In fact, according to the data from the company, internet users around the globe produced twice as much data in 2021 as they did in 2019, with an expectation these numbers will “increase exponentially” in the coming decade. In order to address shortcomings related to global data security, mitigate user risk and develop a roadmap to stronger regulatory compliance, Thomson Reuters issued its sixth Regulatory Intelligence report on Fintech, Regtech and the Role of Compliance in 2022.
“Digital transformation has been a fundamental enabler for financial services firms. It is hard to underestimate the opportunities that these firms can derive from the implementation of technological solutions; however, maximizing the potential of these tech solutions can present challenges,” according to the Thomson Reuters report.
The firm identified several specific areas of interest with respect to data security in the financial services sector. In addition to broad considerations related to the data itself, it added “operational resilience,” managing risks associated with third parties and identifying what specialized skills, and who possesses them, are required to navigate the relevant technological terrain as topics of note.
“Digital solutions, which at times may operate critical business functions, must be resilient to any disruption. Also, risk and compliance applications must be able to accommodate any shift to alternative working patterns,” according to the report.
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One way companies are accomplishing stronger resilience and compliance is through a mix of in-house regtech solutions and external initiatives. In 2017, 41% of the firms surveyed in the report were using a combination of those two entities; that figure jumped to 51% in 2021. In contrast, only 5% of the firms included in the report developed “all regtech solutions in-house.”
In either case, there are still a number of obstacles standing in the way of firms achieving their regtech goals. Per the report, as many as 15% of respondents reported not having the needed budget for fintech solutions.
“At some firms there appears to be a persistent lack of investment in technological solutions. This manifests itself in various ways for example, through continuing failure to address poor IT infrastructure or through holding back investment in the kinds of in-house skills and budget required to deploy fintech or regtech solutions,” it adds.
In addition to Thomson Reuters, Cisco released a separate report as 2021 was expiring highlighting many of the same cyber security concerns. As such, it also identified several strategies to combat those concerns. Per Cisco, the five most important considerations with respect to the overall health of a given firm’s security are:
- “proactively refreshing outdated technology”
- “well-integrated security technologies”
- “timely incident response”
- “prompt disaster recovery”
- "investing in accurate threat detection capabilities”
“With the shift to hybrid work, organizations are grappling with the increased complexity of securing a distributed workforce,” said Shailaja Shankar, SVP and GM of Cisco’s Security Business Group, in a statement. “At the same time, they are also dealing with limited staff and budget constraints, so it’s critical for organizations to invest in innovative technologies and security practices.”
