Regulators urge firms to have robust plans in place to recover from attacks
According to Wealth Briefing, which specializes in analyzing the global wealth management sector, taken as a whole, the sector looks set to enjoy robust growth through 2022 and 2023. It is expected to achieve a compound annual growth rate of 7.1 per cent, from now until 2028, the report says.
The sector plays a vital role in managing global financial capital and is expected to be worth US$145 trillion by 2025, according to reports cited by accountants PwC.
The sector is generally split into the ‘human advisory sector’ in wealth management firms, which handles the whole range of personal financial planning, portfolio management and customer services, and the asset management side. This latter is the preserve of active and passive portfolio managers.
The sheer scale of the wealth handled by the sector as a whole makes it a prime target for attack by cyber criminals. PwC points out that firms across the asset management sector have been targeted over the last few years. Ransomware attacks have hit several organizations, and regulators in multiple countries have warned wealth management firms that they need to have robust contingency plans in place to recover from any such attacks.
“Increasingly, cyber criminals are working towards more targeted attacks, choosing larger and more lucrative targets, and spending more time learning about their victims to increase their chances of success,” PwC warns.
The firm points out that there is now evidence that traditional methods of industrial espionage have shifted over to the cyber domain. “Knowledge of future transactions, for example, could result in large financial gain for rival firms or individuals operating in the same market. Similarly, proprietary data such as investment research, predictive models and algorithms are likely to carry a high value to competitors,” the firm notes.
The rise of FinTech – the development of new financial applications such as payment systems, cyber- banking and auto trading systems – is also extending the scope for cyber-crime, PwC adds