According to Accenture’s Cost of Cyber Crime Study, financial services has been the most attacked industry for two consecutive years, and a Bitglass report discovered that nearly 62% of all data exposed in 2019 came from financial organizations. These sobering statistics have not escaped the attention of the U.S. Securities & Exchange Commission (SEC). Last year, for the fourth year in a row, the agency announced that cybersecurity would be a top priority for its enforcement arm, the Office of Compliance, Inspections, and Examinations (OCIE).
Financial advisors should expect the SEC to continue focusing on cybersecurity controls in 2020 — and no firm is too small to escape government scrutiny. According to the OCIE’s 2020 examination priority list, new investment advisors, along with previously registered advisors who have never been examined, are more likely to be examined this year.
The consequences of being found out of compliance can be quite high, especially if a firm is breached. In October 2018, Voya Financial Advisors was ordered to pay the SEC a $1 million fine due to “deficient cybersecurity procedures” that led to a breach of customer data.
In addition to federal oversight, financial advisors must also comply with state-level regulations, such as New York State’s cybersecurity regulations for financial services companies.
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If your financial advisory firm is confused as to where to begin your cybersecurity efforts, protecting your employees’ passwords is a good start. Poor password security is responsible for 81% of data breaches, and securing your firm’s passwords is easy and inexpensive, especially if your firm is affiliated with LPL Financial.
Keeper’s top-rated password management and cybersecurity solution is now available for a discounted subscription rate through LPL’s Vendor Affinity Program. LPL selects vendors based on their ease of doing business with LPL advisors, along with their ability to meet certain security and compliance requirements. Millions of people and thousands of businesses globally trust Keeper to protect their digital assets and help prevent data breaches.
Learn More During Our Free Webinar
Join Keeper Security and LPL Financial on Wednesday, January 15 at 12:00 p.m. EST for a free webinar on “Avoiding a Data Breach: Solutions to the Problem You Never Want to Have.” Keeper Security CEO and Co-founder Darren Guccione will discuss how effective password management can help financial advisors secure their most important information while enhancing business efficiency. Register now and secure your spot for this educational webinar.