The Global Cybersecurity in Banking Market Projected to Grow at a CAGR of 14.4% and Generating a Revenue of $281,987.5 Million by 2032Download Sample Reports Overview
The global cybersecurity in banking market is predicted to be valued at $281,987.5 million by 2032, surging from $74,300.0 million in 2022, at a CAGR of 14.4%.
Impact Analysis of COVID-19 on the Cybersecurity in Banking Market
According to Check Point’s Software Technologies 2021 Cyber Trends Report, the global cyberattacks increased by 29%, as hackers continue to exploit the COVID-19 pandemic and shift to remote work. Ransomware attacks surged 93% in the last 6 months, fueled by innovation in an attack technique called Triple Extortion.
Financial institutions (FIs), such as banks and insurance providers, are reporting significantly increased threat levels from COVID-related cybercrime according to research by BAE Systems Applied Intelligence, the cyber and intelligence arm of BAE Systems. A humongous rise in new pandemic-related threats, alongside a rise in challenges caused by enforced work from home guidance has left open and insecure gaps in financial institutional networks. This is attributed due to the financial losses and cost cutting on budget related to cybersecurity in the financial institution. The pandemic has led to an upsurge in the financial losses due to increase online activity of the customers. Moreover, IT security teams are feeling further pressure from decreased budgets and team redundancies. On an average, according to The COVID CRIME INDEX 2021 REPORT by BAE Systems Applied Intelligence, budgets within IT security, cyber crime, fraud and risk departments have been slashed by a quarter (26%) and 40 per cent have had to cut back on critical IT security technology spend. Alongside this, more than a third (36%) have had to reduce the number of people in IT security teams over the past 12 months.
Global Cybersecurity in Banking Market Analysis
The financial services sector, just like many others, is undergoing enormous change as mobile and Internet banking take over. Consumers use banking mobile applications routinely as they apply for loans, insurance, and other services online. Digital transformation into the banking sector provides various advantages such as increased reach & accessibility to customers, reduced operational costs, better cover over information and improved service quality. However, transitioning the banking sector digitally will require utilization of emerging technologies such as artificial intelligence (AI), machine learning (ML), Internet-of-Things (IoT), 5G, and others.). Thus, it will be become more significant for banks and financial institutions to boost the cybersecurity of their products and services in order to provide protection from hackers or attackers.
Cybersecurity skills shortage places multiple challenges and repercussions for the banking sector including the occurrence of security breaches and subsequent loss of money. Therefore, the skills gap acts as a restrain for C-level executives and hence it is increasingly becoming a board-level priority. According to the International Information System Security Certification Consortium, or (ISC)²,2021 Cyber Workforce Report, the global cybersecurity workforce needs to grow 65% to effectively defend organizations’ critical assets. According to the Digital Banking Report 2020 by OpenText, 72% of banking executives believe there is a moderate or significant skills gap threat. However this issue can be resolved by conducting proper training for the employees and making them aware about the implementing cybersecurity in the banking products and services.
Banks and financial institutions are leveraging emerging technologies such as AI, IoT and ML for the further enhancements of the banking products and services. For instance, introduction of AI in banking can facilitate advanced predictive analytics and automated decision-making by analyzing and processing large amounts of data. AI is also used to detect and address cyberthreats and cyber risk such as malicious files, suspicious IP addresses, and others. Furthermore, blockchain and Distributed Ledger Technology (DLT) have led to the rise of crypto assets. Conventional financial services businesses, such as Visa, Mastercard, and PayPal have started to embrace crypto assets. Current advancements in technology is witnessing the emergence of digital wallets, digital assets, decentralized finance (DeFi), and non-fungible tokens (NFTs). Whereas few countries are working on launching of ‘central bank digital currency (CBDC)’. Thus, rapid advancements in the technology are anticipated to create vast opportunities for cybersecurity in banking sector.
Global Cybersecurity in Banking Market, Segmentation
The cybersecurity in banking market is segmented on the basis of deployment, bank size, technology, and region.
The deployment model segment is classified into public cloud, private cloud, data center, and managed services. Among these, the public cloud sub-segment is anticipated to dominate the market during the forecast period. Banking industry is mostly migrating their data on public cloud as it offers various benefits as compared to private cloud such as infinite scalability, agility and speed to the market, infrastructure cost efficiency, security and resilience, future proofing, and others. Therefore, the public cloud deployment is most preferred as compared to private cloud for cybersecurity in the banking sector.
The bank size segment is further classified into small, medium, and large. Among these, the large sub-segment is projected to witness the highest CAGR during the forecast years, as these institutions are spending heavily on the cybersecurity of their products and services. For instance, large institutions, such as Bank of America in 2021 stated that it spends over $1 billion per year on cybersecurity. These factors are projected to drive the segment growth in the upcoming years as well.
The technology segment is further classified into data protection, governance, risk & compliance, email security & awareness, cloud security, network security, identity & access management, security consulting, web security, IoT/OT, endpoint security, application security, and others. Among these, the cloud security sub-segment is predicted to have the fastest growth during the forecast period. Cloud computing is flourishing within financial services and other industries. A typical banking and financial institution’s computing environment already includes on-premise systems, off-premise systems, and multiple clouds. In the upcoming years, cloud computing in financial services is expected to grow steadily. Most of the top notch banks have already started adopting cloud technology. For instance, Standard Chartered aims to become a cloud-first bank by 2025, with all of its core systems powered entirely by cloud. Banking giants like JP Morgan, Barclays, or UBS already turned to cloud to make working-from-everywhere the new norm. Therefore, the demand for cloud security is projected to increase in the future for cybersecurity in the banking sector.
The cybersecurity in banking market in Asia-Pacific is projected to show the fastest growth during the forecast period. Asia-Pacific is known for its vibrant banking industry and countries in the region are moving towards open banking. Singapore, Hong Kong, and Australia have been at the forefront of open banking implementation. The second phase of the Singapore Financial Data Exchange (SGFinDex) was launched in November 2021, enabling individuals to access their financial information via applications held across a range of government agencies and financial institutions. As interconnectedness between market participants is essential, transaction safety, security, financial inclusion, and innovation will require high standards of interoperability. In addition, Open APIs, as compared to private ones, play a vital role in the implementation of open banking by facilitating connections between banks and other stakeholders, and could signal the level of interoperability. Thus, the need for financial inclusion and innovation will widen the scope of cybersecurity in the Asia-Pacific banking sector.
Key Players in the Global Cybersecurity in banking Market
Some of the leading players for cybersecurity in banking market players are JP Morgan Chase & Co. Bank of America, Wells Fargo, BNP Paribas, CITI Group Inc, Bank of China, Barclays, HSBC, Standard Chartered, Agricultural Bank of China, and Mitsubishi UFJ Financial Group.