Banks across the UK are closing their physical locations, opting for online and mobile banking.
According to the Metro, “figures from last December showed 6,214 bank branches have shut since January 2015 – a shocking 53 every single month.”
While banks would laud the advantages of fast, anytime access to their services, the transition to the online banking space, has, however, exacerbated cyber risks.
According to Beyond Encryption, “The banking industry has experienced a 1,318% increase in ransomware attacks in recent years, underscoring the growing sophistication of cyber threats.”
The Financial Times reported that in 2024 alone, “criminals stole £571 million through both unauthorised and authorised card payment fraud in the first half of the year.”
David Warr (pictured left), QBE insurance portfolio manager for cyber, issued a stark warning about the future of cyber: “Cyber threats are evolving in complexity, taking advantage of new technologies and improved interconnectivity, especially around point-of-sale and payments.”
Despite the rapid digital shift, many businesses remain unprepared for the evolving cyber threat landscape.
According to Warr, “QBE research indicates that the number of cyberattacks has doubled globally since 2020, with 69% of medium to large UK businesses targeted in the past year.”
However, many businesses are still lacking essential protections. Warr said, “over a third of businesses (36%) lack an incident response plan, and nearly half (43%) remain uninsured against cyber threats.”
Brokers must stress that mitigating cyber risks requires strengthening security measures.
According to Warr, this involves two key elements: “ From a technical perspective, securing IT networks is essential. Businesses should manage remote access through multi-factor authentication (MFA) and address vulnerabilities promptly with a robust patching policy. Yet, even with advanced security tools in place, human error remains a major risk factor. Employee education and awareness training are crucial in preventing cyber breaches.”
Beyond the risks to businesses, individuals also face growing cyber threats. Timothy Zeilman (pictured right), vice president at HSB, highlighted the increasing danger of cyber fraud targeting individuals: “Cryptocurrency-related scams have been on the rise, so we’ve beefed up our coverage to protect against fraud aimed at digital wallets and cryptocurrency assets,” he explained.
Another concern is home title fraud, where criminals attempt to sell a property that the legitimate owner still possesses. This is more common in the US, but also happens in the UK. Zeilman warned, “Fraudsters will go and essentially sell a piece of property that the insured already owns.”
However, the risks associated with online banking are multifaceted.
Zeilman noted: “The main risks of online banking fall into two categories: technical and human. Technically, the biggest threat isn’t the bank’s system - it’s the security of the network the user is on.”
Zeilman stress that individuals must be aware of the danger: “If you’re doing banking on a mobile device, be cautious of public Wi-Fi.”
As cyber threats become more sophisticated, it is crucial businesses get the right protection.
According to Warr, “Cyber insurance policies will respond to a range of cyberattacks and provide comprehensive incident response support, whether the incident is caused by a failure in security tools or simply by an employee clicking on a malicious link in a phishing email.”
Warr believes “a robust cyber insurance policy should include incident response support, helping businesses recover operations quickly and providing cover for any ongoing business interruption losses.”
For personal users, Zeilman emphasised that cyber coverage is most effectively sold as an add-on to a homeowner’s policy: “The way that most of it is sold today, and the way that HSB sells it, is as an add-on to a homeowner’s policy,” he said.
While standalone options exist, he noted: “it is probably most successful in the marketplace today as an add-on.”
Additionally, Zeilman highlighted that while early adopters were high-net-worth individuals, experience has shown that “it’s relevant across the spectrum for both high-net-worth and standard homeowners.”
Brokers play a crucial role in helping businesses assess their exposure to cyber risks.
With access to industry-wide data, they can identify trends in cybercrime and advise clients on evolving threats.
Warr noted, “brokers will have a range of companies within their portfolio, giving them a real advantage in spotting emerging threats affecting different industries.”
As cybercrime continues to evolve, Warr believes businesses must regularly review their coverage and update their security measures.
“Businesses know their own risk better than anyone else,” said Warr. “It is essential that insurers, brokers, and clients communicate regularly to ensure policies remain relevant.”
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