Cybertheft is important to all investors, but especially to high-net-worth individuals who might have greater exposure, less knowledge and more endpoints of access for thieves, according to Aon’s Cyber Solutions CEO Jason J. Hogg.
In fact, more than half of 664 high-net-worth respondents of a 2017 Aon online survey said they had either experienced a cybersecurity event or knew someone who had.
Most interesting to Hogg was the survey found that 77% of respondents were concerned about risks posed to their finances by cybersecurity, and 78% were concerned about related issues on identity theft, numbers far above traditional financial worries such as market volatility (60%), or changing interest rates (39%).
“People are more concerned about cybersecurity than they are with regard to their actual wealth,” Hogg told ThinkAdvisor. “That was incredibly telling and most resonating to me.”
Despite the high levels of concern with cybertheft, 55% of those surveyed didn’t know about cyber insurance, and only 5% had a solution in place in case they were attacked. Instead, most relied on virus and malware protections. But that doesn’t go far enough, Hogg said.
“Some tactical things people can do is making sure they have banking alerts set up so that if any type of financial transaction or activities [occur], they receive notification,” he said. He added that investors should work with credit bureaus to “lock up” their information.
“Also, people do not take their password management as seriously as they should; they need to make sure they have multi-factor identification across all accounts, that’s critical,” Hogg said. “That’s something that is quite simple and is not taken advantage of … they are embedded in services [like Google], and there is the capability that people can turn them on.”
From a home perspective, people need to separate their business from home networks, as well as business activities from guests, internet devices and even kids. The study found that only 31% of HNWIs use endpoint protection, and only 25% use identity protection services.
“Often times, high-net-worth individuals have digital footprints akin to a small business,” Hogg said. “There’s a whole series of services and measures they can take, such as risk assessment, to understand where vulnerabilities are, and being proactive to close those vulnerabilities, whether it’s their home network or social media or passwords, for example.”
He also recommends educating children to the ramifications of what they are doing on different devices, especially with the “proliferation in the past five years” of endpoints. These include the usual suspects, such as computers and smartphones, but now include Alexa-type products, cars and even some appliances. Parents also should “give guidance on what kids can and cannot share [on social media].” Further, at least one parent should monitor a child’s social media, and if they see the wrong type of behavior, change it, he said.
Hogg wasn’t surprised that the survey found that a majority of respondents thought that banks, wealth management companies and credit card firms were the most “trustworthy” when it came to cybersecurity. “I’ve spent a good portion of my career in banking, payments and credit card industries, and it makes sense because when dealing with people’s money, that’s the first frontier of the cyberbattle … so as a result, they have been working the longest, ….[so have] best in class security measures and methods.”
However, he does state that advisors, who he calls “nodes” as they handle so many clients, need to “take note of the responsibility they have in helping to play a role in securing their clients information and help in educating them with regard to best practices and what tools are available,” he said.
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