Cyber crime top of list of threats cited by financial bosses

● Study flags need for ‘more strategic view of technology’ to help tackle issue

Increasingly sophisticated criminal activity such as cyber attacks and political upheaval are the biggest risks feared by banks over the next year, according to a report published today.

Information specialist Lexisnexis Risk Solutions, which surveyed 200 top professionals across banking and asset management, said more action is required to help the industry tackle cyber crime after this and other evolving criminal techniques were seen as the largest threat.

Those dangers were cited by 44 per cent of respondents, increasing to 67 per cent when looking purely at global investment bankers.

Geopolitical changes, such as tighter sanctions imposed by the US, came in second in terms of perceived threats, chosen by 37 per cent. This was up from the 10 per cent seen in the inaugural report in 2015, rising due to fears of poorer information-sharing after the UK leaves Europe as well as uncertainty regarding an “unpredictable” US administration.

But the report also found that 30 per cent of those surveyed felt Brexit would help fight criminals, while about half that level believed it would have a negative impact.

Additionally, the study found that senior financial crime professionals believe changes in sanctions arrangements are a greater concern than Brexit.

Dean Curtis, UK managing director at Lexisnexis Risk Solutions, said the Trump administration “may potentially continue to utilise sanctions in favour of costly military action.

“Financial institutions have found managing evolving sanctions policies and the introduction of new targeted sanctions tools, such as the sectoral sanction regime, to be a significant challenge, making them understandably concerned about the need to manage and update risk policies, process and controls.”

Meanwhile, 92 per cent were concerned old technology at organisations could make it harder to fight financial crime over the next two years.

Curtis added: “For those tasked with combatting financial crime, it can feel as if they are fighting 21st century criminals with 20th century tools. Our report shows financial crime professionals do not believe the industry is doing enough to leverage the advantages of technology to fight financial crime.”

He acknowledged work being done by the Financial Conduct Authority, but added: “Practitioners must adopt a more strategic view of technology to enhance operational effectiveness as regulation has rapidly evolved in the last 15 years and simply increasing staff numbers is not a sustainable approach.

“Keeping pace with criminal activity and understanding where technology has advantages over humans… will determine the future of many industries, none more so than financial crime prevention.”

The threat was underscored by the recent ransomware cyber attack, which hit more than 300,000 computers .