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Technology Executives Are Very Concerned About Cybersecurity, And Financial Services Execs Should Be Too

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A recent CNBC survey of 100 technology executives found the threat of cyber attacks is by far the biggest risk to their companies this year.

Forty-five percent of respondents cited cybersecurity as their No. 1 concern, more than the combined answers of meeting customer demands (19%), finding qualified employees (14%), and upgrading outdated IT infrastructure (10%). 

It makes some sense that technology executives would be a little more concerned about technology-related risks, but cybersecurity is an issue across the board. 

There have been more than 10,000 data violations in the U.S. alone since January 2018, resulting in 10.7 billion exposed records, according to Comparitech. And nearly half of Americans have been exposed to some sort of cybersecurity threat, according to SafeSmartLiving. 

But outside of maybe healthcare, there’s no other industry where consumers’ sensitive information is more exposed than financial services. 

A report published in April from cyber intelligence firm Insights found that over 25% of all malware attacks target banking and financial services, more than any other industry. And according to Monica Pal, CEO of identity intelligence company 4iQ, the number of compromised credit cards, credential leaks, and instances of malicious apps have all more than doubled year-over-year in 2019. 

While this isn’t a new issue, the pressure on financial institutions to ratchet up their defenses from a cybersecurity attack has increased dramatically in recent years, according to Darren Conte, CEO of secure document storage, sharing and messaging website Siftsort. 

“Cybersecurity has always been a high priority for financial institutions, but as technology becomes more convenient for the client to connect to their financial institution or advisor, the risks increase as well,” Conte said.  “The reputational risk [and fines] are huge, so firms spend a lot of money to ensure they have a watchful eye on both internal and external threats,” Conte said. 

And the SEC has taken notice. The Office of Compliance Inspections and Examinations highlighted cybersecurity as a priority in 2019 and has so far issued three risk alerts this year to financial advisors around the use of social media and remote email, customer data privacy, and cloud-based storage. 

“Information security best practices should be a constant and evolving effort by the firm to train employees and certify that vendors are compliant too,” Conte said. “Each person must play a part because they are the difference between exposure or protection of the firm’s information, clients and reputation,” Conte said.

To put the exposure of this industry in perspective, the graphic below shows the biggest data breaches in the U.S. since 2013. Scottrade, JP Morgan Chase & Co (NYSE: JPM), Equifax Inc. (NYSE: EFX) have all been victims of large-scale attacks. 

History of Major Data Breaches Infographic
Source: Safe Smart Living

Posted-In: Financial Advisors Fintech News Topics SEC Markets Tech General

 

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