Financial firms that use old-style ‘legacy’ technology will act as a barrier in the battle against cyber criminals, professionals have warned.
Digital crime has been a hot topic over recent weeks after organisations around the world, including the NHS, were brought to a standstill when criminals hacked their digital systems.
The failure of the NHS to update its technology was largely blamed for its temporary collapse because it left the organisation exposed to cyber attacks.
Meanwhile, a government paper released last month found that half of financial firms have been victim to a cyber attack in the past 12 months.
According to a new report, published this week, 92 per cent of financial professionals said so-called ‘legacy’ software will hinder the fight against financial crime over the next two years.
Legacy technology systems, it said, prevent firms from responding effectively to the underlying risks of financial crime.
There has been a raft of changes in the investment platform industry as firms upgrade their systems, but this paper should come as a warning to those companies that still use old systems.
According to the report, which questioned 200 professionals across the banking and asset management industry, 44 per cent said the biggest risk facing their business were the changing lines of attack used by criminals.
Dean Curtis, UK managing director of LexisNexis Risk Solutions, said financial institutions are struggling to keep up with the evolving tactics used by criminals, adding: “It can feel as if they are fighting twenty first century criminals with twentieth century tools.
“Keeping pace with criminal activity and understanding where technology has advantages over humans, in areas such as machine learning, will determine the future of many industries, none more so than financial crime prevention."
The Financial Conduct Authority is currently working with firms to help them adopt technology that fights financial crime through its regulatory Sandbox.
But Mr Curtis said more needs to be done, suggesting practitioners adopt a more “strategic view” of technology to make sure it is effective in operation.
“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.”
Tony Catt, compliance consultant at TC Compliance, said: "Client data is the most important asset of any business, therefore the protection of client data should be the highest priority."
He said firms should make sure their systems have regular security updates, which he added was doubly important for platforms providing services for many people.
"It is never good for a provider’s website to be unavailable or slow, as there is plenty of competition around for business."