Cybersecurity for Investors: Protecting Your Financial Information in a Digital World

When you invest your money, you do so trusting that your investment will be secure. Threats to security are becoming a reality for investors and investment firms alike as identities and account information are stolen every day. As a result of these security threats, there is an increasing need for cybersecurity for investors so that your financial information can be kept safe and free from harm. Keep reading to learn about cybersecurity and how it relates to investing, the SEC proposed cybersecurity rule for investment advisers, as well as to learn some tips to keep investments secure.

What is Cybersecurity?

When it comes to cybersecurity for investors, the practice is much the same for any person or institution as it includes the protection of networks, devices, and data from cyber attacks, which can include breaching confidentiality, identity, or other personal data or information. However, when it comes to investment firms, the threats can be severe and far-reaching. 

Cybersecurity for Investors

Investment firms face the same cybersecurity threats that the average person does, except the impacts can be significant, affecting the entire customer base. Digital currency and account information of customers can be compromised, which is why it’s vital that firms take into account cybersecurity for investors. Investors like you must also use the internet wisely to protect your data from being compromised.

Customer Data

For the customers of an investment firm, personal data is at risk of being leaked in hacking events, including everything from a person’s complete identity to account information. This could lead to identity theft, lost access to funds, and even a loss of funds for the customers. Hackers take this information and often sell it on the dark web for profit, leaving customers with a mess to clean up.

cybersecurity for investors
sec proposed cybersecurity rule for investment advisers

Political Attacks

Unfortunately, the global political climate is somewhat contentious, which means cyberattacks with a political motive are becoming more common, including disabling communication, disrupting financial operations, commerce, and trade. This is why it’s more important than ever for institutions to engage in specific cybersecurity for investors. Institutions should take extra precautions to protect their data and information from being breached, and customers like you need to do your part as well.

Understanding New SEC Regulation S-P

In response to major data breaches, like the recent AT&T data breach, the SEC recently imposed new regulations for financial institutions, amending the previously proposed regulations with the finalized Regulation S-P. Regulation S-P requires three critical components for financial institutions, broker-dealers, investment companies, financial advisors and agents. Customers should know about these policies so that they can have confidence in the investment groups they use.

Incident Response Policy

First, those bound by the regulation must have in place a strong incident response policy that outlines the steps they must take to mitigate a data breach. The policy requires that they have a plan in place to detect data breaches, respond to them, and recover from any damage inflicted. Part of that policy requires institutions and agents to make a timely notice to their customers that includes details of the breach.

Timely Notice

The timely notice that is required must occur within 30 days of the data breach. 

Details

Part of the SEC proposed cybersecurity rule for investment advisers is that advisers and financial institutions must include details of any data breach, including the type of information compromised, contact information for the institution, a recommendation for affected individuals to be vigilant and to review all related account statements, and a recommendation for affected individuals to report any suspicious activity. Furthermore, the institution must supply a copy of the affected individuals credit report, information on how to get a copy of their report in the future, and instructions on how to place a fraud alert on their report. Finally, preventative information must be included in the notice.

What Does Cybersecurity for Investors Mean

When it comes to cybersecurity for investors, investment firms have to protect not just a single individual’s account information, but their entire customer base and funds. This includes protecting their network, affiliated apps, emails, etc. from ransomware, malware, or malicious code that could log keystrokes and thus passwords, identity theft, and more. Cybersecurity threats come from all over, both at home and from international predators.

A data breach could not only be detrimental to each of their customers, but it could impact future business, resulting in reduced customer’s trust and lack of new business, regulatory issues and possibly even fines, and disruptions in operations.

Cybersecurity Risk Management for Investors 

As an investor, it’s important to do your part to protect yourself from cyber attacks. There are a few ways that you can keep your personal information, data, and investment information secure.

Minimize Your Risk

Use strong passwords, use two-factor authentication, and use a secure password manager that will help you remember the strong passwords you set. By engaging in these actions, you are enhancing your cybersecurity.

Secure Networks

Securing your network is a great way to enhance your cybersecurity. Network firewalls provide further security to protect all of your devices, not just one, from hacking attempts. Keep in mind that your data can be online beyond your computer and is present on devices that access the internet like your phone to your smart TV and even refrigerators. 

Recognize Phishing Attacks

Phishing attacks can come by way of email and phone and are attempts to trick users into sharing their information with hackers. These attacks will often send you to log in to a fake website and will record your keystrokes. When you log in to the fake website, the hackers are able to obtain your password and access your information. A good practice is to be sure not to click any log-in links that come from email or text.

Beware of Emailed Requests for Information

You can protect yourself from hacking attempts by recognizing that financial institutions will never email and ask you for sensitive personal information, such as your birthdate, mother’s maiden name, account information, or anything else, really. Most of the time, if your financial institution is emailing you, they will instruct you to log in to your account. As a tip: always open a new tab or browser and log in manually instead of clicking any links.

Invest With a Company That Makes Cybersecurity a Priority

You have choices when it comes to financial advisors. As private wealth advisors with over 35 years of experience, you can trust in the investment direction ACG will take you — and you can count on knowing that we make it a priority to stay on top of cybersecurity for investors. Give us a call today to see how we can help manage your investments!