In today’s modern connected world, industries are focused on accelerating the pace of their digital transformation using digital technologies, such as the Internet of Things (IoT). However, the use of digital technologies is making these industries increasingly vulnerable to cyberattacks. The proliferation of connected devices has also increased the scope for hackers and cybercriminals to launch cyberattacks. The applications of IoT technology are increasing rapidly, and as a result, challenges related to IoT data security & privacy are expected to increase in the coming years. According to industry experts, by 2020, 40 billion IoT devices are expected to be in operation, and by 2023, spending on IoT cybersecurity solutions is expected to reach USD 6 billion globally. Also, 93% of enterprises are expected to adopt IoT technology by the end of 2019.
While IoT devices offer new functionalities that improve business efficiencies, the technology makes organizations more vulnerable to cybersecurity risks. Cybersecurity threats are expected to grow exponentially with the increasing adoption of connected devices. Thus, the growing adoption of disruptive digital technologies is expected to boost the demand for cybersecurity solutions & services, driving the growth of the global cybersecurity market.
Growing Significance of Cybersecurity Solutions in the Banking Sector
The BFSI sector is highly dependent on IT infrastructure for delivering services, such as mobile, online, and core banking. Identity fraud is a major concern when performing financial transactions through online banking portals and insurance apps. With consistent technological advancements across BFSI channels, banks and other financial services institutions are facing data breaches & identity frauds at an unprecedented rate. For instance, according to the VMware Carbon Black Threat Data report in May 2020, cyberattacks against banks and financial institutions increased by 238% globally between February 2020 and April 2020 amidst the COVID-19 crisis. Also, ransomware attacks against the financial sector were 9x from the beginning of February to the end of April 2020.
Cyber-attacks have become a major challenge for the banking sector, due to which banks and financial institutions are investing heavily in incorporating cybersecurity services to protect customers and digital assets against data breaches and fraud. For instance, in July 2021, Tata Communications (India) launched its IZOTM Financial Cloud, a customized community cloud platform designed to adhere to the strict data privacy, protection compliance, and security standards established by Indian regulators for the BFSI industry. This platform helps create an open financial environment that gives BFSI and FinTech’s the groundwork to support cutting-edge digital services.
Consequently, the demand for cybersecurity solutions witnessed a growth in the banking sector to improve performance, scalability, security, and agility and deliver faster services, thus, promoting this market’s growth.
Furthermore, cybersecurity offers insurance providers an opportunity to recognize customer behavior that may lead to fraudulent claims, thus, helping companies save time and expenses and secure real-time applications resulting in lower insurance premiums for customers.
At present, banks and financial institutions need to offer a convenient and secure user experience to gain customers’ confidence and enable seamless services. Hence, the rising demand for cybersecurity platforms and the resultant increase in investments made by banking organizations drive the growth of the cybersecurity solutions market.
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