Financial institutions battle rising cyber threats with unified security

By Puja Sharma

New research from the IBM and Palo Alto Networks reveals that businesses, particularly in financial services, are struggling with cybersecurity complexity, managing an average of 83 security solutions from 29 vendors. With financial institutions increasingly reliant on digital channels, fragmented security infrastructures are becoming a liability—52% of surveyed executives admit that solution fragmentation is hampering their ability to respond to cyber threats effectively.

The report, Capturing the Cybersecurity Dividend: How Security Platforms Generate Business Value, finds that 75% of organisations that have adopted a platform-based approach to security agree that tighter integration across cybersecurity, hybrid cloud, AI, and other technology platforms is crucial. Banks and financial institutions, already under regulatory pressure to strengthen resilience, can no longer afford inefficiencies stemming from multiple disconnected security solutions.

Cybersecurity Complexity: A Costly Concern for Financial Institutions

Increased digital interconnectedness and AI-driven cyber threats have made cybersecurity a critical issue for financial organisations, where trust and compliance are non-negotiable. The report estimates that security fragmentation and complexity cost organisations an average of 5% of their annual revenue. For a bank with $20 billion in annual revenue, that equates to a staggering $1 billion drain on resources.

Beyond direct financial losses, fragmented security measures can lead to data breaches, failed digital transformation initiatives, AI project delays, and even reputational damage—factors that weigh heavily on financial institutions seeking to maintain customer confidence.

“Organisations face the dual challenge of strengthening their security posture while controlling costs,” said Mark Hughes, Global Managing Partner for Cybersecurity Services at IBM. “Financial institutions, in particular, need to balance innovation, compliance, and cybersecurity investments to ensure long-term resilience.”

“We have seen first-hand the benefits of platformisation in security,” added Karim Temsamani, President of Next Generation Security at Palo Alto Networks. “A unified approach not only reduces complexity but also enhances financial performance, operational efficiency, and overall security effectiveness. This is not just about managing today’s threats—it’s about securing the financial industry for the future.”

The Financial Advantage of Security Platformisation

For financial institutions, security is more than an IT concern—it is a fundamental pillar of business continuity and customer trust. The study finds that consolidating security tools into a unified platform can lead to nearly four times the return on investment (ROI) compared to traditional fragmented security models.

AI-driven security platforms also provide an edge by enhancing threat detection and automated response capabilities. As 90% of surveyed executives plan to scale, optimise, or innovate with AI in the next two years, integrating AI into security operations can improve real-time fraud detection, compliance automation, and risk assessment. For example, financial firms can use AI-powered security platforms to:

• Detect and block sophisticated fraud attempts in real time.
• Automate compliance checks to align with evolving regulations such as PSD2 and the Reserve Bank of India’s cybersecurity mandates.
• Strengthen risk management frameworks by proactively identifying vulnerabilities.

Cyber Resilience in Financial Services: Steps to Success

Financial institutions seeking to embrace security platformisation should consider the following steps:

1. Audit security partnerships. Evaluate current security vendors and solutions, and prioritise those that integrate seamlessly into a unified framework. Fragmented solutions should be phased out in favour of a cohesive strategy.
2. Simulate real-world threats. Conduct cybersecurity stress tests and incident response drills to assess the effectiveness of platform-based security strategies.
3. Invest in ongoing cybersecurity training. Financial institutions must equip their teams with the skills to navigate evolving cyber risks. IBM and Palo Alto Networks now offer a joint Cyber Range experience in Cambridge, Massachusetts, where businesses can engage in immersive cybersecurity simulations to strengthen their defences.

As financial services continue their rapid digital transformation, the need for an integrated, AI-powered security platform has never been more urgent. By embracing platformisation, financial institutions can enhance security, drive operational efficiencies, and safeguard customer trust in an increasingly volatile cyber landscape.

Key Findings:

The study provides critical insights into why financial institutions must rethink their cybersecurity strategies:

• Around 52% of executives say complexity is the biggest barrier to effective cybersecurity operations.
• Over 80% face pressure to reduce security costs, while 41% say security fragmentation has inflated procurement expenses.
• 4 out of 5 organisations without platform-based security say they struggle to manage the sheer volume of cyber threats.
• About 80% of platform adopters report full visibility into potential vulnerabilities and threats.
• Organisations that embrace platformisation see a reduction of 72 days in mean time to identify (MTTI) and 84 days in mean time to contain (MTTC) security incidents.