Banks See Billion-Dollar Cyber Costs Soaring Even Higher in 2021

Yalman Onaran (Bloomberg) -- Big banks and other financial firms predict the cost of warding off cyber criminals will keep climbing in 2021 as they work to secure digital financial services popularized by the pandemic.

Cybersecurity topped the list of expected budget increases in a survey of technology spending conducted by Deloitte & Touche LLP, with 64% of executives at financial firms around the globe forecasting a rise. Part of the survey results was made available to Bloomberg News in advance of the December release.

Banks, brokers, insurers and others have ramped up spending on cybersecurity for at least four years as services move online and attacks escalate. Cyber spending jumped 15% this year, according to an earlier Deloitte survey, equating to almost $1 billion for each of the largest U.S. banks. The pandemic contributed to the increase, forcing firms to bolster defenses as staff worked from home and as more customers embraced online products or services.

“We’re still in the midst of a large transformation in financial services due to digitization, moving to the cloud, remote workplaces,” said Mark Nicholson, head of financial services cyber risk at Deloitte. “Only when the transformation is complete will the spending on it stop increasing as it will become a more steady operational expense.”

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Spending on cloud computing and storage was the second item in Deloitte’s survey, with 54% of respondents saying their cloud budgets will see an increase next year. A majority also projected rising expenditure on data privacy. The survey was carried out in July and August. About 800 senior executives took part.