Individuals and businesses in the U.S. reported a record high number of data breaches in 2016, and that trend is likely to continue.
Totals surpassed the 2015 all-time high number by 40 percent, according to the 2016 Identity
Theft Resource Center Data Breach Report. Of the nearly 1,100 cybersecurity incidents reported, 45 percent occurred within the business sector of the economy. Hacking, skimming, and phishing caused 55 percent of the breaches and cost Americans billions of dollars in damages (figure 1). By 2019, the global cost of cybercrime is estimated to reach $2 trillion.
Online criminals attack without discrimination; anyone with an online presence is vulnerable. The concern spans all age demographics with over 80 percent of individuals concerned about cybersecurity and the protection of financial assets, according to a recent investor survey from financial data and software company FactSet and market research and strategy consultancy Scorpio Partnership (figure 2).
Financial institutions, as well as individuals, must take proper steps to safeguard financial information from online attacks. Organizations should provide multiple layers of security, and individuals should take great care to protect personal information. Investors should inquire about what safety precautions their financial services institution takes to protect client assets. To provide clients with peace of mind, Trust Point utilizes several methods of protecting client information, including internal and external audits, internal access restrictions, and multi-factor authentication procedures.
The first method of safety includes not one, but three separate audits. To protect against insider theft or fraud, or to discover any online breach that may otherwise go undetected, Trust Point employs dedicated individuals to continuously audit accounts. In addition to this ongoing internal audit, there are two external audits: one conducted by the State of Wisconsin every 18 months, and a second audit performed on an annual basis by an independent third-party auditor commissioned by Trust Point.
Regular audits of client accounts provide one level of safety. In addition, Trust Point grants employees only limited access to internal systems based upon the information needed to perform their specific job function. Access to information is restricted by geographic location and department. In addition, Trust Point restricts access to removable media such as USB keys and external hard drives.
The third method of safety is the use of multi-factored authentication for online access. Clients viewing account information online must complete several steps of verification to access online accounts. Once permitted access, clients may only view account information and cannot make any changes to the account. This multi-factor authentication adds additional hurdles for any cybercriminals attempting to access financial data.
Although Trust Point and other investment firms implement safety measures to protect from cybercrime, each individual investor has an inherent level of personal responsibility to protect his or her online accounts. The Federal Trade Commission website, ftc.gov, offers some helpful tips to secure online information in its “Tips & Advice” section.
Through the evolution of technology, investors can now conveniently monitor accounts, communicate more effectively, and access educational opportunities like never before. Such benefits will make it almost impossible to avoid the online world.
Considering the rapid increase in cyber attacks in the recent past and the level of concern felt by investors, individuals should proactively inquire about the safeguards used by their financial institutions, and should also practice caution when it comes to personal and financial information.