How ready are institutional investment firms to prevent data breaches and mitigate damage in the event of a cyberattack?
On Tuesday, Backstop Solutions Group, which provides cloud-based solutions for institutional investors, reported that 77% of respondents in a new survey considered cybersecurity as at least “an important” priority in their firms.
More than a third of respondents claimed cybersecurity was a top priority, while only 4% minimized its importance.
Backstop questioned leading institutional investors about their firm’s budget allocation to address new threats and their confidence in their firm’s ability to recover from a potential attack as a way to allow them to benchmark their preparedness against their industry colleagues.
“As cybersecurity threats continue to rise, the financial consequences of a breach can wreak havoc for fund managers and multi-managers,” Backstop’s global marketing manager, Chris DeNigris, said in a statement.
“Institutional investors have proprietary client information, and not having preventive measures in place can lead to long-term reputational damage for the firm.”
Cybersecurity experts recently discussed best practices for responding to and lessening the effects of cyberattacks.
Forty-three percent of institutional investors in the Backstop poll said their firm had increased its budget for cybersecurity in the last year, including outlays for prevention.
Awareness of the importance of cybersecurity and taking steps to bolster it, however, are not the same as being well prepared for the ever-present danger of an attack.
Less than a fifth of institutional investors polled said they had complete confidence in their firm’s plan to recover from a cyberattack.
And more than a tenth of respondents said they lacked confidence in or had no transparency around their firm’s recovery plan.
“With barriers to entry getting lower, the threat of cyberattacks is only growing,” Michael Neuman, Backstop’s head of information security, said in the statement.
“It’s crucial that firms look at their preparedness and create an integrated plan that readies the company to fight these attacks.”
— Check out Are Retirement Plan Fiduciaries Required to Prevent Cyberattacks? on ThinkAdvisor.