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Rising fears of cybercrime are prompting financial services firms to beef up their spending on security, according to research from Lloyds Bank Commercial Banking.

Of more than 100 senior execs quizzed, 87% have become more concerned about cyber-risks over the last year, with nearly a quarter becoming significantly more worried. This trend appears to be reflected in the fact that 85% of respondents say that their firm has spent more on tackling cyber risks in the past year, with 14% reporting a significant rise.

When asked about what they wanted to achieve from their technology investment in the coming year, 14% cite improved cyber-security as their top priority. It is the third highest priority area flagged behind reducing operating costs and revenue growth.

The picture is similar when firms are asked about risks to their UK operations for 2018. Respondents say cyber security is one of the most significant risks, alongside increased market competition and geopolitical uncertainty, but behind macro factors such as the effects of Brexit and economic uncertainty.

Despite firms prioritising investment in new technology to safeguard against cybercrime for the year ahead, one in 10 are still not insured against a cyber-attack. A similar number say they have taken no steps to arrange contingency funding, and seven per cent have made no contingency arrangements with banking providers, such as to guarantee payments.

However, almost all firms questioned say they are confident their finance and treasury functions are suitably prepared to recover from an attack, with one in five saying they are very confident.

Robina Barker Bennett, head, financial institutions, Lloyds Bank Commercial Banking, says: "While reassuring overall, there are still a small minority of organisations that aren’t mitigating risk with insurance or contingency measures.

"The financial and reputational impact of a successful cyber-attack is becoming more severe. Investment in proactive, preventative cyber security measures should go hand-in-hand with robust planning for the worst-case scenario."

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