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Survey Shows 47% Increase in Information Security Spending

11% of banking and capital markets surveyed rarely or never present security topics to the board or top governing body. Is this acceptable?

According to the results of Ernst & Young's 16th annual Global Information Security Survey, 48% report a lack of skilled resources is one of the main obstacles in confronting cyber threats.

In an interview, Chip Tsantes, principal in the Financial Services Office of Ernst & Young, says this shortage of skill is making firms more conscious about directing skilled resources, the problems they attack, where they outsource, and focus on the tasks with the most benefit for the organization.

"We're seeing willingness to outsource more commodity services, and pay for good talent inside," says Tsantes. When asked if companies are looking to increase investment in tools and services he says, "There are few tools that come and don't require team to work on them. I see clients that buy tools and use only 10% of its capabilities, or become shelf-ware. You need to go in with eyes wide open. Sometimes there's a disconnect between the resources required to keep a tool operating the way it should."

The survey, conducted between June and July 2013 polled 1,900 respondents across 64 countries and 25 industry sectors. 361 respondents, or 19%, represent the banking and capital markets (BCM) sector.

Compared to other industries financial services is in the lead in terms of cyber security and awareness. According to EY, information security transformation is a priority area within the BCM industry as organizations are looking to improve and bette position their information security programs to evolve with the changing risk surface, including cyber risks, data leakage, emerging technologies and security event and incident management.

Tsantes adds that after 3-4 years of flat or modest growth, EY has seen respondents in financial services get bigger increases in security budgets, which he attributes to threat and vulnerability management. The survey found the BCM industry continues to increase information security spend with 47% reporting an increase of at least 5% over last year and 61% stating they plan on additional increases in the coming year.

Furthermore, BCM organizations are starting to allocate more budget to the areas of security improvement and expansion and security innovation as 75% of respondents recognize the function is not fully effective and have improvement efforts underway, reports EY. Only 9% of the organizations surveyed have advanced functionality in regards to threat intelligence, vulnerability identification, detection and response while 36% report having an informal program or none at all.

Consulting the Board

The trend continues that cyber security are more important and gaining attention throughout the organization, especially at the top of the house, explains Tsantes. "I've been speaking with more boards of directors and committees this year than in the last 5 years." This trend suggests more visibility and awareness from the leadership level, which supports strategies for further investment in security programs.

But one thing troubles him: 11% of respondents said cyber security wasn't an issue at board level, and rarely or never present information security topics to the senior audience. "I worry about those organizations." He adds, then, sounding hopeful, "maybe they just didn't understand the question." 68% of the respondents said they present information security topics to the board or top governing body on a quarterly or monthly basis. Becca Lipman is Senior Editor for Wall Street & Technology. She writes in-depth news articles with a focus on big data and compliance in the capital markets. She regularly meets with information technology leaders and innovators and writes about cloud computing, datacenters, ... View Full Bio

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Becca L
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Becca L,
User Rank: Author
11/1/2013 | 3:32:42 PM
re: Survey Shows 47% Increase in Information Security Spending
Well I'll be... Thanks. WS&T, always two steps ahead.
Becca L
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Becca L,
User Rank: Author
11/1/2013 | 3:31:49 PM
re: Survey Shows 47% Increase in Information Security Spending
At least I hear it's better than Farmville. Growing virtual corn can be soothing, no doubt, but candy crush is a whole different kind of stress relief.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
11/1/2013 | 3:22:13 PM
re: Survey Shows 47% Increase in Information Security Spending
Most financial firms are going to have some IT security talent within their organizations that the board can learn from. Financial institutions are also increasingly leveraging outside partners to help with their security, and those partners also have a good amount of expertise that they can share
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
11/1/2013 | 3:19:53 PM
re: Survey Shows 47% Increase in Information Security Spending
Being on the board of directors is tough. I guess everyone needs to take their mind off things sometimes...
Greg MacSweeney
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Greg MacSweeney,
User Rank: Apprentice
10/31/2013 | 7:02:55 PM
re: Survey Shows 47% Increase in Information Security Spending
We just published this a few days ago:

http://www.wallstreetandtech.c...
Becca L
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Becca L,
User Rank: Author
10/31/2013 | 6:08:29 PM
re: Survey Shows 47% Increase in Information Security Spending
How do board members know what questions to ask? Many of them aren't trained in IT or security. Do we need new board members or a board member boot camp?
Becca L
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Becca L,
User Rank: Author
10/31/2013 | 6:07:00 PM
re: Survey Shows 47% Increase in Information Security Spending
It's going to be interesting to see how this picks up over the next year. A lot of malware goes unnoticed by anyone but the IT teams, but as Kathy says, as soon as a senior exec's mobile is notably hacked there will be an uproar and more attention given to this issue.
Becca L
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Becca L,
User Rank: Author
10/31/2013 | 6:04:29 PM
re: Survey Shows 47% Increase in Information Security Spending
Don't be fooled. They're playing Candy Crush
Becca L
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Becca L,
User Rank: Author
10/31/2013 | 6:02:42 PM
re: Survey Shows 47% Increase in Information Security Spending
I'm reminded of our government... one of the issues we often hear is
that the voting members aren't savvy enough - whether it be in
technology, environmental science, biology, etc - to vote on the legislation in front of them in an intelligent way. Sure, they learn what they can, but are they really competent enough to make these influential decisions? Along the same logic, are Board members, trained in other areas, really in the right position to ingest this information and make decisions? It's a tough call, and because it's all so specialized I can see why board members might want to leave the issue in "more capable hands."
Greg MacSweeney
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Greg MacSweeney,
User Rank: Apprentice
10/31/2013 | 2:03:05 PM
re: Survey Shows 47% Increase in Information Security Spending
Cyber issues should be a board level discussion at every FI. Board member need to know what safeguards are in place and they need to ask tough questions. If they don't, they aren't doing their job.
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