As technology becomes increasingly advanced, cyber security threats and breaches have also become more widespread and destructive. Over recent years, family offices have become one of the main targets of these increasingly pervasive cyberattacks.
Family offices are advisory firms that handle wealth and investment management for wealthy families.
Family office services in Singapore usually offer a totally outsourced solution to handling the financial and investment matters of affluent families or individuals. Due to their nature and job scope, it is not surprising that they are now becoming frequent victims of targeted cyber security breaches. Read on to learn more about cyberattacks against family offices and why cyber security is necessary to safeguard them.
Why Family Offices Are Very Vulnerable to Cyberattacks
There are various possible reasons why family offices are now becoming the usual targets of cybercriminals. However, the most obvious reason is that high-profile family offices have high potential extortion value linked with reputational threats. Because their clientele usually consists of ultra-high-net-worth individuals (HNWI), any data breach incident will surely affect the reputation of a family office.
Moreover, family offices are also quite attractive to cybercriminals due to the high amounts of money involved in their business. These cybercriminals often target the accounting or finance staff and executive secretaries at family offices because of their access to crucial information and systems. For instance, a hacker might impersonate a senior executive and send an email to the finance department and order to conduct a wire transfer.
To this day, around 92% of all malware is still sent via email, often in the form of targeted phishing, and executive email accounts remain largely vulnerable to impersonation by fraudsters. However, new forms of cyber threats, such as crypto-jacking and ransomware, are also popping out and becoming rampant.
Due to the evolving forms of cybersecurity breaches and threats, it has become more imperative now than ever for family offices to invest in cyber security. One of the main reasons this type of firm is susceptible to cyberattacks is that many family offices still do not have a dedicated and comprehensive cyber security policy in place.
As a result, a growing number of family offices continue to be subject to increasingly complex cyberattacks, which usually result in a significant loss of money. In fact, according to a recent study from Campden Wealth and Schillings, about 28% of family offices have already fallen victim to costly cyberattacks, with just a single incident already costing a family $10 million.
Best Cyber Security Practices for Family Offices
1. Educate the family office staff
Educating the staff of a family office on the best cyber security practices is key to preventing cyber security breaches and threats. Family offices and other financial institutions need to have their own cyber security operational practices that can help streamline responses and solutions in case a cyberattack actually occurs. Moreover, they must ensure that they always have effective cyber security protections in place against cybercriminals.
2. Implement a robust incident response plan
Family offices must develop and implement a well-thought-out incident response plan that will help everyone, from the senior executives down to the staff, learn how to respond if their firm falls victim to a cyberattack. Having an incident response plan enables family offices to act quickly and efficiently and prevents them from making hasty decisions under stress, which often only results in more damage.
3. Invest resources in cyber security
With the increasing cyber security threats against them, family offices need to start investing their resources in cyber security, whether this means partnering with an outsourced IT provider or hiring in-house IT personnel. There are many different functions that a dedicated IT staff can provide a family office with, including keeping IT software updated, implementing best practices around passwords and business communication, and more.
Conclusion
Because of the increasing number and growing complexity of cyber security breaches and threats against family offices, implementing effective cyber security systems and practices is undoubtedly necessary for this type of firm. By investing in cyber security, family offices can greatly reduce their risk of falling victim to cybercriminals and increase their chances of responding efficiently to cyberattacks that might occur.
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Because we understand the importance of security in business, we guarantee our superior cyber security protections and practices will allow our clients to feel secure about their data and resources with us. To learn more about our services, feel free to contact us anytime.