Research from Optalysys, a company developing secure computing through the acceleration of Fully Homomorphic Encryption (FHE) technology, has found that growth is being held back at UK financial services firms due to concerns over data security.
A survey of more than 250 IT decision-makers working in the financial services sector (conducted by Obsurvant and commissioned by Optalysys) revealed that 70% believe mounting data security concerns stifle their firm’s growth. The findings also revealed that 39% cannot collaborate with external organizations due to data security constraints, while 45% reported challenges managing or accessing sensitive data within their organization.
These findings come as the UK government unveiled its AI Action Plan, which seeks to deploy AI across industries to increase growth. New financial regulations, such as the EU’s Digital Operational Resilience Act (DORA), have also come into force. The regulation mandates that businesses in the sector must ensure they can withstand, respond to, and recover from ICT-related disruptions. However, research by Optalysys has found that only 33% of respondents believe their organization is fully prepared to meet DORA’s stringent requirements.
Widely regarded as one of the jewels in the crown of the UK economy, contributing north of £200 billion in 2023 and the UK’s fourth largest industry, high costs associated with data security measures are cited by 52% as the most significant challenge facing the sector. Data security has seen substantial investment in recent years, yet 44% of organizations reported they have still experienced data breaches or instances of unauthorized access.
“The financial services sector is the lifeblood of the UK economy, yet businesses are being limited by outdated approaches to data security,” Optalysys CEO Dr. Nick New said. “Simply put, businesses harness the real power of AI or can’t unlock the full value of their data because they are too busy trying to keep it safe. This is a massive missed opportunity, and it’s holding the entire sector back.”
New said that with economic growth at the top of the government’s agenda, the UK has the opportunity to take a leading position by adopting technology to drive growth across vital sectors like financial services. The study’s findings highlight the need for emerging privacy-enhancing technologies like Fully Homomorphic Encryption (FHE) to address the challenges decision-makers within financial services firms are facing.
“To alleviate data security concerns, especially with sensitive customer and financial data, we need technology that allows encrypted data to be processed without it needing to be decrypted,” New said. “This will mean that organizations across the entire financial sector can talk to each other and collaborate in a secure and efficient environment, changing how businesses approach secure data processing and collaboration.”