116 cyber incident reports received by the Financial Conduct Authority in 2021, a fifth involving ransomware 

Picus Security, the pioneer of Breach and Attack Simulation (BAS), today released a report revealing a large rise in cyber incidents reported to the UK’s Financial Conduct Authority (FCA). The report, based on FCA data obtained via a Freedom of Information (FOI) request, reveals that:

• The FCA received 116 reports of material cyber security incidents in 2021, up from 76 in 2020 (an increase of 52%).
• 65% of cyber incidents reported in 2021 (75) were due to cyber-attacks.
• Approximately one third of incident reports (37) contained notifications where the confidentiality of company or personal data may have been compromised or breached.
• One in five incidents reported to the FCA in 2021 involved ransomware.
• 21 cyber incidents were reported to the FCA in March 2021 – the most submitted in any month that year and coinciding with the disclosure of critical vulnerabilities in Microsoft Exchange Server.

“Financial services firms are amongst the best prepared and most highly capable organisations at detecting and responding to cyber incidents,” says Dr Suleyman Ozarslan, Picus Security co-founder and VP of Picus Labs. “Yet, despite investing heavily in security and data protection, it’s clear that many continue to experience challenges in these areas.

“The large rise in cyber incidents reported to the FCA in 2021 is a concerning trend and should serve as an important reminder to all firms about the need to make ongoing improvements in all areas of security. This is necessary to not only mitigate the risks posed by external threats but also those which arise due to IT failures and human error.”

Digital transformation in the financial services sector, including widespread adoption of remote working, means that many firms over the last few years have had to adjust their security and data protection practices. On top of this, they have had to contend with being a target of Advanced Persistent Threats groups and ransomware operators, as well as manage the risks of critical vulnerabilities in widely used systems such as Microsoft Exchange Server.

“Defending financial institutions against all the threats they face remains a tough challenge, made even harder by the growing attack surface,” Ozarslan added. “Only by validating security capabilities on a continuous basis can firms hope to measure their threat readiness more accurately and swiftly close the gaps needed to take their operational resilience to the next level.”