The increasing availability of data in the finance industry provides firms with the opportunity to gain deeper insights into market trends, customer behaviour, and exposure to risk. With the help of advanced analytics and machine learning, finance firms can use this data to improve their decision-making processes, increase efficiency, and ultimately drive growth.
However, the same data opportunity also presents a threat. As more data is collected, there is an increased risk of data breaches and cyberattacks such as ransomware, which can result in financial loss and reputational damage. When it comes to the financial services sector, banks have been subjected to attacks in recent years because of their increased reliance on the cloud and therefore third-party suppliers.
Additionally, there are compliance risks relating to the violation of data privacy regulations, such as GDPR or CCPA, which can lead to significant fines and legal liabilities. Therefore, while data presents a significant opportunity for finance firms, it must be managed responsibly and adequately funded to avoid potential threats. When paired with archaic infrastructure, it’s a matter of good fortune that we haven’t experienced even more breaches. There is an additional issue to consider which is that any injection of funding isn’t guaranteed to be directed towards cybersecurity resiliency. Therefore, regulators are realising that they can't rely on individual businesses to make the effort and rules need to be enforced.
Regulatory Adaptation: addressing the big data challenge
The big data challenge can take form through the tightening of regulations. For example, Financial Conduit Authority and Bank of England are looking at the Digital Operational Resilience Act (DORA) which aims to elevate operational resilienc ..
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