The number of data breaches reported by UK financial services firms to the Financial Conduct Authority (FCA) increased 480 per cent in 2018, to 145 up from just 25 in 2017, according to research from London-headquartered law firm RPC.

Targeting investment banks

The retail banking sector saw the largest percentage increase in the number of data breach reports, rising to 25 in 2018 from only one in 2017. The firms says this could raise concerns about the increasing number of cyber criminals targeting bank accounts. RPC says that wholesale financial markets firms, such as investment banks, reported the most data breaches to the FCA in 2018, reporting 34 times, up from just three in 2017. Cyber criminals could be targeting investment banks in the belief that their security systems are less sophisticated than retail banks. Confidential data held by investment banks on areas such as M&A can be used for insider trading.Other sectors within financial services that saw large increases in 2018 data breach reports include: insurers (33, up from seven), consumer retail lending (21, up from four) and retail investments (11, up from none). June 2018, the first month after the introduction of the general data protection regulation, saw the highest monthly total of data breach reports, with 20 data breaches reported by financial services firms.

Frequent basis

Richard Breavington, partner at RPC and head of their cyber insurance and breach response team, says ‘banks remain a top target for cyber criminals. The figures suggest that the banks are suffering data breaches on a frequent basis. The increase in reports, however, does show that the financial services industry is now taking cyber security more seriously than ever. The financial and reputational fallout from a data breach can be serious for a business of any size. They must be ready to defend against, and respond to, breaches as efficiently as possible.’ RPC says that insurance against data breaches is one of the fastest growing areas of the insurance industry.