Family offices, which manage the wealth of high net worth individuals, are increasingly becoming targets for cybercriminals. A recent survey conducted by Dentons revealed that 79% of North American family offices believe that the likelihood of a cyberattack has significantly increased in recent years. With only a quarter of family offices reporting that they have already experienced a cyberattack in 2023, it is evident that the threat is looming large for this sector.
Despite the growing concerns surrounding cyberattacks, family offices are ill-equipped to deal with this threat. The survey highlighted that less than a third of family offices have well-developed cyber risk management processes in place. Moreover, only 29% believe that their staff and cyber-training programs are sufficient. This lack of preparedness is concerning, given the sensitive nature of the information that family offices possess.
Experts have emphasized the importance of family offices taking a proactive approach to cybersecurity. Edward Marshall, the global head of family office and high net worth at Dentons, stressed the need for a shift in mindset from accepting the unexpected to expecting the unexpected. It is crucial for family offices to invest in adequate technology and planning to mitigate the risks posed by cybercriminals.
To combat the growing threat of cyberattacks, family offices should focus on addressing the three main components of tech risk: hardware, software, and applications. The report from EY U.S. and the Wharton Global Family Alliance recommends utilizing secure platforms such as websites or intranet sites for sharing sensitive information. Additionally, implementing password vaults and vetting tech vendors for security can enhance cybersecurity defenses.
The consequences of inadequate cybersecurity measures can be severe for family offices. With hackers increasingly targeting organizations with significant wealth and limited staff, the risks of financial loss and reputational damage are high. Family offices must recognize the urgency of enhancing their cybersecurity defenses to safeguard the interests of their clients and stakeholders.
The escalating threat of cyberattacks on family offices calls for immediate action. By prioritizing cybersecurity measures, investing in staff training, and implementing robust risk management processes, family offices can better protect themselves against potential attacks. It is essential for family offices to adopt a proactive stance towards cybersecurity to ensure the security and integrity of their operations in an increasingly digital world.