As we embark deeper into 2024, it’s crucial for Wealth Management firms to recognize the increasing vulnerability they face in the realm of cybersecurity.
Partnering with a firm who focuses on cybersecurity is paramount to managing cyber threats and meeting specific cyber-related regulatory requirements.
In this blog post, we delve into trends from 2023 that demonstrate why Wealth Management firms must prioritize cybersecurity-specific solutions in 2024.
Trend 1 – Few investment advisors adopt cybersecurity solutions
Only 24% of advisory firms surveyed for the 2023 Inside Information Advisor Software Survey use cybersecurity solutions. This statistic is alarming amidst reports that Wealth Managers continue to be a frequent target for potential cyber attacks.
Lesson Learned
Implementing robust cybersecurity-specific processes and solutions protects sensitive client data and reduces the risk of a successful cyber-attack.
Trend 2 – Evolving regulatory landscape
The Securities and Exchange Commission (SEC) is introducing new rules to address cyber threats faced by the financial industry.
Lesson Learned
By partnering with an independent cybersecurity partner, Wealth Management firms can ensure you can meet the pending SEC cyber rule, scheduled to be published in April 2024.
- Read: The SEC Cyber Rule Factsheet.
Trend 3 – Third-party vendors are some of the weakest links
GoAnywhere’s software was used by managers including Mackenzie Investments, Edward Jones, and Franklin Templeton, whose investors’ sensitive data was exposed in a zero-day exploit. Investors filed a class action lawsuit blaming the managers illustrating that firms retain ownership, even when the breach occurred in a third-party technology.
Lesson Learned
A Wealth Management firm may have their own cybersecurity program in order, but client data can still be breached through an unvetted third party vendor. Vendors should meet or exceed the cyber standards of your business and a Vendor Risk Assessment can help ensure that is true.
Trend 4 – AI-powered attacks use realistic impersonations
Cyber attackers are leveraging artificial intelligence (AI) to launch sophisticated attacks. By using AI algorithms to deceive wealth management professionals into divulging sensitive information via phone and email:
Lesson Learned
Cybersecurity phishing and awareness training that addresses current cyber-attack tactics can mitigate the risk of staff becoming a victim of monetary fraud.
Get smart and take action – Wealth Management firms are falling behind other alternative investment firms and are not equipped to meet the specific challenges posed by cybersecurity. By partnering with an independent cybersecurity provider, Wealth Management firms can ensure comprehensive protection, safeguard client assets, and maintain their reputation against an increasingly critical business risk.
Take Away – Learn more about how to implement and manage a cybersecurity program that aligns with your firm’s size and scope by requesting a time to speak with a Drawbridge representative.
