Cybersecurity firm Entreda said Thursday that it was rolling out Red Flags Safeguard software, along with Red Flags Data Theft Insurance. Both aim to help advisors, independent broker-dealers and RIA firms avoid issues like identity theft and client-data breaches tied to vendors, as well as fines and other fallout from regulators.
The news comes less than a month after the Securities and Exchange Commission reached a $1 million settlement with Voya Financial Advisors over cybersecurity failures that led to the compromising of thousands of clients’ personal data.
“We are very excited to release our Red Flag package, which we’ve been working on for some time,” said Entreda co-founder and CEO Sid Yenamandra, in an interview with ThinkAdvisor. “We are very focused on the independent wealth management industry and are growing rapidly.”
The business got started about seven years ago, and about one-fifth of sales are in the financial-services field, Yenamandra explains. It works with 25 broker-dealer clients and several hundred RIAs with a total of about 60,000 advisors; customers include ProEquities, which has some 700 advisors, and United Planners.
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“Our software sits on advisors’ mobile and desktop devices and acts like a sensor by gathering data and evaluating risks, including those the network and other users, too,” according to Yenamandra. “It means advisors and firms can get risk data in real time.”
For instance, an advisor using an open Wi-Fi network at Starbucks automatically would get a cyber-risk score, and a virtual private network would open to make sure her work was done on a compliant network.