Data security concerns hold back growth for UK financial services firms
Research from Optalysys, a company enabling the future of secure computing through the acceleration of Fully Homomorphic Encryption (FHE) technology, has found that growth is being held back at UK financial services firms due to concerns over data security.
A survey of over 250 IT decision-makers (ITDMs) working in the financial services sector, conducted by Obsurvant and commissioned by Optalysys, revealed that 70% of ITDMs believe their firm’s growth is being stifled by mounting data security concerns. The findings also revealed that over a third (39%) are unable to collaborate with external organisations due to data security constraints, while nearly half (45%) reported challenges managing or accessing sensitive data within their own organisation.
These findings come as the government unveiled its AI Action Plan, seeking to deploy AI across industries to increase growth and new financial regulation has come into force, with the EU’s Digital Operational Resilience Act (DORA). The regulation mandates that businesses in the sector need to ensure they can withstand, respond to, and recover from ICT-related disruptions. However, research by Optalysys has found that only 33% of respondents believe their organisation is fully prepared to meet DORA’s stringent requirements.
Widely regarded as one of the jewels in the crown of the UK economy, contributing over £200bn in 2023 and the UK’s fourth largest industry, high costs associated with data security measures are cited by 52% of respondents as the most significant challenge facing the sector. Data security has seen substantial investment in recent years, yet 44% of organisations reported they have still experienced data breaches or instances of unauthorised access.
Dr Nick New, CEO of Optalysys, said: “The financial services sector is the lifeblood of the UK economy, yet businesses are being limited by outdated approaches to data security. Simply put, businesses harness the real power of AI or can’t unlock the full value of their data because they are too busy trying to keep it safe. This is a massive missed opportunity and it’s holding the entire sector back.
“With economic growth at the top of the government’s agenda, the UK has the opportunity to take a leading position by adopting technology to drive growth across vital sectors like financial services. Our findings highlight the need for emerging privacy-enhancing technologies like Fully Homomorphic Encryption (FHE) to address the challenges ITDMS within financial services firms are facing. To alleviate data security concerns, especially with sensitive customer and financial data, we need technology that allows encrypted data to be processed without it needing to be decrypted. This will mean that organisations across the entire financial sector can talk to each other and collaborate in a secure and efficient environment, changing how businesses approach secure data processing and collaboration.”