As the risk of cyber threats grow, fund managers are finding themselves further behind on the ball on adequately ensuring investors that proper steps to establish comprehensive cyber defensive measures are being taken, reports Business Insurance. The cataclysmic Ashley Madison hack revealed over 37 million clients’ personal information, ranging from credit card numbers to home addresses, and now the internet dating site faces a $750 million class action law suit.
In an evolving market where a growing amount of equity is tied intangible assets, such as intellectual property, the imperative to institute strong cyber defense measures is dire. A Brand Finance study estimates that $37.5 trillion of $71 trillion enterprise value is stored digitally and therefore vulnerable to cyber threats.
The landscape of cyber defense is rapidly evolving and growing; The World Economic fund estimates that, “robust protection against cyber risk could add as much as $22 trillion to the global economy by 2020.” However, cyber defense measures are not being implemented in a linear fashion and vary drastically across industries. It is no mystery that banks have lead the way in establishing thorough cyber risk mitigation measures, but other large fund house have lagged far behind. A Reuters survey conducted on 12 of the largest fund house in the UK, Germany, France, and the US revealed only 4 currently identified cyber risk as a top priority.
The threat of cyber-attacks grows each day and fund management firms are having a difficult time establishing clear measures to ensure investors that their equity is being adequately protected against risk. Iain Richards from the Anglo-US fund firm Columbia Threadneedle discouragingly posits that when it comes to assurance against cyber threats, “There’s a scarcity of meaningful disclosure.”