The Importance of Cybersecurity Tools for Financial Planners
Financial advisors and planners deal with and store confidential information that their clients provide. Having that information accessed by an unauthorised party can not only result in a financial loss for the client, but it will also cause severe reputational damage for the advisor and a consequent loss of business. Safeguarding that information is therefore absolutely essential and needs to be a priority for all financial planners and advisors.
Cyber attacks are on the increase and the financial data held by financial advisors is particularly attractive to criminals. The majority of financial institutions have experienced some sort of cyber attack and these have risen dramatically since the onset of the Covid pandemic. Consequently, financial advisors must protect the data they store.
Taking Cybersecurity Seriously
Some financial advisors have few or no cybersecurity measures in place and that is a serious mistake. Clients expect their data to be closely guarded and are likely to steer clear of organisations that don’t do it. It is, therefore, a subject that needs to be taken seriously.
It’s not good enough to ignore security issues because you’re not technical and think they’re not your concern. Clients are increasingly aware of the importance of security and have often experienced data breaches through their social media or other online accounts. They often know what security is needed and will be able to detect if yours isn’t adequate. They will, for example, recognise emails that aren’t encrypted and sign-on procedures that aren’t adequate, leaving their data at risk.
Financial advisors need to treat security very seriously, taking proactive measures rather than simply reacting after a data breach occurs. Many Australian organisations base their security policies on either the Australian Cyber Security Centre’s ‘Essential Eight Maturity Model’ or the American National Institute for Standards and Technology’s ‘Cybersecurity Framework’ (NIST CSF), which is internationally recognised.
The ‘Essential Eight’ is increasingly popular because it is simple, direct and pragmatic, focusing on eight migration strategies that enable effort to be prioritised. This framework is, however, viewed as the minimum level of security whereas NIST CSF is much more comprehensive and focuses on five key areas: identifying threats, protecting against them, detecting breaches, responding to them and recovering from attacks.
One of the best ways to protect against data breaches is to use a comprehensive, multi-factor authentication system that protects against unauthorised access. This generally requires at least two separate types of evidence when logging into an account, which may typically be something a user knows (a password or PIN), something they have (such as a smartcard or a supplied access code) or something personal (like a fingerprint).
Clients are used to providing increased levels of authentication details for other applications, particularly online banking, and will expect it from any organisation that values their privacy. Indeed, a lack of sufficient checks may persuade them they should use a more security-aware organisation rather than risk their personal or financial data being accessed by criminals.
Comprehensive Security across All Data
All financial advisors should undertake a risk assessment to assess their vulnerabilities. They should also have an information security policy and appoint someone to enforce it.
Cybersecurity isn’t just about the processes an organisation has in place but can also include, and be improved by, how its suppliers behave. At TNW Solutions, we provide a paraplanning service where all the data we handle and create is fully protected against cyber criminals.
We use firewalls, banking grade encryption and a variety of agreements and procedures that ensure all sensitive data is fully protected. Since all the SOAs we produce are accurate, compliant, complete and secure, it’s one less topic you have to worry about.
Speak to one of our experts today!