What is the role of data security in wealth management? It’s extremely important. Plenty of cybercriminals are targeting financial institutions right now, and wealthy individuals are a promising target. Such customers are also extremely important and more difficult to acquire; hence, you need to build trust, which can be easily broken by insufficient security.
How to protect against such threats? You should opt for more secure solutions, like cloud technology. Another good practice is to include internal protective measures as well since your employees might often be the culprits. Finally, you should review your security regularly and conduct tests with cybersecurity experts. Do you want to learn more? Then read on!
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Why Is Data Security in Wealth Management Software Important?
Naturally, you need to care for data security in any area of your operations since it is required by law, and you want to maintain your reputation as a trustworthy bank. Yet, in wealth management it becomes even more critical. Why? Here are a few reasons.
Client Confidentiality
Affluent customers might often wish for a confidential service. A data leak, on the other hand, may result in them being disclosed. As a result, the customer will lose their trust in your bank and resign from your services.
Asset Security
A data leak might also compromise the investments made by the client.
Client Churn and Acquisition
Wealth management isn’t a common service, so acquiring such clients for your bank is more difficult. You need to do whatever is in your power to prevent customer churn. This includes security – the cornerstone of trust and the building block of loyalty.
Vast Amounts of Data
Data cybersecurity is also important in wealth management because of the many sources (and data) from which you acquire information. A wealth management system serves as a central hub for data, so a compromise equals a cyber-break-in to tens of systems.
Reputation
A financial data leak always receives a lot of publicity, but it becomes a hot topic in all news when it regards the wealthiest clients. What does it mean in practice? Even if it was just a small leak, you might find many customers concerned with the state of your security, hence deciding to churn and join your competitors.
How to Keep Customer Data Secure in Wealth Management?
We established why you need to pay extra attention to data cybersecurity in wealth management systems, but how to do this? Since it all depends on the type of software and hardware you use, we cannot give you a direct outline of actions, we can provide you with useful tips. Take a look at them now.
Choose Secure Solutions
In many cases, you will be faced with several choices in terms of wealth management solutions. Many of them are more secure for customer data in their nature, so… you should opt for these.
This occurs, for instance, when choosing between local and cloud technologies. The latter involves using servers with better, often AI-powered, security software, which would be much more expensive otherwise. Plus, it eliminates the risk of a leak caused by one of your computers being infected with malware, for instance, during a phishing attack – you might get the virus in your local system, but it won’t reach the cloud one.
Focus on In and Out
When thinking about cybersecurity, whether it’s wealth management data security or not, we typically consider external attacks. However, it’s not always the case.
According to Statista, most cyber attacks are actually carried out by insiders. After all, the employees within your organization have access to additional information that they can use to penetrate the system. Therefore, you need to focus your efforts not only on preventing attacks from the outside but also on ensuring that your system isn’t vulnerable if someone is already in it.
Review Your Cybersecurity Regularly
While implementing a strong cybersecurity system is a must, you also must evaluate its performance on a regular basis. This does not mean only monitoring for indicators of compromise (IoCs), but also regular cybersecurity tests.
For instance, you can outsource a cybersecurity specialist every year to conduct penetration testing, which will help you locate any potential flaws in your system. This is effective since such experts don’t simply look through the system – they perform real attacks, so they might spot issues that would remain undetected otherwise.
Additionally, you should perform regular threat hunts and collect threat intelligence.
Get a Ready, Reliable Solution
You may also opt for a secure platform that has proven its effectiveness in numerous leading banks, like LiveBank. Our digital solutions for wealth management will help you keep your data safe from the threats lurking on the internet. Leading banks trust us, and so should you!
The Takeaway
Ensuring the highest level of data security for wealth management is the task of every bank. Yet, with the right approach, regular monitoring, and the best solutions on the market, you can build up a wall that will be almost impenetrable. Remember, trust is the cornerstone of your relationships with clients, so you need to maintain it by providing them with the safest system possible.
You might also read: The Future of Wealth Management: Emerging Technologies and Trends
