Wealth managers drowning in cyber risk

Wealth managers are struggling to bed down cybersecurity basics amid a deluge of breaches exposing critical vulnerabilities in governance and risk management policies and an overall lack of urgency in tackling the issue.

- Karren Vergara

Magellan Financial Group is the most recent victim of bad actors targeting financial services companies, announcing on August 8 it experienced a ransomware attack from the group d4rk4rmy.

Fortunately for the fund manager, there was no evidence of a breach that compromised its systems nor any evidence of stolen data.

The same could not be said about the 10 members of AustralianSuper who collectively lost $750,000 from a cyberattack in April. Cbus, Insignia Financial, Hostplus and Australian Retirement Trust also fell prey to the coordinated credential stuffing attempts - but ultimately came out unscathed.

Nigel Phair, a professor at Monash University's department of software systems and cybersecurity, sees too many financial services firms struggling with basic cybersecurity measures.

"Financial institutions are more prey to cyberattacks because they are the custodians of wealth and have to react quickly. When it's a public-facing organisation, it raises the bar on cybersecurity [precautions]," he says.

In his research, Phair calls out "cyberwashing" in the same way that some organisations are greenwashing.