Despite a number of high-profile hacking incidents in the last few years, only 31% of wealth managers in the UK believe their clients are increasingly concerned about data breaches and cybercrime, according to a survey.
GlobalData assessed the views of 358 wealth managers worldwide surrounding the biggest issues in the sector.
The report found 60% of wealth managers, globally, believe that cyber-attacks are increasingly worrying their clients.
Sergel Woldemichael, wealth management analyst at GlobalData, said: “This somewhat nonchalant level of concern among clients mirrors the view of the firms themselves.
“Our data shows that over a fifth of UK wealth managers are not at all concerned about the aftermath of data breaches to their reputations.
“On a global level, the proportion of those who are not worried stands at only 8%.”
Lack of alarm
GlobalData said that the “lack of alarm can be explained by the fact that the UK wealth industry has not seen data breaches related to cybercrime”.
The Panama and Paradise Paper leaks involved the offshore wealth industry, and according to the report, these regions have “been doing well regardless, with high net worth offshore holdings rising since the 2016 leak”.
Daniel Semal, director of technology at Pershing, told International Adviser: “We (Pershing) feel that the threat of cyber-attacks and breaches is increasingly being discussed at a board level within wealth management firms.
“The obvious newsworthy breaches such as Equifax and British Airways, alongside regulator drivers such as GDPR and the re-statement of due-diligence responsibilities over service providers are focusing the C-suite of these firms onto the impact of such events.
“Cyber considerations are impacting technology spend, with respect to protection of self, and also playing a much bigger part in the selection of partners and service providers.”
According to GlobalData, the currently low levels of client concern will not persist.
Woldemichael added: “As even these outside factors can influence consumer concerns, UK wealth managers should not underestimate the risks related to cybercrime and data breaches – not only because of the risk of reputational damage, but also the hefty fines introduced by the GDPR.
“Reassuring clients that companies have relevant security measures and contingency plans in place is critical.”
