As digital transformation accelerates across South Africa’s financial sector, the regulator has moved to fortify the industry against an increasingly sophisticated wave of cyber threats. At the heart of this regulatory push is Joint Standard 2 of 2024 on Cybersecurity and Cyber Resilience. It is a landmark regulatory framework issued jointly by the FSCA and the Prudential Authority. This standard introduced mandatory cybersecurity and resilience requirements for certain financial institutions. In addition, the FAIS Act requires ALL financial services providers (FSPs) to maintain a comprehensive risk management framework, which now extends to how these licensed entities manage cyber risk.
Why this standard matters now
South Africa’s financial services sector is among the most targeted industries for cybercrime on the continent, with increasing ransomware, phishing, and fraud incidents representing major business and systemic risks. National data shows that cybercrime costs the South African economy an estimated R2.2 billion annually, with the average cost of a data breach hovering around R44 million per incident. Statistics show that 60% of SMEs close within six months of a cyberattack or breach.
Joint Standard 2 addresses this reality by requiring regulated institutions to adopt comprehensive cybersecurity strategies aligned with their business objectives and risk profiles, establish strong governance and oversight mechanisms, and implement proactive practices for threat detection, response, and recovery.
Key requirements for FSPs
FSPs are obliged to demonstrate that they have the following in place:
- Governance and accountability;
- Continuous cyber risk monitoring and assessments;
- Incident management and resilience;
- Protection of digital assets and information; and
- Cybersecurity awareness programme for employees.
Intermediaries often rely on digital platforms to save and access client data, facilitate transactions, communicate with clients, and manage investments. The Joint Standard 2 obligations mark a major shift from advisory and sales compliance to the full integration of cyber risk management into their core operations.
The stakes of non-compliance
The consequences of failing to meet the cyber resilience requirements extend far beyond regulatory sanctions and fines, but also include possible:
- Reputational damage;
- Operational disruptions; and
- Legal and civil liability.
Building resilience and trust
For many FSPs, compliance with Joint Standard 2 is not merely a regulatory checkbox; it is an opportunity to embed cyber resilience into their business’s DNA. As South African organisations increasingly recognise cybersecurity as a competitive differentiator, enhancing cyber controls can also protect customer data, strengthen operational continuity, and support long-term business success.
However, the clock is ticking. With the compliance deadline looming, FSPs must accelerate investments in governance and technology. Those that act decisively will not only adhere to regulation but also position themselves as trusted custodians of digital finance in an era where cyber risk is among the most pervasive threats to economic stability.
In the interconnected world of digital finance, cyber resilience is no longer optional; it is foundational to survival and growth. Joint Standard 2 ensures that South Africa’s financial ecosystem rises to meet this reality.
The cyber compliance countdown has started. Are you ready?
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