Where Cybersecurity Budgets Go to Waste - and How to Fix It

George Ralph of RFA discusses how financial firms can avoid wasting money by taking a smarter, more strategic approach to cybersecurity spending.

Cybersecurity is one of the most crucial aspects of any IT environment, especially now that data breaches and other sophisticated cyberattacks are more common than ever. However, I’ve noticed that several financial firms make poor spending decisions when it comes to cybersecurity.

Yes, it’s essential to invest in cybersecurity to stay protected from modern threats - but that investment must be made strategically to avoid wasting your hard-earned money on the wrong things.

In today’s article, I’ll discuss some of the key ways financial firms misuse funds in the name of cybersecurity. My goal is to help you ensure that every dollar you spend contributes meaningfully to the security of your firm. So, without wasting any more of your time, let’s explore the different ways companies overspend on cybersecurity.

Tool Overload (Tool Sprawl)

One of the most common misconceptions about cybersecurity is that the more tools you have, the more secure your environment becomes. However, that’s rarely the case - in fact, it can often be the opposite. Tool sprawl occurs when businesses purchase multiple products that perform similar functions, such as several endpoint protection tools or overlapping firewalls.

Instead of enhancing protection, this creates unnecessary complexity and confusion for IT teams. Managing multiple dashboards, alerts, and configurations becomes more challenging, reducing visibility and slowing response times. Without proper integration, security teams end up with fragmented systems that are expensive to maintain and difficult to manage, ultimately increasing risk rather than reducing it.

Take time to audit all the tools your organisation uses and evaluate whether each one is truly necessary. Eliminate any that have overlapping functions, and consider adopting all-in-one solutions that provide broader functionality. These unified platforms often deliver better visibility, lower costs, and greater efficiency compared to managing multiple fragmented tools.

No Strategic Plan or Risk Assessment

Another common mistake I’ve noticed among financial firms is investing in cybersecurity tools without first understanding their unique risks or most valuable assets. Buying solutions before identifying what needs protection is like installing locks without knowing which doors exist.

For example, some organisations spend heavily on advanced analytics or AI-driven tools while neglecting basic security practices such as patching, backups, and access control. Without a clear strategy or proper risk assessment, cybersecurity investments become random and reactive, often failing to address the actual threats the business faces.

Before spending a single dollar on cybersecurity, you need a well-defined strategy - and that strategy should be driven by a comprehensive risk assessment. A thorough risk assessment helps you identify which areas of your environment require the most attention and which tools best fit those needs. It also makes it much easier to calculate the ROI of your cybersecurity investments, ensuring every dollar contributes meaningfully to your firm’s protection.

Neglecting Employee Training

Another common misconception among firms is believing that using state-of-the-art security tools is all it takes to keep their environment safe. However, technology alone can’t prevent cyberattacks - people play a vital role too. Your team is often the first line of defense, yet many organisations overlook the importance of security awareness programs.

Phishing, social engineering, and insider threats remain some of the leading causes of data breaches - all of which can be significantly reduced through regular training and simulated attack exercises. Investing heavily in advanced tools while neglecting employee education creates a major security gap that technology alone cannot close.

Before spending on the latest security solutions, make sure your “human firewall” is strong. When employees understand how to identify suspicious activity and handle sensitive data responsibly, your organisation’s overall security posture improves dramatically. In addition, your technical teams should receive specialised training to ensure they can effectively use and manage the modern security tools you’ve invested in.

Poor Vendor Selection

The tools you choose for your firm will have a significant impact on your overall cybersecurity costs, so it’s important to be strategic about vendor selection. For example, if you need a SIEM solution or a firewall, there are numerous options available, each with different pricing models and feature sets. It’s essential to carefully evaluate these factors before deciding which one best fits your firm’s needs and budget.

Another effective way to reduce costs is by bundling licenses, especially when a single vendor offers multiple security solutions - and this is often the case. For instance, Microsoft provides tools such as SIEM (Sentinel), anti-malware software, and firewalls that are typically more affordable when purchased as part of a bundle rather than getting each of these tools from separate vendors.

Beyond cost savings, choosing tools within the same ecosystem can also improve efficiency and performance. When security solutions are built to work together, they can share data seamlessly, providing better visibility, faster detection, and a more coordinated response to threats.

Integration and Maintenance Costs

Cybersecurity tools aren’t plug-and-play investments - they require ongoing maintenance, integration, and skilled personnel to manage them effectively. Many firms overlook these hidden costs, assuming a one-time purchase will cover their needs.

In reality, connecting multiple tools, keeping them updated, and training staff to use them properly can significantly increase the total cost of ownership. Without planning for these ongoing expenses, even well-chosen tools can become financial burdens that drain budgets and reduce efficiency over time.

Like I shared earlier, it is also important to choose tools that seamlessly integrate with your current tech stack to minimise the costs and complexity of integration. The goal should be having several security tools that can communicate with no limitations.

Building internal capacity

Another point worth mentioning that can lead to overspending is trying to do everything internally. While having an in-house security team may seem like the best option on the surface, it’s not always the most practical or cost-effective approach for some firms.

Building internal cybersecurity capacity is typically viable only for large enterprises with substantial budgets - those that can afford to hire, train, and retain dozens or even hundreds of skilled cybersecurity professionals.

For small and mid-sized financial firms, outsourcing cybersecurity services to specialised experts is often the smarter choice. It not only reduces costs but also gives you access to top-tier talent that would otherwise cost hundreds of thousands—or even millions—of dollars to train and employ annually.

You can maintain a small internal technical team to liaise with external partners, but building and sustaining a fully fledged in-house cybersecurity department is rarely feasible for most smaller financial institutions.

Bottom Line

If there’s one key takeaway from this article, it’s that cybersecurity investments are essential - but they only deliver real ROI when made strategically. You shouldn’t invest for the sake of investing, but to address specific cybersecurity challenges. Start with a thorough risk assessment to identify gaps in your environment, then choose security solutions that truly strengthen your IT infrastructure.

As discussed throughout the article, cybersecurity isn’t just about the tools, it’s also about the people and the partnerships behind them. Your employees should understand security fundamentals, and your technical teams must know how to properly use the tools they’re given. Investing in cybersecurity awareness is just as critical as investing in technology itself.

For firms that lack in-house expertise, partnering with a trusted cybersecurity provider like RFA can make all the difference. Our team of seasoned security professionals has years of experience helping financial firms optimise their security posture. We ensure you’re only paying for what truly adds value - building a safer, more resilient environment without breaking the bank.

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