A recent study by the Depository Trust & Clearing Corporation, revealed that cyber security is the number one concern for 46% of all financial institutions in the US.
Internet-based threats brought about more worry than market policies, new regulations, geopolitical risk, and the worldwide economic slowdown.
As cyber-attackers become more sophisticated, the threat landscape expands, making it necessary that Los Angeles RIAs implement security solutions to identify, monitor, and handle risk.
Traditional acts of cyber-crime such as password theft remain a problem, but newer threats loom large more recently, some of which are listed and explained below.
A form of malware that restricts access to infected computer systems, ransomware is evolving at an alarming rate. In its recent report on cyber-risks, McAfee predicted that variants of this threat could take over endpoints that subscribe to Google Drive, Dropbox, and other cloud-based storage services.
Once it is in control, the ransomware will try to exploit a user’s stored credentials to infect stored data, encrypting it and enabling attackers to demand money for release of the data.
Theft of Mobile Payment Data
Although the theft of financial information is not a new phenomenon, methods of paying for goods and services have expanded to include mobile and contact-free payments, and hackers have developed strategies for taking advantage of them.
Although criminals would be required to target individual cards instead of entire financial institutions, any RIA who accepts credit card payments from clients need to guard payment card data vigilantly.
Insecure passwords remain a big risk. Despite widespread awareness of the threat, it continues to cause breaches. Experts blame flawed password recovery protocols: security questions are something that only an account owner should know, but the tendency to overshare on social media makes a lot of the answers easy to look up.
For greater cyber security, RIAs should use case-sensitive passwords that consist of letters, numbers, and symbols.
Botnets are groups of computers or Internet-enabled devices that have been hacked and used to attack servers and commit fraud. According to industry experts, botnet attacks have caused financial institutions to suffer losses amounting to millions of dollars. Potential new bots are springing into action all the time, so financial advisory companies must remain on the alert for unusual network activity.
Los Angeles RIAs are required to protect data from unauthorized access at all times. Consumer protection is mandated by industry as well as state and federal regulations.
The attackers and the attacks are both constantly changing, making it difficult for security defenses to keep pace, but constant vigilance can prevent situations before they reach crisis point.
Has your firm improved its cyber security in the wake of recent and highly publicized company hacks? Let us know your thoughts in the Comments box below.
And to follow-through on the tips introduced in this short article, be sure to download your free guide, Investing in High Net Worth Clients: The LA Investment Advisor's Guide to Using Technology to Manage and Grow Your Firm.