Family offices, private equity firms and small to midsize financial services organizations hold special appeal for cyber attackers. They give criminals potential access to large sums like at big banks and institutions, but often lack the same well fortified defenses. In 2017, almost two thirds of all cyber breaches targeted small businesses, up from 53 percent in 2016, according to the Verizon Data Breach Investigations Report.
One reason for the spike is that the cyber attacks have become more organized and sophisticated, levering dark web chat forums and government grade software tools. Even institutions with strong security protocols can be tripped up by attacks on individual employees’ home WiFi, for example. Digital transactions have also increased in number and can be vulnerable to attackers.
The good news is even smaller financial firms can sharply reduce their exposure by taking the right proactive measures.
Consider bringing in outside advisors to conduct a cyber risk assessment across your portfolio, since the board needs to understand those risk factors to make truly informed investment decisions and encourage sound practices across the portfolio.
Finally, don’t let cost be a barrier. Family offices and private equity firms have considerable collective buying power. Purchasing needed security and legal services for both the core and portfolio companies can allow firms to obtain substantial discounts.
The onset of a breach is the very worst time for a business to be scrambling for help. Firms need to line up the right relationships now to ensure they have someone to call and a plan in place when an event does happen. To protect their reputations and assets, family offices and private equity firms need to manage their cyber security as thoughtfully as they’re managing their business interests.
Jim Rosenthal is CEO of BlueVoyant and Austin Berglas is global head of cyber forensics and incident response for BlueVoyant.