Client Affairs

Cyber Attacks: The “New Normal” For Financial Services Industry - Booz Allen

Eliane Chavagnon, Editor - Family Wealth Report, December 6, 2013

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There are “acute concerns” about cyber security risk management in what Booz Allen describes as today’s “new normal” of persistent threats in its list of Top Financial Services Cyber Security Trends for 2014.

Five years ago, boards of directors and senior executives at
financial services firms will probably have cited liquidity, regulatory compliance or “bad
debt” among their toughest risk management issues.

But there are now “acute concerns” about cyber security
risk management in what Booz Allen describes as today’s “new normal” of
persistent threats in its list of Top
Financial Services Cyber Security Trends
for 2014.

Only yesterday, for example, did Singapore’s
financial regulator raise the alarm about cyber security breaches at
financial organizations after it emerged that 647 client account statements at the private bank of UK-listed
Standard Chartered had been stolen. Meanwhile, JP Morgan yesterday warned some 465,000 holders of pre-paid cash cards issued by the bank that their personal information may have been accessed by hackers, Reuters reported.

While the issues of data protection and security
are arguably the most important facing the wealth management industry today, that is, of course, not to say that the other above-mentioned challenges are not still very much significant areas of focus. 

The new trend, though, is that executives have seen how “distributed denial-of-service”
attacks - in which a multitude of systems attack a single target
- can destroy data and reputations, Booz Allen said. “They learned that cyber threats attack a bank wherever it
does business, not just where it is headquartered. And they witnessed the
critical benefits of public-private information sharing.”   

The findings are in line with those stemming from the 2013
FOX Family Office Benchmarking: Technology in the Family Office
study,
which found that security worries, which apply both to data itself and how it
is communicated, are now mentioned just as often as the issue of technology integration. Meanwhile, according to industry executives, rising risk, complexity and internet exposure are prompting wealthy
families and family offices to pay more attention to their insurance
coverage this year (see feature here).

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