Asset managers beef up cyber defences
March 13, 2018

Improving cybersecurity is one of the key business priorities for asset managers this year in response to a greater perceived threat of cybersecurity attacks, according to a new report from Osney Media and BackBay Communications.

The report, based on a survey of global asset managers being launched today at The Summit for Asset Management (TSAM) in London, shows that cybersecurity improvements are a key business priority for 33 percent of asset managers.

Two-thirds (65 percent) of the senior asset management professionals surveyed believe that the threat posed to their organisation from cyber crime this year is greater than in 2017; this compares with just 2 percent who said it is less of a threat. As a result, investments to improve cybersecurity measures by the asset management industry are anticipated to rise, with 50 percent of respondents saying their organisation plans to increase expenditure in this area in 2018.

The findings follow a spate of high profile and disruptive cyber attacks and data breaches in 2017 across a number of sectors, including financial services. With millions of trades placed each day and huge amounts of financial data held by asset managers, it is a sector considered to be at particular risk. Indeed, in a September 2017 statement, SEC Chairman Jay Clayton, said: "Cybersecurity is critical to the operations of our markets and the risks are significant and, in many cases, systemic."

For firms with clients and operations in the EU, the introduction of GDPR, the new European general data protection regulation, in May is also likely to sharpen their focus on cybersecurity. Under new rules, regulators are able to impose fines of up to 20 million to firms that fail to report cyber attacks within 72 hours.

"Cybersecurity is clearly in focus for asset managers right now," said Jonathan Wiser, Director at Osney Media, which commissioned the study and organizes TSAM London. "Not only is it firmly on the agenda for regulators, but with the vast majority of firms turning to technology to enhance the services they offer to customers and drive down costs, they need to make sure they have appropriate cyber defences in place. The potential operational and reputational risks from a breach are immense."

The research suggests that 66 percent of respondent firms are currently undergoing a digital transformation project - to incorporate new technologies into the heart of their business operations and processes - with a further 18 percent planning such a project. The main reasons cited for such projects were to improve or automate middle and back office processes (71 percent), improve fund distribution and enhance the client experience (65 percent), and improve research and investment decision-making (35 percent).





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Improving cybersecurity is one of the key business priorities for asset managers this year in response to a greater perceived threat of cybersecurity attacks, according to a new report from Osney Media and BackBay Communications.

The report, based on a survey of global asset managers being launched today at The Summit for Asset Management (TSAM) in London, shows that cybersecurity improvements are a key business priority for 33 percent of asset managers.

Two-thirds (65 percent) of the senior asset management professionals surveyed believe that the threat posed to their organisation from cyber crime this year is greater than in 2017; this compares with just 2 percent who said it is less of a threat. As a result, investments to improve cybersecurity measures by the asset management industry are anticipated to rise, with 50 percent of respondents saying their organisation plans to increase expenditure in this area in 2018.

The findings follow a spate of high profile and disruptive cyber attacks and data breaches in 2017 across a number of sectors, including financial services. With millions of trades placed each day and huge amounts of financial data held by asset managers, it is a sector considered to be at particular risk. Indeed, in a September 2017 statement, SEC Chairman Jay Clayton, said: "Cybersecurity is critical to the operations of our markets and the risks are significant and, in many cases, systemic."

For firms with clients and operations in the EU, the introduction of GDPR, the new European general data protection regulation, in May is also likely to sharpen their focus on cybersecurity. Under new rules, regulators are able to impose fines of up to 20 million to firms that fail to report cyber attacks within 72 hours.

"Cybersecurity is clearly in focus for asset managers right now," said Jonathan Wiser, Director at Osney Media, which commissioned the study and organizes TSAM London. "Not only is it firmly on the agenda for regulators, but with the vast majority of firms turning to technology to enhance the services they offer to customers and drive down costs, they need to make sure they have appropriate cyber defences in place. The potential operational and reputational risks from a breach are immense."

The research suggests that 66 percent of respondent firms are currently undergoing a digital transformation project - to incorporate new technologies into the heart of their business operations and processes - with a further 18 percent planning such a project. The main reasons cited for such projects were to improve or automate middle and back office processes (71 percent), improve fund distribution and enhance the client experience (65 percent), and improve research and investment decision-making (35 percent).



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