financial advisors cyber attacks cybersecurity

How Can Financial Advisors reduce the Risk of Cyber Attacks?

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Key Highlights:

  • Financial advisors are concerned about cybersecurity issues as they can breach client’s essential data.
  • Cyberattacks can affect the investments advisors make on behalf of the client.
  • Depending on the industry, some companies may have to deal with more issues compared to others.

Emerging Cybersecurity Threats

Financial advisors are scrutinizing cybersecurity on different levels. They are concerned about the negative effects of cyberattack on client’s confidential data. In a summit, Equifax chief information security officer, Jamil Farshchi’s said, “The sectors including health care, manufacturing and energy are at great risk in terms of cyber security breach.” He further adds, “These industries are not focusing on the risks brought by cyberattack and will have to deal with them, if they don’t secure the data.”

One of the speakers of the summit, Mr. Carmakal said, “Depending on the industry, some companies may have to deal with more issues in comparison to others.” Mr. Carmakal was addressing the health care, energy and manufacturing industry. The companies who had suffered cyberattack are more likely to fathom threat in comparison with unaffected companies, he added.

Five Ways of Negating the Cybersecurity Threats

Cybersecurity plays a vital role in the profession of a Financial Advisor. A survey conducted in 2019 suggests that around 4.1 billion personal records were hacked and released publicly. The financial sector is increasingly becoming a major target of cyber attackers.

Following ways can reduce the risk of cyberattack:

  • A financial advisor needs to be aware of tackling strategies. The strategies should be upgraded as per client and firm’s security.
  • Teaching employees about how to prevent and deal with cybersecurity threats is the most efficient way. The business empire has many departments, but if employees are well educated, they can solve any ambiguity on their own. This will be time efficient and can prevent fatal errors.
  • Third-party vendors need to be reviewed. One needs to have information regarding vendors’ cybersecurity plan, vulnerability testing and protocols of data breach. The vendors should have a safe, yet separate hosted environment. A vendor should be able to elucidate about all security practices as well.
  • The phishing attack is the most common form of attack, where hackers email through a known sender and after getting all the public details, they demand for the confidential information or ransom. One can prevent this attack by creating their own electronic communication guidelines.
  • Organizations should encourage employees to participate and practice all the possible scenarios. This practice will create awareness among employees and will help in reducing unauthorized access.

Also Read: Emergent Cybersecurity Companies 2021



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