How Often Should Financial Firms Conduct Penetration Tests

Regulatory Expectations on Testing Frequency

The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) do not prescribe exact timeframes.

Instead, they expect penetration testing to be regular, proportionate, and risk-based.

Key guidance sources include:

• FCA Handbook SYSC 8 and SYSC 13 on operational risk and outsourcing
• PRA Supervisory Statement SS1/21 on operational resilience
• DORA Article 26 for EU-linked entities requiring at least one Threat-Led Penetration Test (TLPT) every three years

Together, these frameworks signal a clear principle: testing frequency should match the pace of technological and organisational change.

When to Test: Risk-Driven Triggers

Rather than following a fixed annual schedule, firms should link penetration testing to trigger events such as:

• Major technology upgrades, migrations, or cloud adoptions
• Implementation of new trading platforms or data-handling systems
• Integration of third-party service providers or APIs
• Post-incident verification following a cyber event
• Structural or business-model changes affecting critical services

This approach aligns with operational resilience mapping under both FCA and DORA expectations.

Testing should confirm that important business services remain within impact tolerances after any material change.

Learn more about how DORA changes the rules for penetration testing in investment management and why frequency is a key consideration.

Recommended Frequency Benchmarks

While no single schedule fits every firm, benchmark practices across the U.K. financial sector indicate:

• External and internal penetration tests: at least annually, or after any significant change
• Web application and API testing: quarterly or after each major release
• Cloud security assessments: bi-annually for dynamic or shared environments
• Red team exercises: every two to three years, in line with TLPT expectations
• Third-party testing: whenever critical suppliers or hosted systems are added or replaced

These benchmarks reflect best practice under frameworks such as ISO 27001, NIST SP 800-115, and the Bank of England CBEST model.

External references like the National Cyber Security Centre (NCSC) guidance on penetration testing offer further practical recommendations.

Testing Frequency for Different Firm Types

Continuous Validation Between Major Tests

Modern threat landscapes change too quickly for annual reviews to be sufficient.

Firms are adopting continuous assurance models that combine:

• Automated vulnerability scanning
• Targeted micro-tests after code changes
• Regular configuration reviews and attack-path simulations

By combining these with scheduled penetration tests, firms maintain near-real-time visibility of control effectiveness.

This layered approach improves resilience and reduces surprises during audits or TLPT exercises.

See how our Penetration Testing Services support continuous validation and measurable improvement.

Board Reporting and Governance Considerations

Boards increasingly want assurance that testing is timely, independent, and risk-aligned.

Security and technology leaders should therefore:

• Maintain a clear testing calendar integrated into the operational resilience framework
• Document testing rationale and scope decisions for audit readiness
• Track remediation completion rates as performance indicators
• Escalate overdue or failed retests to the risk committee

Embedding these governance steps ensures testing becomes part of enterprise-level resilience reporting, not just a technical checklist.

Explore our Cyber GRC Services to understand how testing governance integrates with wider compliance programmes.

Practical Takeaways

– Test at least annually and after every material change to critical systems

– Adopt a layered approach combining penetration testing, vulnerability management, and red-team simulations

– Integrate test schedules into operational resilience and Board oversight processes

– Use results to drive improvement, not just compliance reporting

– Review third-party testing obligations under supplier contracts and outsourcing policies

In Summary

There is no single correct frequency for penetration testing across financial services.

However, firms that link testing cadence to risk, change, and resilience priorities achieve stronger security assurance and better regulatory alignment.

Regular, proportionate testing demonstrates to regulators, investors, and Boards that cybersecurity is being managed as a core business function.

The firms that are likely to optimise the value from AI will be those that treat it as a strategic partner in their long-term security journey.