Financial advisers risk underestimating cyber security

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Jul 12, 2019

Advisers risk underestimating the threat of cyber crimes, analysis from NextWealth, on behalf of FundsNetwork has suggested.

The survey of 206 advisers showed that planners are primarily concerned with the challenges presented by compliance and changing regulation – with only a small percentage worried about attacks on their systems or managing clients’ concerns about cyber security.

FundsNetwork said that “far greater emphasis is required to help financial advice businesses prepare for potential risks, given the National Cyber Security Centre handling more than ten attacks per week within its first two years and identifying financial services as a targeted sector.”

Head of Fidelity International FundsNetwork Jackie Boylan says: “Cyber security is one of the biggest risks companies face, with attacks increasingly sophisticated in nature. Sectors associated with the transfer or holding of sensitive customer data – particularly financial data – are a prime target for hackers.

“Therefore, it is imperative those working in financial services understand the risks they face, and how best to prepare for the worst.

“While there are steps advisers can take to bolster their own systems, one of the first points for consideration should be encouraging vigilance among employees – making sure they know how to spot potential scams.

“Email provides hackers with an easy point of entry into an organisation; simply clicking on a link can provide them with access to data and the ability to cause widespread disruption. Increasing awareness of risks can help to encourage behavioural change, ensuring everyone understands their responsibility to pause and think about the materials they access.”

NextWealth managing director Heather Hopkins adds: “Cyber security is important but often gets left off the urgent list in businesses. Our research for FundsNetwork suggests this is the case in many financial advice businesses. Pressing day-to-day challenges have a habit of superseding long-term structural challenges.

“Cyber security is on the radar but firms may not be doing enough to protect themselves and their clients.”

The Business challenges facing financial advisers research revealed that just 6 per cent of advisers recognise the threat posed by cyber security as a major challenge for their business, despite the risk of attacks increasing.

Top ten steps to help protect your business

1.    Always verify a client’s identity

2.    Do not act solely upon an instruction received by email

3.    Carefully review the contents of any client communications

4.    Validate updated bank account information and other details

5.    Do not reveal sensitive information within pre-populated forms

6.    Keep your anti-virus and systems up to date, and back up your data

7.    Use robust passwords for all your systems and devices

8.    Report suspicious activity

9.    Keep on top of the latest security issues

10.  Make someone responsible for cybercrime/fraud preventions

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