Finance firms shun investment in new tech in favour of essentials - survey

Most financial services firms are failing to invest in new technologies this year, instead focusing on IT essentials such as compliance and security, according to a survey from LogLogic.

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Finance firms shun investment in new tech in favour of essentials - survey

Editorial

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The poll of 82 banks, investment houses and insurance companies in North America, Emea and Asia Pacific found that 58% plan to devote budget only to essential information technology needs.

Meanwhile, only half plan to even evaluate new technologies for potential use in the future. Cloud computing in particular is still viewed with some scepticism in the industry; 34% of respondents say it is not strategic to their company and another 26% claim their firms are risk-averse to the technology.

According to one IT security manager interviewed by LogLogic: "A significant pitfall to cloud computing is the lack of control. It creates a massive security risk."

The importance of this concern is highlighted by the fact that every firm questioned cites information security as a top priority, with most admitting that their systems are regularly attacked. A quarter of respondents are subject to attacks monthly, 22% weekly and 24% daily, although another 22% say their systems do not experience attacks.

Compliance also continues to dominate the thinking of financial services firms. More than 60% of those surveyed note that they are either somewhat or moderately worried about new regulations being introduced to the industry. The majority of firms say their compliance efforts are focused primarily on Sarbanes-Oxley and Payment Card Industry Data Security Standards.

Guy Churchward, CEO, LogLogic, says: "Many industries are proceeding cautiously as we emerge from the recent economic downturn, not just financial services. The imperative to drive efficiencies and get the most out of your existing infrastructure is alive and well. Companies today are looking to maximise their IT investments - focusing on critical functions such as improving their overall security posture and meeting stringent compliance demands."

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Comments: (3)

A Finextra member 

This is often because the bank's customer's top driver of adoption, cross-sell or loyalty IS security. Who says that new technology can't have a significant impact on security? (Certainly not our research of consumers, fraud trends or innovative new bank technologies!) Javelin's Customer-Driven Architecture defines how all major new technology should be implemented by financial institutions over the next decade, and security is integral to the model's ability to drive overall provider ROI. 

To get the highest ROI roll out new technology holistically, with security as one vital and integrated part of the foundation. 

 

 

A Finextra member 

Always love it when a vendor based survey finds that the no. 1 issue is one their prouct solves - their website says "Gain visibility and control" and "real time threat detection" so I assume they have detected that cloud computing is a threat to selling in-house security tools!

Their quote of one IT manager is that "the significant pitfall of cloud computing is the lack of control" - thank goodness LogLogic allows "visibility and control".

I am all for surveys delivering the desired result - but no need to bash a particular delivery method just to make a selling point!

As a cloud based banking system vendor ourselves we take comfort that if 34% say it is not strategic then 66% might think otherwise, and if 26% are averse to it then 74% are not feeling that bad about it.

Clearly we just need to focus on the rest....

A Finextra member 

Always interesting to see how companies try to make a good living based on the many security weaknesses in today's mainstream IT infrastructures ... just buy our product or services, and everything will be fine ...

But it seems that some FSI firms are now stepping back and do take a look at the big picture. It seems they now do realize that it is very hard to retrofit security (or availability, or data integrity, or scalability ...) into an infrastructure that was primarily designed for using low cost components and nothing else.

Whether server farms are located onsite or at some service provider does not make much difference from a technology point of view, the basic problems remain the same. Vendors of addon products or services can sell to cloud operators too ...

But there are significant differences when looking at the situation from an operational or business point of view. Questions around trust and control as well as the understanding of the underlying business processes suddenly become important ... 

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