Financial firms face rising AI cyber risk, survey says

Gigamon has published survey findings on cyber risk in the financial services sector, showing that 98% of breached institutions reported a material impact.

The results suggest the sector is adopting artificial intelligence in security operations faster than the wider market, while also facing a rise in AI-linked attacks. The survey found that 66% of financial services organisations said AI was already initiating security functions without human intervention, compared with 53% across industries overall.

At the same time, 91% said they had implemented AI-powered tools to strengthen data security. Yet 77%reported a breach involving AI, while 54% said they had seen an increase in AI-powered social engineering attacks such as phishing and smishing.

Another 47% said attacks targeting AI and large language model deployments had increased. Among organisations that had suffered a breach, reported consequences included financial losses, higher cyber insurance premiums, data loss and regulatory penalties.

Visibility concerns

The findings suggest many institutions are struggling to keep pace with the complexity of their security environments. Although 94% said they had invested in new security technologies to improve detection and visibility, 42% said it was taking longer to detect breaches.

More than half (52%) identified fragmented security tools as their biggest challenge in securing hybrid cloud infrastructure. A further 95% said security depended on complete visibility across all data in motion.

Malcolm Kelly, Managing Director, CISO and Head of Technology Risk, EMEA, at SMBC Group, described the tension between innovation and risk control.

"AI is forcing financial institutions to accelerate innovation and risk management at the same time. The opportunity is significant, but so is the complexity. Financial institutions need visibility into how data, applications and AI systems interact across hybrid cloud environments so they can identify exposure early and respond with confidence," Kelly said.

The survey points to broad concern that adding more tools has not necessarily made defences simpler or faster. Instead, security teams appear to be contending with a growing number of systems, encrypted traffic and cloud-based assets that are harder to monitor consistently.

Quantum threat

Encrypted traffic and the prospect of quantum computing also featured strongly in the responses. The research found that 36% of financial services organisations identified encrypted traffic as their greatest breach vulnerability.

Concern about so-called harvest now, decrypt later attacks was even more widespread, with 88% calling it a major issue. These attacks involve collecting encrypted data now for decryption later, when more advanced computing methods become available.

As firms prepare for that possibility, 93% of financial services leaders said visibility into encrypted traffic was critical to post-quantum cryptography readiness. That was the highest response among all industries covered by the study.

Data storage choices are also shifting. More than half of respondents (58%) said public cloud environments represented their greatest source of breach risk, while 62% said data lakes were the most secure environment for critical data.

Almost all respondents (94%) said network-derived telemetry was critical to securing data lake environments. Gigamon argued that this form of monitoring, which includes metadata, packets and flows, can help security teams build a clearer picture of how risks emerge across hybrid cloud systems.

Philip D. Harris, IDC Research Director, Governance, Risk and Compliance Solutions, said the issue extended beyond frontline security operations.

"The convergence of AI adoption, regulatory scrutiny and post-quantum planning is reshaping how financial institutions think about cyber risk. Visibility into data in motion is becoming a foundational requirement not only for security operations, but also for governance, compliance and operational resilience," Harris said.

Business impact

The figures underline how directly cyber incidents are affecting business performance in financial services, an industry shaped by strict regulation and heavy reliance on customer trust. The near-universal share of breached respondents reporting material damage suggests successful attacks are causing consequences well beyond technical disruption.

Gigamon said 94%  of financial services leaders viewed deep observability as foundational to securing their AI deployments. It positioned fuller visibility across network traffic as a way to connect fragmented security signals and improve investigations, control validation and risk assessment.

Shane Buckley, President and CEO at Gigamon, said institutions needed a clearer understanding of data movement across modern environments.

"Financial services organizations are investing heavily in cybersecurity, but investment alone does not create control. The findings make it clear that visibility has become foundational to modern cybersecurity. Without a complete understanding of how data moves across hybrid cloud environments, financial services organizations cannot validate security outcomes, demonstrate compliance, or confidently manage risk," Buckley said.

The annual survey covered financial services security and IT leaders in Australia, France, Germany, Singapore, the United Kingdom and the United States. The sector findings were based on responses from 139 participants.