Why Family Offices Need To Prioritize Cyber-Security

Cyber-crime statistics indicate that family offices are becoming more frequent victims of targeted data breaches, often wreaking havoc on systems and posing a significant reputational and financial risk when sensitive information is accessed. Twenty-eight percent of international families, family offices and family businesses have already been victims of cyber-attacks, according to a new study from Campden Wealth and Schillings, with just one incident costing a family $10mn. Considering that almost 50% of Ultra High Net Worth family wealth is being managed through Family Offices, it is critical that adequate measures are put in place to defend these firms from the growing threat of increasingly sophisticated cyber-attacks.

Projections indicate that the global cost of cyber-crime could reach a staggering $6 Trillion by 2021, with up to 90% of all companies falling victim to cyber-attack. Emile Salawi, Head of Family Offices BNP Paribas, stated in a recent interview: “ Today, Cyber-security is one of the three most important focus areas for Family Offices. Traditionally, families have relied on banks to exercise necessary governance and compliance requirements when it comes to protecting information and funds, but the time has come for families and family offices to take more responsibility for the protection of their own data, with consideration to the entire information and document flow”.

It Starts With An Email

92% of all malware is still delivered via email, mostly in the form of targeted phishing attacks, the intent being to trick recipients to download an attachment or click a link. Additionally, executive email accounts are often compromised, allowing fraudsters to impersonate individuals who have the authority to instruct wire transfers or obtain confidential information.

Brand New Threats

On a daily basis, new threats like Ransomware and Cryptojacking seem to pop out of nowhere, making the viruses from yesteryear seem like child’s play. Ransomware, those malicious programs that encrypt your files then demand bitcoin payment to restore them, received much attention in 2017 due to the NotPetya outbreak. The financial impact of this form of malware is often underestimated as the direct ransom cost is estimated to represent only 10% of the full productivity impact. Despite all the hype and publicity around ransomware, by the end of 2017 it was Cryptojacking that had become the most popular form of cyber-crime with 90% of remote code execution attacks involving the unauthorized use of other people’s computers to mine cryptocurrency.

Social Networking

Social networking has fast become the preferred communication platform for both individuals and businesses, with sites such as LinkedIn, Facebook, Instagram, Twitter dominating the social media landscape. These platforms pose a significant risk to Family Offices with organized criminal networks exploiting this space, extracting sensitive information that could have a devastating reputational impact and even compromise the personal safety and security of family members. – Forbes