Security

Why Financial Institutions Are Turning to SOC as a Service

With breach costs climbing and regulators demanding continuous monitoring, banks, credit unions and insurers are outsourcing 24/7 threat detection and response.

BizTech Staff

In the current threat environment, a security operations center (SOC), is a must-have for any financial institution. But there’s a catch. The SOC may be generating thousands of warnings daily, leading to alert fatigue.

Roughly 41% of large enterprises report frequent alert overload. “An additional 20% say they have very frequent alert overload,” says Chris Kissel, research vice president in IDC’s Security and Trust division. “Another 3% say that they are almost always deluged with alerts — which is to say that they have more alerts than they know what to do with.”

In financial services, the cost of missing the wrong alert is steep. Breaches at financial services organizations averaged $6.3 million in 2026, well above the $4.99 million global average, according to IBM’s Cost of a Data Breach Report. IBM also found that financial services and energy organizations saw the highest concentration of AI-enabled attacks, raising the risk of cascading disruption across the sector.

Examiners have taken note. Financial institutions are navigating heightened regulatory security requirements that increasingly measure how consistent controls are operationally, not merely whether they exist. Such measures include continuous monitoring expectations, a 36-hour federal notification window for banking organizations and a 72-hour reporting clock under New York’s cybersecurity regulation.

For many banks, credit unions and insurers, a cloud-based subscription model for managed threat detection and response — known as SOC as a Service, or SOCaaS — can offer a way forward. “A strategic partner can help organizations manage risks, automate threat detection, strengthen their security posture and reduce complexity while staying ahead of evolving threats,” according to a recent CDW white paper.

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What SOC as a Service Delivers for Banks and Credit Unions

Many financial institutions lack the IT bench strength to run an effective SOC. “Most people think that you can run a SOC purely with off-the-shelf software, but it’s not really the case. You have to be able to author detections and manage your threat intelligence,” says Dan Schiappa, president of technology and services at Arctic Wolf.

As CDW’s white paper points out, staffing an in-house SOC with 24/7 coverage requires at least five to eight full-time employees. That is a tall order for a community bank, credit union or regional insurer competing with money-center institutions for scarce cybersecurity talent.

With SOCaaS, “you have a team of security experts monitoring your business. They’re factoring your unique context into those decisions, and they’re doing it on your behalf with their expertise,” Schiappa says. “The biggest benefit is you get to sleep at night.”

There’s a potential budgetary win as well. “It costs about $5 million to set up a true SOC,” Schiappa says. An “as a service” approach turns that capital expenditure into an operational expenditure — a meaningful distinction for institutions watching their efficiency ratios. And in terms of outcomes, “it’s roughly 15 times more safe to have SOC as a Service as opposed to just running a standard security function inside a company.”

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The market is moving in that direction. Banking and capital markets rank among the top five industries for global security spending in 2026, and managed security services are the fastest-growing services category in IDC’s Worldwide Security Spending Guide, which attributes the growth to the gap between rising cyber complexity and the shortage of in-house security talent.

For human defenders, SOCaaS can cut down on alert fatigue by highlighting only real and serious threats. “It sees an alert from the network detection response tool, and it matches it up with threat intelligence,” Kissel says. If it’s not an exploitable alert, “it could eliminate that alert from the queue.” Some institutions are already seeing that payoff: Equifax CISO Jeremy Koppen told BizTech that an AI triage agent auto-resolves nearly 50% of the credit bureau’s SOC tickets.

How Financial Services IT Leaders Can Make the Move

IT leaders at financial institutions can take steps today to start moving toward SOCaaS. First, it helps to know what you’re defending. “Take an inventory every month of your devices, your appliances and your users,” Kissel says. That inventory should reach into the vendor ecosystem: The 2026 Arctic Wolf Threat Report found that 65% of nonbusiness email compromise intrusions stemmed from abuse of remote access technologies such as Remote Desktop Protocol, VPN and remote monitoring and management tools — exactly the connections third parties rely on.

IT leaders should also take stock of their human talent. “What expertise do you have, and what do you want to have? And where is it better to rely on others?” Schiappa asks. By taking an honest look, leaders can start to spot gaps and build the business case for a managed services approach.

From there, it makes sense to do a formal proof of concept. “Have three or four vendors come in and take a certain number of IP addresses, and you give them a very specific trial: ‘We want you to look at these 40 alerts that we got from our SIM and tell us what further insights we should get from them,’” Kissel says.

A proof of concept matters especially in banking, because the tools perform differently in different industries. For example, “some tools work really well with a technology-focused environment, while some tools seem to do better with hospitality,” he says. Financial services buyers should press providers on core banking and payments telemetry, examiner-ready reporting and the ability to support regulatory notification deadlines.

A proof of concept can help identify the most effective solution for a given institution, and that can help drive success in a SOCaaS environment. Teams that want a broader baseline first can start with CDW’s cyber resilience checklist for financial services.

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