Along with exciting opportunities to grow their clients’ wealth, this data availability brings wealth managers significant responsibilities to protect their clients’ most sensitive information from attackers. Read on to learn about six key criteria for evaluating whether a wealth manager is meeting these responsibilities.
Broadly speaking, a wealth management firm’s overall cybersecurity stance can be judged by both the security features of its technology as well its organisational practices around how its team and clients use this technology. Even if you are not technology expert, you can quickly assess how well a wealth manager will protect your data by asking a few simple questions about the precautions the firm is taking with respect to:
01 Encryption
Robust data encryption ensures that even if unauthorised access occurs data remains indecipherable. Advanced encryption techniques are vital for safeguarding sensitive financial information.
Wealth managers have a variety of encryption standards and approaches to choose from when designing their systems; be sure to ask which ones they selected and why. Many developed nations require financial service providers doing business in their jurisdictions to use a certain encryption standard. You might ask, for example, if the wealth manager’s encryption is compliant with German or Swiss standards.
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Even if you do not understand the technical jargon in a potential answer, a well thought-out rationale will indicate that effort has been put into addressing this non-negotiable aspect of financial data security.
02 Multi-Factor Authentication (MFA)
MFA adds one or more extra layers of security by requiring users to provide multiple forms of identification before granting access. This is crucial for limiting unauthorised entry. Ideally, a wealth management firm’s system will require at least two-factor authentication for access.
Note that to access the Altoo Wealth Platform, three-factor authentication is required with a single-device security certificate, a mobile authentication app, and a personalised password.
03 Regular Software Updates
Cyber attackers are constantly exploring new ways to exploit systems. Software updates help patch vulnerabilities that hackers may target. Keeping all wealth management software up-to-date is vital. Simple questions to ask a wealth management firm in this respect are if there is a formal requirement in place for its team to install software patches and how often these patches are rolled out.
04 Employee Training
Human error is often a leading cause of security breaches. Educating employees about potential threats – especially related to social engineering, in which an attacker may pose as a client who has lost a password and needs assistance, for example – and best practices can prevent many intrusions. Here, you may ask how often the wealth managers’ team undergoes such training.
05 Role-Based Access Controls
By limiting data access to only those who need it, the risk of unauthorised users or accidental data exposure is minimised. When considering this point, think in advance about how many access levels will be necessary in your case and make sure the wealth manager’s system can accommodate them all.
06 Ongoing Monitoring
Many modern wealth management solutions include security monitoring tools that keep a constant eye on the system. This real-time monitoring can detect unusual activities and provide alerts. Be sure to whether such a system is in place when evaluating a wealth manager’s technology setup.
Proper cybersecurity requires an ongoing commitment to keeping up with the ever-changing landscape of technology and the persistent ingenuity of cybercriminals. With a proactive approach and the right tools, wealth managers can protect high-value assets and ensure the safety of their clients’ financial future. Be sure your wealth manager is doing so.
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