecurity startup companies in the hopes that the startup will develop viable and useful tools for combating cyberattacks and enhancing cybersecurity. An article in the Financial Times noted that banks—including the venture capital arms of Citibank and Wells-Fargo—have made considerable investments into cybersecurity startups focused on various aspects of cybersecurity technology.