Data protection and cybersecurity issues have assumed greater importance, especially in the financial sector, as AI and cyberattacks become increasingly complex and prevalent.
In 2024, financial sector regulators prioritized cybersecurity issues impacting financial institutions and the public. Key U.S. federal agencies—including the Securities and Exchange Commission, Federal Trade Commission, and the Consumer Financial Protection Bureau—have been joined by state regulators such as the New York Department of Financial Services in significant new federal and state regulations and more robust and novel enforcement actions. This trend is expected to continue in 2025 as the rise of digital transactions and advent of AI introduce additional risks and cyberattacks become increasingly complex and prevalent.
Note: “Recent Actions Taken” column does not include all requirements, click here for a more thorough overview
Source: Ropes & Gray
Private Equity Firms Face Security Concerns
Private equity firms are enticing targets for cybercriminals, due to their access to large amounts of sensitive and personal data across portfolio companies and the fact that they frequently insure their risks. This puts the reputations of both portfolio companies and private equity firms at risk. In addition, large deal sizes and the appeal of ready cash can also attract cyber attackers. Accenture reported that 68% of its clients see an uptick in cyber incidents during the month of a deal closure. Due to inherent vulnerabilities in the industry, it is imperative that private equity firms take the necessary steps to prevent and mitigate attacks for themselves and their portfolio companies.
Sources: Ropes & Gray, Accenture
