Asset Managers Beef up Cyber Defences as a Priority New industry Survey Reveals
- 13.03.2018 08:32 am
A new report from Osney Media and BackBay Communications reveals that improving cybersecurity is one of the key business priorities for asset managers this year in response to a greater perceived threat of cybersecurity attacks. The report, based on a survey of global asset managers being launched today at The Summit for Asset Management (TSAM) in London, reveals that cybersecurity improvements are a key business priority for 33% of asset managers.
Two-thirds (65%) 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% 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% 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 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 organises 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 reveals that 66% 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% planning such a project. The main reasons cited for such projects were to improve or automate middle- and back-office processes (71%), improve fund distribution and enhance the client experience (65%), and improve research and investment decision-making (35%).
Gender and diversity
Other findings from the survey reveal that the vast majority (78%) think their organisation has a ‘good’ or ‘very good’ approach when it comes to promoting gender equality and diversity, with around one in three (34%) saying that their organisation has policies in place to encourage women into senior positions.
Respondents are, however, less positive about the asset management industry as a whole when it comes to gender and diversity. More than one in three (35%) respondents describe the industry’s approach to gender equality and diversity as ‘poor’ or ‘very poor’, with only 6% describing it as ‘very good’.
Bill Haynes, CEO and founder of BackBay Communications, the financial services marketing and communications consultancy that conducted the research, said: “Gender equality and diversity is a huge topic in the industry right now. We were surprised to find such a big discrepancy between respondents’ views of their own company and the industry in general. This might be to do with the fact that historically such issues have been dealt with at a company level and that a co-ordinated industry-wide effort is only just developing.”
Jonathan Wiser, Director at Osney Media, added: “The industry is moving in the right direction regarding gender equality and diversity; but of course, more can be done across the board (and actually, also at board level). Increasingly firms are rolling out projects and initiatives, which is encouraging. We believe that moving forward, the asset management industry could become the role model across financial services, and moreover, should strive to be.”