Organizations are becoming more reliant on complex or specialized technology…
There is an old saying that bad things come in threes, and in the case of the financial markets since the pandemic, it may be apt. First, there was a loss of fee income from falling markets. Second, an economic meltdown, which shook the entire financial services industry and ended a 10-year positive credit cycle. But experts predict the third bad thing is yet to come. And it could be the worst of the lot.
As financial organizations invest in digital transformation to support the technological challenges that have resulted from the pandemic — primarily remote work programs — the number of cybersecurity breaches experienced by financial firms has risen sharply. Research now suggests that the second half of 2021 could bring a wave of cybercrime like none other in history. Wealth managers already know how to protect financial assets. Now they must extend that level of protection to digital assets.
Remote work made security an afterthought…
With so many wealth managers, broker-dealers and investment advisors working from home over the last year, financial services companies have invested in new technologies to keep staff and customers connected. They are using collaboration and conferencing tools to communicate with clients about investments, tax planning, estate planning and other services. Some organizations have also invested in mobile apps to facilitate digital transactions.
Here’s the problem: As companies migrate data from legacy systems to brand-new environments, there are continuous opportunities for hackers to steal that data or for employees to — unwittingly or not — evade important security measures.
According to a survey from Palo Alto Networks on The State of Hybrid Workforce Security in 2021, nearly half of respondents put extra focus on evolving network architecture when the pandemic made remote work a necessity. However, that same group of respondents reported a failure to make their networks more secure.
…and it hasn’t seen much improvement
A new study predicts the future of cybersecurity for financial service organizations. And the predictions are not positive.
- Sixty-two percent (62%) of financial firms think it’s “likely,” “extremely likely,” or even “inevitable” that their organization will experience an email-borne cyberattack in the second half of 2021
- Fifty-seven percent (57%) of respondents in the survey believe the volume of these attacks will be their greatest email security challenge in 2021
The research also reveals that email volume increased for financial firms by 81% over the last year, which increased the likelihood of email attacks.
- Sixty percent (60%) of companies surveyed saw a rise in phishing communications with malicious links and attachments
- Forty-two percent (42%) noticed more spoofed emails and cloned web domains
- Eleven percent (11%) saw a significant increase in emails that misappropriated their brand image
Ransomware is on the rise in the financial services sector. More than half of all companies in the above survey revealed a ransomware attack “somewhat” or “significantly” affected their organization in the last year. This echoes another recent study that shows a five-fold increase in ransomware attacks on the banking and global financial systems in 2020 — a quarter of all cybersecurity attacks in the financial services industry. Wealth management companies are at particular risk because they hold so much financial data about high-income individuals.
“Cybersecurity threats targeting banks and wealthy individuals — such as those using family offices — have been an industry concern for years,” says WealthBriefing. “A worry has been that advisors to high-net-worth individuals and family offices haven’t traditionally been on the leading edge of IT security and are therefore vulnerable.”
What’s the solution? Enlist the professionals
Wealth management firms can no longer ignore the cybersecurity threats that are affecting the financial services sector. Cranking up security credentials, however, is an enormous challenge. Not only is there a surge in email-borne attacks and ransomware; financial services firms are managing compliance with ever-stringent regulatory obligations from the SEC and FINRA and burgeoning data privacy laws. It’s no wonder cybersecurity sometimes takes a back seat to other digital priorities.
Matching up security protocols with the other challenges of a primarily digital workplace should never be an afterthought. Fortunately, it doesn’t have to be.
Imagine a digital platform that takes care of cybersecurity and data governance obligations, letting financial services professionals get back to business: Managing wealth, brokering deals, and handling investments.
Entreda Unify is built specifically for financial services firms to monitor and enforce cybersecurity and compliance for all employees, across all devices, 24 hours a day.
Client benefits include:
- World-class cybersecurity protection against email-borne attacks, ransomware, and other current and future threats
- Audit and compliance tools
- Cybersecurity policy enforcement features
- Peace of mind
Counter the rule of threes
Financial services firms are still reeling from the economic impact of the pandemic, but there are more challenges ahead. Research suggests that the second half of 2021 could be the worst-ever time for email-borne cyberattacks. And ransomware is on the rise across the industry. It’s time for wealth management companies to invest in a cybersecurity platform that provides them with the protection they deserve.
Reach out to email@example.com to learn more about Entreda — the cybersecurity and compliance solution for wealth managers, dealer-brokers, investors, and other financial services professionals.