Ransomware attack underscores importance of cybersecurity

More than 200,000 computers in 150 countries were sidelined.

May 21, 2017 @ 12:01 am

Financial advisory​ firms, like all businesses, got another rude wake-up call when hackers recently launched a widespread ransomware attack known as "WannaCry."

The hack was noteworthy for the speed and magnitude of its reach. In just a few days, more than 200,000 computers in 150 countries were sidelined. And while the impact in the U.S. was minimal, the attack shows the continued vulnerability of all computer users to hackers and underscores the need to stay one step ahead of those who would cause mischief or worse in our government, business and social institutions.

According to computer experts, one takeaway from the attack is that a lot of the damage could have been avoided had those exploited followed well-known precautions: updating operating systems and installing security patches. One commentator said the WannaCry attack highlights the underinvestment in cybersecurity, and that may be its lasting legacy.

The ransomware attack prompted the Securities and Exchange Commission to issue a risk alert last week to broker-dealers and advisory firms. As part of the alert, the SEC pointed out the findings of recent examinations of 75 firms on cybersecurity preparedness. The SEC found that B-Ds generally were doing a better job than advisory firms in this area. For example, only 5% of B-Ds examined did not conduct periodic risk assessments of critical systems to identify cybersecurity threats, vulnerabilities and business consequences, while 26% of advisers and funds failed to do so.

Along those same lines, the SEC found that only 5% of B-Ds failed to conduct penetration tests and vulnerability scans on critical systems, compared with 57% of advisers and funds.

The SEC's findings should not come as a surprise. B-Ds are generally larger and have more resources to devote to cybersecurity than advisory firms have. But that doesn't mean the threat is any less important for advisory firms. As the most recent ransomware attack made clear, everyone is susceptible. That being said, those that take precautions and remain vigilant with regular maintenance programs in place increase their chances of fending off such attacks.


What do you think?

View comments

Recommended for you

Featured video


3 Questions to ask yourself when making your succession plan

Michael Futterman from Janus Henderson Investors has sage advice for advisers as they approach retirement.

Latest news & opinion

CFA Institute adding crypto, blockchain to curriculum

Subjects will be added to its Level I and II coursework for the first time next year.

Trump tax plan making dividend ETFs hot

Funds that are seeing inflows largely steer clear of sectors like utilities.

Wells Fargo Advisors continues to see a decline in brokers

Company also set aside $114 million over fees for rich clients.

Morningstar to replace funds in its managed portfolios with nine of its own

New sub-advised funds, offered exclusively through financial advisers, are intended to lower costs and provide 'greater flexibility.'

Average client assets top $2 million for first time

Charles Schwab's latest RIA Benchmarking Study reports organic growth is driving increased AUM and revenues.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print