The Cost of Cybersecurity to Banks

Companies are all too aware of the costs of cybersecurity seriously, but they're also increasingly aware of the costs of not taking cybersecurity seriously enough. With information becoming more detailed, attackers becoming more sophisticated, and even a single breach can have huge impacts on both a company's finances and reputation.

In attempting to stay ahead of the hackers, firms are becoming increasingly aggressive in their own cybersecurity budgets. J.P. Morgan Chase has indicated its intention to do whatever it can to protect its networks, through the commitment of a budget of $500 million towards cybersecurity. Even that budget may not be enough, as general counsel IP and data protection for J.P. Morgan Chase Andy Cadel noted, "J.P. Morgan is going to spend a half-billion dollars on security this year, and we still feel challenged."

As to why J.P Morgan Chase is choosing to invest so much in cybersecurity, the firm recognized the following key issues in their forward-looking statements:

  • Ability of the Firm to maintain the security of its financial, accounting, technology, data processing and other operating systems and facilities.
  • Ability of the Firm to effectively defend itself against cyberattacks and other attempts by unauthorized parties to access the Firm’s information or disrupt its systems.

J.P. Morgan Chase is not alone in its investments in cybersecurity — the total budgets for cyber crime for J.P. Morgan Chase, Bank of America, Citibank, and Wells Fargo for 2016 is expected to be on the order of $1.5 billion, and U.S. financial services sector as a whole is estimated to have spent $9.5 billion in 2015 on cybersecurity.