The BFSI sector is highly dependent on IT infrastructure for delivering services, such as mobile, online, and core banking. Identity fraud is a major concern when performing financial transactions through online banking portals and insurance apps. With consistent technological advancements across BFSI channels, banks and other financial services institutions are facing data breaches & identity frauds at an unprecedented rate. For instance, according to the VMware Carbon Black Threat Data report in May 2020, cyberattacks against banks and financial institutions increased by 238% globally between February 2020 and April 2020 amidst the COVID-19 crisis. In addition, ransomware attacks on the financial sector were 9x from the beginning of February to the end of April 2020.
Cyberattacks have become a major challenge for the banking sector, due to which banks and financial institutions are investing heavily in incorporating Cybersecurity-as-a-Service solutions to protect customers and digital assets against data breaches and fraud. For instance, in July 2021, Tata Communications (India) launched its IZO Financial Cloud, a customized community cloud platform designed to adhere to the strict data privacy, protection compliance, and security standards established by Indian regulators for the BFSI sector. This platform helps create an open financial environment that gives BFSI and FinTech companies the groundwork to support cutting-edge digital services.
The demand for Cybersecurity-as-a-Service solutions witnessed a growth in the banking sector to improve performance, scalability, security, and agility and deliver faster services, thus promoting the market’s growth.
Some of the recent developments in this space are as follows:
- February 2023, Okta, Inc. (U.S.) partnered with Plaid (U.S.), a financial services company, to help thousands of banks and financial institutions adopt OAuth and APIs for exchanging data with third parties. This partnership provides the financial services ecosystem a more secure way to accelerate their open finance initiatives and deliver seamless connectivity for potentially millions of consumers.
Growing Adoption of Cloud Security Solutions Among Businesses
In today's modern connected world, the trend toward cloud deployments is on the rise, and leading industry experts predict this trend to continue in the coming years. Organizations are moving their workloads to the cloud to gain more agility, reduce time to market, and lower expenses.
Additionally, advanced technologies, such as the IoT and Industry 4.0, have contributed to the increase in the data stored on the cloud. With the emergence of the BYOD and WFH trends and increasing internet penetration across new markets, organizations are progressively inclined to use cloud services, driving the need for cloud security. Thus, cloud security is vital in protecting organizations transitioning to the cloud against cyberattacks.
However, organizations’ transition to cloud servers has resulted in a surge in cyberattacks. For instance, cloud-based attacks rose by 630% between January and April 2020. Furthermore, in 2020, 39% of healthcare organizations suffered ransomware attacks in the cloud. Thus, cloud security has emerged as an effective way for organizations to minimize security issues. Some of the security issues in the Cloud are as follows:
- Unauthorized access to application functionality or data
- Exposed cloud services due to misconfiguration
- Hijacking of user accounts because of poor encryption and identity management
- Data leakage from insecure APIs or other infrastructure endpoints
- Distributed denial of service (DDoS) attacks due to poorly managed resources
Organizations are now opting to deploy cloud-level security monitoring for both public and private clouds to facilitate vulnerability detection for IoT devices. Thus, the benefits of cloud security-as-a-service have encouraged their wide-scale adoption, which is driving the growth of cybersecurity as a services market
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