The Financial Services Industry Leads the Way on Adoption of Encryption

financial services encryption

The use of encryption is increasing at a faster rate than ever before, and the financial services industry is leading the way. The Ponemon Institute recently revealed that 41% of companies in all sectors now report using encryption extensively, with the 7% year-over-year increase in usage seen in the 11th version of its Encryption Application Trends Study being the largest on record.

The overall rate remains well below that reported by banks, insurance companies, brokers, and others in financial services. In fact, companies in the financial services industry now have the highest adoption rate, with 56% of firms reporting extensive usage rates. The increase is largely due to the rising fear of cyberattacks and compliance regulations related to privacy.

The next highest adoption rates come from healthcare/pharmaceuticals (49%) and technology/software (48%). The lowest usage rates were reported by those from the manufacturing (25%), consumer products (27%), and entertainment/media (27%) sectors.

“There has been a steady increase in the use of encryption technology, with the highest increase ever in this year’s results,” said Larry Ponemon, chairman and founder of the Ponemon Institute. “Along with that increase we’ve seen the rise of new challenges in the areas of encryption key management, data discovery, and cloud-based data storage. The findings of this study demonstrate the importance of both encryption and key management across a wide range of industries and core enterprise applications – from networking, databases and application level encryption to PKI, payments, public and private cloud computing.”

encryption ponemon institute

The survey, which was sponsored by Thales e-Security and included insight from more than 5,000 professionals in 14 industries, also found that the financial services encryption uptake now makes the industry the most dedicated to database encryption, hardware security modules, and application-level encryption. When it comes to cloud data protection, financial companies are most apt to apply encryption to data at rest while also being the most likely to retain control over encryption keys rather than leaving them in the hands of the cloud provider.

“The increased usage of encryption can be traced to many factors, chief among them being cyberattacks, privacy compliance regulations, and consumer concerns,” said John Grimm, senior director security strategy at Thales e-Security. “Additionally, the continuing rise of cloud computing — as well as prominent news stories related to encryption and access to associated keys — have caused organizations to evolve their strategy and thinking with respect to encryption key control and data residency.”

Overall, respondents in the financial services industry made up the highest percentage of those who participated in the survey. Nearly one in six (16%) of the 5,009 people surveyed are in financial services.

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