Skip to Content

Financial Institutions Spend More on Cybersecurity

Financial institutions have been at the forefront of protecting their customers’ personal information, including names, addresses, phone numbers, account numbers, Social Security numbers, income, and credit histories. The Gramm-Leach-Bliley (GLB) Act, which became law in 1999, requires financial institutions to ensure the security and confidentiality of this type of data.

Over the last decade and a half, cyber-crime has become more prevalent and sophisticated, prompting financial institutions’ heightened response. In February 2016, the American Bankers Association Banking Journal reported that CEOs now rank concerns over cyber-related threats higher than those regarding fiscal crises, asset bubbles, and energy prices. The concern is legitimate. In 2014 alone, data breaches exposed over 85 million records in the United States.

In its 2015 Industry Drill Down Report, Raytheon-owned security vendor Websence claimed that the financial services sector faces security incidents a staggering 300 times more frequently than businesses in other industries.

Protecting customer information now comes at great cost. Forbes reported that JPMorgan Chase, Bank of America, Citibank, and Wells Fargo will spend roughly $1.5 billion on cybersecurity in 2016. JPMorgan Chase expects to spend $500 million on cybersecurity in 2016, double what it spent just two years ago. Notably, in 2015, Bank of America CEO Brian Moynihan told Bloomberg that cybersecurity is the only area in the bank that has no budget constraint.

According to the U.S. Financial Services:Cybersecurity Systems & Services Market – 2016-2020 report, the U.S. financial institutions cybersecurity market is the largest and fastest-growing private sector cybersecurity market. Its cumulative 2016-2020 size is forecasted to exceed $68 billion.

©2024 Carlton Fields, P.A. Carlton Fields practices law in California through Carlton Fields, LLP. Carlton Fields publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information and educational purposes only, and should not be relied on as if it were advice about a particular fact situation. The distribution of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship with Carlton Fields. This publication may not be quoted or referred to in any other publication or proceeding without the prior written consent of the firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our Contact Us form via the link below. The views set forth herein are the personal views of the author and do not necessarily reflect those of the firm. This site may contain hypertext links to information created and maintained by other entities. Carlton Fields does not control or guarantee the accuracy or completeness of this outside information, nor is the inclusion of a link to be intended as an endorsement of those outside sites.


The information on this website is presented as a service for our clients and Internet users and is not intended to be legal advice, nor should you consider it as such. Although we welcome your inquiries, please keep in mind that merely contacting us will not establish an attorney-client relationship between us. Consequently, you should not convey any confidential information to us until a formal attorney-client relationship has been established. Please remember that electronic correspondence on the internet is not secure and that you should not include sensitive or confidential information in messages. With that in mind, we look forward to hearing from you.