A recent advisory from the Swiss Financial Sector Cyber Security Centre, a public-private partnership established to strengthen the cyber resilience of Switzerland’s financial sector, warned that the financial sector, which includes intermediaries, is increasingly becoming a target of cyber criminals by falling victim to cyber-attacks.

Intermediaries: a prime target

Intermediaries can be a preferred target for cyber criminals for several reasons. Firstly, they are typically smaller companies with fewer resources to invest in cybersecurity. This makes them, in general, more vulnerable to attacks such as phishing scams, which are fraudulent attempts by cybercriminals to obtain sensitive information, such as usernames, passwords, and credit card details. They do so by posing as a trustworthy entity in an electronic communication, typically an email or instant message.

Another form of cyber-attacks intermediaries should be conscious of is ransomware – a type of malware that restricts access to a computer system or files until a ransom is paid. The ransom payment is usually demanded in cryptocurrency, such as Bitcoin, which makes it difficult to trace.

Additionally, intermediaries often hold sensitive financial information about their clients, which can be quite valuable to cyber criminals. This includes information like social security numbers, credit card information, and login credentials to commit identity theft, financial fraud, and other malicious activities that can cause significant harm to both client and intermediary.

Finally, as intermediaries often work with a variety of financial institutions, this can make them a potential entry point for attackers seeking to compromise larger banks.

Julius Baer: Helping you to protect yourself and your clients

Julius Baer has been supporting intermediaries in assessing their cyber security measures through a leading cyber risk management company, which offers a range of services, including risk assessments, penetration testing, and vulnerability assessments, to help intermediaries identify potential weaknesses in their cyber security infrastructure.

For this reason, Julius Baer still offers vouchers to interested intermediaries who wish to undergo an independent cyber security assessment. This voucher covers the cost of a basic cyber security assessment, allowing intermediaries to identify potential vulnerabilities in their systems and take steps to mitigate them.

Preventative steps against cyber risks

It is crucial for intermediaries to take cybersecurity seriously and to implement strong measures to protect their systems and data. Preventative steps include implementing multi-factor authentication for all accounts, performing basic cyber hygiene tasks such as patching their systems frequently, regularly backing up data, and educating staff on how to recognise and respond to phishing attacks. It is also important for intermediaries to establish clear protocols for responding to a cybersecurity incident and to have a plan in place for communicating with clients in the event of a breach.

Ultimately, protecting against cyber threats should be a top priority for intermediaries to safeguard their clients’ sensitive information and maintain their reputation. The financial losses, legal liabilities, and reputational damage caused by a cyber-attack can be devastating for both the external asset management firm and its clients. Taking proactive measures to prevent, detect, and respond to cyber threats is key to the long-term success and sustainability of the business.