A new study reveals nearly half (44%) of Financial Services organisations that fully outsource their cybersecurity function believe their supplier is underperforming. The research, conducted by e2e-assure, a leading Threat Detection and Response provider, found underperforming cyber defence systems in 95 organisations surveyed, alarming given cyber security breach reports in the sector have tripled since 2021. E2e-assure's research echoes this distressing pattern, revealing that a substantial majority (77%) of Financial Services organisations have experienced a cyber attack.

Nearly half (45%) of the Financial Services organisations deploy a fully outsourced model for their cybersecurity operations, while 40% adopt a hybrid approach mixing in-house and outsourced capabilities, and only 12% run everything in-house. Top factors that steer Financial Services organisations towards outsourcing comprise the need to quickly respond to attacks (46%), gain more control over their environment (40%), and build improved resilience against threat actors (34%).

However, over a third (33%) of Financial Services organisations that outsource report a lack of confidence in their provider’s ability to act and respond to security incidents within 30 minutes of detection. This is further compounded by 28% saying their suppliers generate too many false positives - an issue typically seen with out-of-the-box setups not efficiently tuned to the environment they monitor. As a result, only 30% feel that they are resilient.

Findings also suggest hybrid teams perform stronger in the eyes of CISOs and cybersecurity decision-makers in terms of greater accountability with agreed SLAs and KPIs (61% vs 53%), team-centric client delivery (50% vs 33%), favourable SLA response times (66% vs 58%), and promptness in responding to threats within 30 minutes (89% vs 67%).

Despite such complexities, there remain clear expected service enhancements from providers, with almost half of those outsourcing (49%) signalling the need for flexible contracts adapting to the scope of the original contract signing. Another key frustration flagged by 40% is the recurring necessity to bolt on new service offerings to meet evolving security threats, which can hamper an organisation's agility and hinder their rapid response to emerging cyber threats.

Rob Demain, CEO of e2e-assure, said: "Our study sets out to reveal the observations from CISOs and cybersecurity decision-makers as to how their cybersecurity providers are performing, given criminals deploy increasingly advanced extortion techniques. With Financial Services organisations most commonly outsourcing their cybersecurity operations but almost half flagging underperformance, it's clear there is a need for a critical shift to ensure cyber defence providers meet the needs of organisations in 2024."

Interestingly, the majority (58%) of Financial Services organisations stated that they will either seek a hybrid solution to extend their current team when they next procure security operations, or seek specialist expertise, showing a readiness among cybersecurity professionals to delegate more responsibility. Five key themes emerged from the findings regarding cyber defence rejuvenation in 2024: providers will need to prove their value, security teams will cede more control to trusted providers, contracts need to be commercially flexible, service and tooling flexibility is a priority for organisations, and quality cyber defence needs to become more accessible to all.