Higher Value, Better IT Security? Not In The Case Of Wealth Management
There is a misunderstanding that lies at the center of most wealth manager’s views of data security. This is the fact that data with the highest value is more protected than less valuable data. However, this is not always the case. On top of this issue, is the fact that wealth management firms are 18-30% less concerned with cybersecurity than mid-sized organizations that exist within other industries. This is why wealth managers are at a higher risk than other organizations when it comes to data security.
It is hard to say why cybersecurity isn’t being prioritized by wealth management firms, especially when you look at what recently happened at Mossack Fonesca. When this firm’s data was hacked, sensitive files were released, and serious damage was done to Mossack Fonesca’s reputation. This event should have every wealth manager looking at ways to improve cybersecurity at their firm.
A Valuable Target
Wealth management firms work with very high-value clients, which makes them an ideal target for phishing attempts. Being that these firms present such a lucrative opportunity for malicious actors, it can be expected that these hackers will dedicate above average amounts of time, effort, and resources in order to carry out a phishing attack.
Beyond the value of the target, many firms are currently going through a transition driven by the digitization of work environments. This makes these firms more vulnerable as business models evolve and operations are in a state of flux. Nearly 30% of individuals with a high-net-worth and the firms that are hired to manage their assets have reported issues related to cybercrime. This is a substantive number, especially considering the number of firms that do not have strong IT security policies in place to detect these crimes.
Two Common IT Security Threats
Considering the current lack of security protocols in place at many wealth management firms, let’s take a look at two of the most common and effective threats so that you can enact protections to shield yourself.
Viruses & Malware
Malware risks are high for wealth management firms due to the potential for substantive financial rewards involved. All team members need to be conscious of the potential threats associated with attachments and links in emails. In order to go even further than employee training, make sure that all anti-virus and malware tools are regularly updated, and deactivate unnecessary functionality associated with your software, hardware, and operating systems. Also, maximize the quality of your passwords and place them behind a firewall.
Spear phishing is a scary cybercrime to consider, as too many organizations have watched as their money is transferred to unknown accounts. If data exists to improve the likelihood of a successful phishing attempt, malicious actors will use it to their advantage. These cybercriminals work to gain access to an organization’s network and uncover information that makes their victims an easy target. Employee training is also a powerful defense here, as every individual from the bottom up needs to understand how dangerous spear phishing can be, as well as what to keep an eye out for.
If you have the ability to hire a cyber-security manager whose sole responsibility is the protection of your organization’s digital operations, then we would recommend it. However, many smaller outfits do not have the resources for this type of hire, which is why it is important to partner with an IT firm that you can trust to handle certain aspects of your cyber-security processes.
Additionally, all employees need to be educated and have a solid understanding of where risks exist. Network activity should be steadily monitored and analyzed in order to improve the detection of threats. An organization’s security policies are also a massive piece of this puzzle, as deletion policies, password policies, and mobile device policies should all be in place. Finally, in the event of a cyberattack, you can improve response times by enacting comprehensive disaster recovery and business continuity plans.
Great cybersecurity at an organization requires a proactive approach. This approach should be customized to your specific risks and potential vulnerabilities. A trusted IT partner will help enact the types of policies and frameworks needed to ensure that you are protected and ready to thwart malicious actors should they present themselves.
If you are a wealth management firm that is ready to explore how an IT support partner will save you time and money, as well as keep you adequately protected, give us a call at 630-769-8700.