Life and pensions industry must invest more in security warns Logica
• Only 7 per cent of IT spending dedicated to data security
• Few measurement and accrediation processes in place
• Security should be viewed as a business enabler
The life and pensions industry must commit to greater investment in data security programmes to protect its reputation and increase market share, analysis of an in-depth industry survey by IT and business services company Logica reveals.
The resulting white paper Information Security in the UK life, savings & investment and pension sector shows that while the industry has recognised the lessons of recent data security breaches, the industry still spends little on data security. It dedicates an average of only seven per cent of its IT budget to the issue – compared to the banking industry’s 20 per cent spend.
The survey represents the views of a third of the major players in the UK life, savings & investment and pensions sector, including Friends Provident, Standard Life and Liverpool Victoria.
The majority of those interviewed do not view security as a board issue, with no formal measurement procedures or formal governance structures in place. Of those surveyed, no organisation has a set of formal accreditation, such as ISO 27001 or similar.
Andrew Lloyd, Director of Strategic Solutions in the Financial Services division at Logica in the UK, says: “While the survey shows that the industry is taking the issue of data security seriously, this is not being translated into concrete actions. Security is a boardroom issue and customers are increasingly demanding greater levels of accountability. Investment in data security must increase very substantially in order to mitigate against the loss of market share and loss of reputation.
“Given the global financial crisis, the issue of information security is increasingly urgent. The industry must instill a sense of consumer trust in a time of uncertainty, as many customers fear their savings and pensions are unsafe. The credit crunch might also lead to an increase in on-line fraud, making the case for increased investment and accountability for security even more important.”
The research shows a positive correlation between increased data security spending and return on investment (ROI), encouraging the industry to view security as business enabler rather than a necessary drain on resources. If the life and pensions sector did actively seek more budget to spend on security, it would be more likely to assess ROI associated with its expenditure on security formally. Currently, most of the participants interviewed said they have no mechanism in place for judging a security ROI.
According to the survey the priority security areas to be addressed include identity theft, third parties and physical security. When it comes to security concerns, the security of home PCs, laptops and PDAs, keeping security simple and call centre confidence tricks are mentioned frequently by respondents. Those surveyed widely agreed on the need for two-factor authentication (2FA), with some companies seriously considering upgrading their authentication facilities, with others pushing for first-time installation of 2FA technology.
Andrew Lloyd adds: “By implementing simple and cost-effective techniques, security risks can not only be dramatically reduced but, equally important, market share and revenues can increase. For example, digital signatures are now widely used in the banking industry, eliminating the need for physical signatures, while at the same time speeding up the sales process. Companies should also be cleaning their databases frequently, ensuring that former staff and third parties are no longer live on the system.
“Implementing security solutions can certainly give a company a competitive advantage by helping to avoid barriers to access, reducing costs, enhancing its reputation – and preventing data leaks.”
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NOTES TO EDITORS
About Logica
Logica is a leading IT and business services company, employing 39,000 people across 36 countries. It provides business consulting, systems integration, and IT and business process outsourcing services. Logica works closely with its customers to release their potential - enabling change that increases their efficiency, accelerates growth and manages risk. It applies its deep industry knowledge, technical excellence and global delivery expertise to help its customers build leadership positions in their markets. Logica is listed on both the London Stock Exchange and Euronext (Amsterdam) (LSE: LOG; Euronext: LOG).
About the research
The Information security in the UK life, savings & investment and pension sector white paper is based on a research conducted by Logica, of directors and department heads from major players in the UK life, savings & investment and pensions sector.
The aim of the Logica survey is to provide evidence of the seriousness with which data protection and enterprise security is being taken across the sector, key issues and the approaches being taken to address the issue.
PR contacts
Nadia Boodram, Logica, nadia.boodram@logica.com 07921 932 363
Angelina Hunt, Trimedia, Angelina.hunt@trimediuk.com 020 7025 7595
Logica
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