Market Trends of BFSI Security Industry
This section covers the major market trends shaping the BFSI Security Market according to our research experts:
Rise in Cyber Data Breaches Drives the Market Growth
- The BFSI sector is one of the critical infrastructure segments that suffers several data breaches and cyber-attacks, owing to the large customer base that the industry serves and the financial information that is at stake. Financial service institutions are four times more susceptible to cyberattacks than other industries, which is expected to drive the demand for security solutions.
- Machine learning, artificial intelligence, and blockchain have all seen rapid adoption in several BFSI sectors, posing serious threats to data security. Due to the prevalence of cyber-attacks and theft, the development in digitalization in this industry also necessitates data protection, which raises the demand for BFSI security. Additionally, as banks, other financial institutions, and enterprises switch to digitalized business operations, the adoption and use of security solutions have grown significantly. Cybersecurity is a service provided by the BFSI security industry and is anticipated to drive market expansion.
- The most significant major global data breach in the financial industry between 2008 and last year was discovered in 2019 in the United States at First American Financial Corporation. This data breach exposed 885 million financial and personal details. The banking industry is one of the most vulnerable to cyber assaults that result in data leaks.
- Sears Holdings, the parent company of Kmart, revealed that Kmart's store payment systems were infected with malware. JPMorgan was a victim of one of the biggest bank breaches in history, where hackers accessed the financial information of around 3,500 customers. With such instances, the companies are bound to increase cybersecurity, which drives the BFSI security market.
- The increasing number of banks, financial institutions, and other financing firms switching toward digitalized business operations and the need to adopt and implement security solutions and services have driven market growth.
- Growing economies provide considerable opportunities for BFSI safety to expand and broaden its offerings. Additionally, the rise in the internet option in the BFSI sector and the use of digitalized systems through the internet is anticipated to offer growth possibilities. The rising penetration of the internet in developing regions, which is stimulating the adoption of connected devices that enable convenient and secure financial transactions, is encouraging the BFSI security market to implement threat management systems for securing payment gateways.
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North America is Expected to Register the Largest Market
- North America, particularly the United States, is one of the largest markets for BFSI security owing to the region's majorly dependence on digital payments. The region is also expected to witness healthy growth due to multiple government initiatives in the country demanding better security solutions.
- The country's high dependence on online payments and recovering banking infrastructure urged banks to implement a strong threat management system to prevent financial data breaches. Increasing the need to protect information from hackers has propelled the adoption of BFSI security solutions in the region.
- Further, mobile banking fraud is on the rise. With customers increasingly using mobile banking applications and payment systems, it is expected to become more prevalent than traditional credit card fraud and POS attacks. Regulators in North America are closely monitoring the shift toward mobile payments, especially those enabled by third-party or FinTech platforms.
- Digitalization has encouraged financial institutions to implement threat management systems to protect their digital assets and customer data. Sensitive customer information includes credit or debit card details, bank account details, and payment information. USA has observed a significant adoption of cybersecurity platforms across BFSI companies. Many leading financial institutions in the country, such as Citi Bank, JP Morgan Chase, and the Bank of America, have implemented advanced cybersecurity systems to offer 24/7 protection against cybercriminals.
- Flagstar Bank, one of the major financial organizations in the United States, had a significant data breach in the previous year, exposing the Social Security information of about 1.5 million clients. The breach is the second attack on the Michigan-based online banking giant. Such incidents in this region propel the growth of the BFSI security market.
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