The Future of Banking Starts with Secure Financial Software

Trust has always been the currency of banking. In a world of instant payments, open APIs, and cloud-native cores, that trust now lives in software. Security isn’t a bolt-on feature anymore, it’s the foundation that enables innovation, compliance, and growth.

Below is a practical, human-first look at why secure financial software is the launchpad for the next era of banking and how leaders can hardwire security into everything from identity to cloud cores and third‑party ecosystems.

Why is security now the business model

• Breaches are expensive and rising. In 2024, the average breach cost for financial services hit $6.08 million, 22% above the cross‑industry average.
• Leaders rank cyber #1. In Bank Director’s 2025 Risk Survey, 84% of bank directors and executives cited cybersecurity as a top risk; 70% reported higher cyber insurance premiums over the last 18 months.
• Threat patterns are evolving fast. Verizon’s 2025 DBIR shows ransomware present in 44% of breaches, a 34% surge in vulnerability exploitation (especially edge/VPN devices), and third‑party involvement doubling to 30% all of which raise the bar for software assurance and vendor governance.

Recent update: what changed in 2025 (and why it matters)

• Regulation stepped up. The EU’s Digital Operational Resilience Act (DORA) came into force in January 2025, unifying ICT risk requirements across financial entities and intensifying expectations for software resilience, third‑party risk management, and incident reporting.
• Supervisors upped scrutiny. The Federal Reserve’s 2025 Cybersecurity and Financial System Resilience Report emphasize risks from third‑party providers, nation‑state actors, and AI‑enabled attacks calling for layered defenses and stronger supervisory toolkits.
• Attack surfaces shifted. The 2025 DBIR’s spike in edge/VPN exploits and partner-driven breaches underscores why banks must treat software supply chains and SaaS tenancy configs as first‑class security concerns.

What “secure financial software” means in 2025

1. Identity-first, phishing‑resistant authentication
   NIST’s latest guidance confirms passkeys (FIDO2) can meet AAL2 (and device‑bound passkeys AAL3), explicitly recognizing their phishing resistance a major upgrade over SMS OTPs and push-based MFA. Banking apps that adopt passkeys reduce credential‑theft risk without adding friction.
2. Cloud-native core with zero‑trust guardrails
   IDC finds 71% of banks still run on legacy core systems, while 98% plan significant core changes within three years; over 53% of large banks aim to put >40% of workloads in the cloud. Secure-by-design cores (immutable infrastructure, secrets management, SRE) are now table steak.
3. Comprehensive third‑party risk management
   With partner involvement in breaches doubling to 30%, vendor due diligence must extend to code provenance, CI/CD pipelines, and runtime observability, not just SOC2 PDFs.
4. API security for open finance
   Open banking continues to scale (e.g., global market value >$30B in 2024–2025 estimates; UK users 11.6M in Q1 2025), expanding the attack surface across consent, tokens, and data minimization. API gateways, fine‑grained scopes, and dynamic secrets are essential.
5. Real‑time payments and wallet security
   Digital payments have flipped the script: by 2024, digital methods accounted for 66% of global e‑commerce value and 38% of in‑person spend; wallets grew ~10× over a decade. Risk teams must harden device binding, behavioral biometrics, and tokenization.

A practical blueprint: build security into the banking stack

1) Identity & access

• Adopt passkeys for customers and workforce; mandate phishing‑resistant MFA for privileged ops.
• Enforce least privilege with role, attribute, and time‑bound access; log every admin action.

2) Core modernization

• If you’re moving to cloud-native core, isolate critical services, enforce service-to-service mTLS, and automate policies (“security as code”).
• Validate performance & resilience with industry benchmarks (e.g., Temenos + Azure tests at 17k+ TPS with AI workloads).

3) Secure software lifecycle

• Embed threat modeling, SAST/DAST/SCA, SBOMs, and signed artifacts from build to deploy.
• Treat configuration as a protected asset misconfigurations drive breach costs and detection delays. (IBM’s report shows finance averages 168 days to identify and 51 to contain breaches.)

4) Data & privacy

• Tokenize PII and apply field‑level encryption to high‑risk attributes.
• Use privacy‑preserving analytics for AML/fraud models to meet DORA and local privacy laws.

5) Third‑party & BaaS

• As BaaS expands, standardize vendor controls (key rotation, tenant isolation, inline WAF, posture scanning).
• Continuously validate incident playbooks with your partners; tabletop cross‑entity scenarios quarterly. (Most banks now run annual cyber incident exercises.)

6) Fraud & financial crime

• Ransomware and account‑takeover tactics are accelerating; combine behavioral analytics with strong step‑up authentication.
• In the UK, in 2024 fraud losses were £1.17bn, with remote purchase card fraud up 22% proof that adversaries pivot fast.

Stats that sharpen the strategy

• $6.08M: average breach cost in financial services (2024).
• 44%: breaches involving ransomware in 2025; 30% involved a third party.
• 71% of banks still run legacy core; 98% plan major changes; 53% of large banks target >40% cloud workloads.
• Digital payments = 66% of global e‑commerce value (2024); wallets grew ~10× since 2014.
• £1.17bn: UK fraud losses in 2024; APP fraud down 2%, but remote purchase cases up 22%.

Choosing the right partners (and why wording matters)

Security outcomes hinge on who builds with you:

• A seasoned Banking Software Company brings domain controls out‑of‑the‑box think KYC/AML hooks, ledger integrity checks, and event‑sourced audit trails.
• Digital Transformation Firms that integrate security architecture, cloud FinOps, and change management reduce modernization risk. (Only 10% of cloud transformations hit full value without disciplined engineering and measurement.)
• During Software Product Development, insist on: SBOMs, secure coding standards, exploit‑path unit tests, supply‑chain attestations (SLSA), and purple‑team drills before go‑live.

The payoff: secure software accelerates growth

When security is embedded at every layer, banks can confidently ship the innovations customers expect:

• Hyper‑personalized experiences safely powered by first‑party data and AI. (DORA’s resilience lens aligns perfectly with robust model governance.)
• Open‑ecosystem services secure APIs that let customers aggregate accounts, move money in real time, and access new credit options without compromising consent or privacy.
• Cloud‑native agility faster product launches, elastic scaling during peak events, and measurable reliability.

The future of banking isn’t just digital it’s secure by design. Get identity right. Modernize your core. Treat third parties like extensions of your perimeter. And measure everything.

That’s how you turn software security into competitive advantage and why the future of banking starts with secure financial software.