SEPTEMBER 1, 2017 • MARK HURLEY
Remember “Disco Inferno” and “The Hustle” and the “anything goes” promiscuous lifestyle of the late ’70s? All of that did not end very well, as the world learned that all behaviors are accompanied by their own set of—potentially very bad—consequences.
This good general rule of life somehow was forgotten in the Internet Age. Suddenly, we were in a “New Economy.” Everyone was going to be connected and share information—an electronic “anything goes” era in which convenience and access were far more important than safety. If you think about it, there are probably more than a few eerie parallels between the way people have approached using the internet over the last 25 years and how they thought about sex in the late ’70s.
But the recent WannaCry ransomware attack (which briefly shut down millions of computers around the world), along with the hacking of political campaigns, government agencies and Fortune 500 companies, is probably only a sniffle compared with what is to come. Someday, hackers will release an unstoppable computer virus or malware. And the only real protection will be responsible behavior.
Internet theft is now a very big business—in many cases, it’s done by government-funded and operated businesses. The stereotypical hacker is no longer an overweight, personality-challenged geek living in his mother’s basement. In fact, hackers, virus makers and other cyberterrorists in countries such as China and Russia openly work in large office buildings as part of organizations designed to steal money or spread mayhem.
Unfortunately—and this is particularly surprising to anyone who follows this industry—very few wealth managers seem to recognize the magnitude of this threat to their livelihoods. Their firms are particularly attractive targets for bad guys because their clients’ non-public personal information (Social Security numbers, account info, etc.) is regularly sold in aftermarkets (known as “darknets”) to organizations that use it to loot bank and brokerage accounts, steal credit cards and tax refunds.
Typical wealth management firm clients have substantial amounts of liquid assets and robust credit, so their data can be sold for a high price—in fact, on the dark web they are referred to as “whales.”
The wealth management landscape is littered with firms—including some of its largest and most sophisticated—that have already been hit. The CEO of one multibillion-dollar firm recently clicked on a link in an e-mail and all of his clients’ e-mail addresses were exported. Another big firm discovered that hackers seeking client information were sending e-mails appearing to be from people inside the firm. MORE