As threats grow more sophisticated and regulations more demanding, resilience is no longer optional, says Sean Tilley, Senior Director Sales EMEA, 11:11 Systems, which offers back-up and disaster recovery services.
The UK financial sector is undergoing a period of accelerated transformation and growing complexity. Digital innovation is redefining how institutions operate, compete, and serve customers, but it is also expanding the attack surface and introducing new vulnerabilities. At the same time, cyber threats are growing in both frequency and sophistication, with adversaries relentlessly targeting the sector’s most valuable assets: data and services.
With vast troves of personal, transactional, and corporate information at stake, financial services remain the most attractive target for cybercriminals worldwide. In the UK alone, the National Cyber Security Centre (NCSC) reports that nearly half of financial and insurance businesses experienced a cyber-attack in the past year. In short, disruption is a matter of when, not if.
Fragmented defences, rising costs
Today’s threat landscape is as diverse as it is relentless. Ransomware-as-a-Service (RaaS) has lowered the barrier to entry for attackers, while supply chain intrusions exploit trusted third parties to gain a foothold in otherwise secure environments. Social engineering campaigns are becoming more targeted and persuasive, and insider risks, whether malicious or accidental, remain a constant concern. Looking ahead, the rise of AI will only intensify these challenges. The first case of AI-powered ransomware, PromptLock, has already been observed, while AI-enhanced phishing campaigns are increasing in both volume and sophistication. According to the NCSC, 93 per cent of UK businesses reported being affected by phishing in the past year, making it the most prevalent form of cybercrime.
The challenge is compounded by the fragmented, often legacy nature of many firms’ security infrastructures. Disconnected tools and siloed systems create blind spots that make early detection and coordinated response far more difficult. Limited resources add further strain: not every firm can staff a 24/7 Security Operations Centre, and many still rely on backup and disaster recovery solutions that cannot withstand modern ransomware, which can encrypt or even erase backup files.
The financial consequences of downtime are severe. Losses can cost an average of £500,000 per hour – in some cases exceeding £1m – and the reputational impact often lingers long after systems are restored. Customers expect uninterrupted access to banking, payments, and trading platforms — even minor disruptions can trigger frustration, lost revenue, and erosion of trust. Resilience is therefore more than a technical safeguard; it is fundamental to business continuity and customer confidence. Ensuring high availability, rapid failover, and near-zero data loss requires investment in enterprise-grade infrastructure, built on zero-trust principles, with real-time replication and regular disaster recovery testing.
Regulatory complexity: moving target
The regulatory landscape is evolving as quickly as the threat environment. The FCA’s Operational Resilience Policy requires firms to define critical business services and establish impact tolerances. The EU’s Digital Operational Resilience Act (DORA) introduces comprehensive ICT risk management requirements, including incident reporting and oversight of third-party providers. GDPR continues to enforce stringent data protection obligations, while ISO 27001 offers a framework for information security governance.
These overlapping frameworks create a complex compliance environment. Institutions must juggle multiple reporting requirements, maintain audit readiness, and exercise rigorous third-party risk management — all while ensuring uninterrupted service delivery. DORA and the Operational Resilience Policy, in particular, aim to strengthen resilience across financial ecosystems and root out single points of failure. Regulators are also intensifying scrutiny of cloud service providers amid growing concerns over systemic concentration risk. Third-party oversight is notoriously difficult, and frequently cited by financial institutions as a top area of concern.
For many institutions, achieving compliance is almost as demanding as defending against cyber attacks themselves. Audits increasingly focus on resilience: not only whether systems are secure, but whether they can withstand disruption and recover quickly. Meeting these expectations requires operational and cultural change, which are costly, resource-intensive processes. Strategic advisory services, business impact analyses, and scenario-based resilience testing can accelerate this transition by bridging technology, governance, and regulatory requirements.
Lessons from the front line
The risks are far from theoretical. In late 2023, a leading UK bank suffered a ransomware attack that disrupted operations for 36 hours. The breach, originating via a third-party vendor, bypassed perimeter defences and encrypted core banking systems. Legacy backups failed, leaving millions of customers unable to access services. The financial loss was significant, but the long-term reputational damage was greater, attracting regulatory scrutiny and eroding customer confidence.
This incident exposed weaknesses in supply chain oversight, backup resilience, and incident response coordination. It also highlighted the importance of aligning resilience strategies with regulatory expectations in advance of disruption, not after. To avoid a similar scenario, financial institutions should treat third-party vendors as critical risk vectors, enforcing rigorous security assessments, continuous monitoring, and contractual safeguards. Immutable backups using write-once, read-many (WORM) storage are essential to ensure data cannot be altered or deleted by ransomware, enabling secure recovery without capitulating to extortion. Automated disaster recovery orchestration can dramatically reduce downtime while helping firms remain within FCA and DORA impact tolerance thresholds. Just as crucial is a well-tested incident response plan, complete with clear internal and external communication protocols.
Resilience as strategy
Operational resilience has moved firmly onto the boardroom agenda. The risks are too great and the regulatory bar too high for institutions to rely on reactive defence alone. Instead, resilience must be woven into the fabric of business strategy, uniting cybersecurity, compliance, availability, and transformation under a single framework.
This requires more than incremental upgrades. Firms must rethink legacy infrastructure, consolidate fragmented systems, and ensure resilience investments deliver measurable outcomes. It also means preparing for the worst-case scenario through tested recovery plans, clear communication protocols, and alignment with evolving regulations. Centralised monitoring dashboards can play a vital role here, providing real-time visibility into security posture, system health, backup status, and compliance metrics, empowering proactive decision-making and faster incident response. For organisations seeking to modernise securely while meeting regulatory obligations, trusted partners can provide clarity and control. With the right support, institutions can innovate confidently, adapt quickly, and maintain customer trust even in the face of disruption.
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