By Nige Wilkinson, COO, Cyberfort
For many board directors in financial services, cyber security confidence is built on certificates, audit reports and regulatory tick boxes. The problem is that none of these things, on their own, actually prove an organisation is secure.
In recent years, regulation has pushed firms to demonstrate compliance at pace. In response, many institutions have invested heavily in frameworks, accreditations and assurance programmes that look reassuring on paper. But too often, this has created an illusion of control rather than genuine operational resilience. The result is what many security leaders now describe as ‘paper security’.
Compliance is not the same as capability
Frameworks such as ISO 27001, SOC reporting and sector specific regulatory requirements have an important role. They create common language, minimum standards and accountability. But they were never designed to prove that a business can withstand a real-world cyber attack.
Firms collect certificates, pass audits and reassure boards that security is under control, even when fundamental weaknesses remain. Accreditations are frequently delivered through narrowly scoped assessments that focus on documentation rather than behaviour, process effectiveness or real technical capability.
This is compounded by the growth of providers offering compliance led security services without the depth of expertise needed to deliver operational defence. In some cases, organisations receive assurance from firms that are not equipped to detect, respond to or recover from advanced attacks. The paperwork is correct, but the protection is thin.
Recent regulation has unintentionally reinforced this behaviour. The introduction of initiatives such as the Digital Operational Resilience Act and evolving FCA expectations around operational resilience have increased pressure on firms to demonstrate compliance quickly. The risk is that boards see regulatory alignment as the end goal, rather than a baseline from which real security maturity must be built.
The real cyber challenges financial services now face
As we move through 2026, the threat landscape facing financial services is becoming more complex, not less. Attackers are increasingly patient, well-funded and focused on exploiting operational weaknesses rather than technical flaws alone.
Supply chain compromise remains one of the biggest risks. Financial institutions are deeply interconnected with technology providers, outsourcers and partners. A single weak link can provide attackers with privileged access that bypasses traditional controls. Regulation has highlighted this risk, but many organisations still rely on questionnaires and contractual assurances rather than active oversight.
Ransomware continues to evolve, with attackers shifting focus from encryption to data theft and extortion. This puts regulatory, reputational and legal pressure on organisations simultaneously. At the same time, identity based attacks are rising, exploiting gaps in access management and user behaviour rather than software vulnerabilities.
One widely cited industry study shows that the majority of successful breaches now involve compromised credentials rather than technical exploits. This reinforces the point that documentation and policy alone do not stop attacks. Day to day operational discipline does.
Moving from paper security to operational maturity
The answer is not less regulation. It is a better interpretation of what regulation is trying to achieve. Boards need to move beyond asking whether the organisation is compliant and start asking whether it is genuinely prepared.
Operational maturity is about evidence, not paperwork. Can the organisation detect an attack quickly? Can it contain damage? Can it recover critical services under pressure. These questions cannot be answered by an audit report alone. They require testing, rehearsal and continuous improvement.
This shift also requires clarity about the role of security partners. Firms should be wary of providers that lead with certificates rather than capability. Effective security comes from teams that understand the threat landscape, can operate in real time and are accountable for outcomes, not just assessments.
Encouragingly, there is growing recognition across the sector that security must be treated as a business resilience issue rather than a compliance exercise. Regulators are increasingly focused on outcomes, not intent. That creates an opportunity for boards to reset the conversation and invest in security that works when it matters most.
Security That Works When It Matters
Compliance will always be part of financial services security. But when it becomes the primary measure of success, it creates dangerous blind spots. Paper security may satisfy auditors, but it does not stop attackers.
As regulation continues to evolve, boards have a choice. They can use compliance as a comfort blanket, or as a foundation on which to build real operational resilience. In 2026, the difference between the two will be felt most clearly when things go wrong.
