FIS Asks: How Much do Cybersecurity Failures Cost Firms?

Cyberthreats, fraud and technology gaps are enhancing mounting costs across financial institutions and fintech firms, according to a new report from FIS and Oxford Economics.

Their joint research, 'The Harmony Gap: Finding the Financial Upside in Uncertainty', reveals that businesses lose an average of $98.5m every year due to inefficiencies and operational disruptions—many of which stem from cybersecurity failures, outdated systems and fragmented digital infrastructure.

The true cost of cyberthreats and fraud

At the core of these losses is a breakdown in the money lifecycle—defined as the complete journey of funds across an organisation's systems.

This breakdown is often exploited by cybercriminals, with 88% of c-suite executives surveyed identifying cybersecurity as their most pressing concern.

Fraud follows closely, with 79% citing it as a major source of disruption.

Regulation also adds pressure, with 65% of business leaders expressing concern about compliance-related complications.

FIS Chief Executive and President Stephanie Ferris explains: “We commissioned this research to determine the sources of disruption and inefficiencies within organisations' financial ecosystems, whether money is at rest, in motion or at work. The findings uncover the consequences of disharmony in the money lifecycle.”

Firms are especially vulnerable during fund transfers.

Over half of executives (51%) say that moving money through payment systems is the most stressful phase.

Despite the widespread adoption of automated payments, with 79% of companies using some form of automation, delays are still common, with 57% experiencing them at least once a month.

The daily reality for many firms is a near-constant cyber onslaught.

Some 37% report daily cyberthreats and 74% encounter critical threats every month.

While most organisations (83%) claim fraud management is a top priority, only 47% conduct regular staff training and 53% are not satisfied with their current fraud response mechanisms.

Insurance firms appear better prepared, with 75% using employee training as a primary fraud prevention method, outpacing the cross-industry average of 48%.

Building fintech resilience through dedicated teams

Investment in financial technology emerges as a clear differentiator.

Companies with dedicated fintech teams are significantly more prepared to handle cyber risks, inefficiencies and regulatory challenges.

In these firms, 85% say they are at least moderately equipped to meet these operational demands.

These same organisations are also seeing measurable financial benefits.

Some 83% of companies that adopted embedded finance solutions report revenue growth, with an average increase of 8.5% in sales attributed to such initiatives.

However, the insurance sector appears to lag. Only 52% of insurance companies surveyed have dedicated fintech teams in place, well below the 74% cross-industry average.

That technological gap could be a risk as the fintech landscape continues to evolve and cyberthreats grow more complex.

Firdaus Bhathena, Chief Technology Officer at FIS, says: “The findings highlight that a well-defined technology strategy, supported by a dedicated and knowledgeable team, is a fundamental component of a firm's success. 

“Companies that invest in building or partnering with fintech expertise are better positioned to optimise their financial operations.”

AI's promise meets cybersecurity concerns

AI, and particularly Gen AI, is a focal point of fintech investment.

More than half of companies (55%) are investing in AI and machine learning to meet strategic goals, such as increasing agility and acquiring customers.

Despite this enthusiasm, implementation remains challenging.

The cost of deploying and maintaining AI technology concerns 73% of executives.

Meanwhile, 64% lack sufficient in-house expertise and 58% are struggling to integrate AI tools into their existing systems.

Even so, the optimism remains.

Just over half (56%) of executives see AI as a tool for improving responsiveness and adaptability.

Nearly half (48%) believe it will help attract new customers, especially as financial services shift towards digital-first experiences.

Research Manager at Oxford Economics, Bianca Fisher, underlines the core message of the report: “This research has quantified the impact of tensions within the money lifecycle.

"This analysis has allowed us to identify the cost of financial disharmony and how it can hinder organisational growth. By working with FIS, we've delivered insights that will help businesses globally understand and address these challenges.”

FIS intends to publish the full report at its annual Emerald conference in May, further exploring how businesses can align cybersecurity, fintech strategy and AI investments to prevent costly inefficiencies and system breakdowns.

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