As we near the end of 2020, leaders and in all sectors — from politics to the financial world to the media to healthcare — are taking stock of what influenced their bottom line, what drove the markets and what shaped the world over the past 12 months. While COVID-19 has clearly been the driving story of the year, it was cybersecurity that was at the top item of concern for global family offices.
A global family office simply refers to private companies that manage the business and financial concerns of wealthy families. These often mean those who hold more than $100 million in investable assets. A survey of 78 of these family offices that serve more than 800 households globally— yes, think $200 billion in total assets — found cybersecurity was the chief concern of the year, Barron’s reports.
The survey found that 60 percent of these companies cited cybersecurity fears at the top of the list. Additionally, the financial news journal reports that 96 percent said they have experienced at least one cyberattack. That’s a high percentage.
In an interview with PWC, Danielle Valkner, a family office leader, discussed exactly what’s at stake for these high-profile firms:
“Many organizations are vulnerable to cyberattacks⎯but wealthy families are particularly attractive targets in the eyes of cybercriminals. What’s more, the threat is often increased by the fact that family offices may be unaware just how much of their family members’ personal information is publicly available, meaning it can be easier than many people realize for fraudsters to piece together disparate data points, steal identities and launch sophisticated criminal attacks,” she said. “A further factor is that family members may be early adopters of leading-edge technologies⎯including connected devices⎯which may not yet have robust protections for cybersecurity and privacy built in.”
If you are a firm managing a substantial sum or a high-net-worth individual reading this, what should you consider? Valkner stressed that family offices need to be “proactive rather than reactive.” She suggested these organizations practice “robust cyber hygiene” and should put in place a “strategic plan” to address any future cyber threats.
Some of her suggestions include:
- Firewalls: She calls these a “foundational element of network security strategy.” They should be installed between the network at large and the Internet.
- Appropriate configuration: An improperly configured network appliance can be as useless as one that has no controls installed at all. All companies of any kind — but especially those dealing with such important investments — should review their firewall configurations regularly.
- Use a managed service security provider: Use a separate provider to set up and monitor all your network security appliances. Some family offices might not have the in-house, robust cybersecurity experts to make all this possible.
- Encryption is key: Use encrypted Wi-Fi protocols like a WPA-2 or WPA-2 Enterprise. This will protect your wireless networks from any unauthorized, third-party user. Any visitor to a family office should be given an alternate “guest Wi-Fi network” that’s outfitted with Internet access.