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Tags: Financial | Experts | Investors | Cybercrime

Financial Experts: Investors, Protect Yourselves from Cybercrime

By    |   Tuesday, 02 September 2014 10:04 PM

Cybercrime is on the rise and investors need to be proactive in protecting their assets, financial experts warn.

Cybercrime and cyber security are major issues for banks, broker/dealers and asset managers.

Altogether, financial services providers are probably facing millions of attacks each day, Karl Schimmeck, managing director of financial services operations for the Securities Industry and Financial Markets Association told Morningstar.

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Bank accounts are federally insured, but there is no rule that requires investors to be reimbursed for losses related to cybercrime, Gerri Walsh, senior vice president of investor education at the Financial Industry Regulatory Authority (FINRA) also told Morningstar.

He urges investors to be suspicious and careful.

Cybercriminals are phishing

According to Walsh, Symantec, a security software firm, recently reported that 71% of phishing scams were pretending to be banks and other financial institutions. Phishing scams are a common tactic used to steal personal information.

Usually what happens is someone receives an email that looks like it's from a well-known financial institution. It has an official name and logo, Walsh explained, and it generally asks the recipient to complete some type of action, such as providing updated information or clicking a link.

The sender doesn't actually know who has an account with that firm. He's just hoping someone will take the bait.

Financial institutions don't generally request client information or make important announcements, such as notification of a compromised account, via email, says Walsh. So that's an initial red flag.

Another red flag is the lack of personal information, such as a nebulous greeting like “Dear customer.”

Sometimes you can hover your cursor over the sender's address and see the email isn't coming from where you think, Walsh added.

Anyone who receives such an email should contact the firm in question using outside contact information, such as the telephone number on the website. Never use the contact information in the email, Walsh warns.

Combating hackers

Walsh also warns investors to take precautions against hackers.

If you're connecting with a financial institution or paying a bill online, never use an unsecured Wi-Fi connection because hackers can go in a scrape your personal information.

Even on a secured connection, make sure you have a firewall and the latest version of your browser.

Make sure you have all the patches for any Internet programs you use and keep your antivirus and malware protection up-to-date.

Don't email sensitive information, such as credit card numbers. And make sure your computers and mobile devices are password protected, he added.

Keep the pros in line

Banks, broker/dealers and asset managers are fully aware that cybercrime is one the top risks they face.

Investors should be asking questions to ensure their financial services providers are acting prudently, said Schimmeck.

Investors should ask whether their financial manager is using two-form authentication and ask how information is shared, he told Morningstar.

Investors don't like to think about cybercrimes at financial institutions but it's likely to happen, Marketwatch says the International Organization of Securities Commissions has warned.

Chairman of the Board Greg Medcraft said the lopsided manner in which cyber threats around the world are being dealt with is setting up the world’s financial players for some major pain.

“The next black swan event will come from cyberspace. It is important that we pay attention,” he said.

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Finance
Cybercrime is on the rise and investors need to be proactive in protecting their assets, financial experts warn.
Financial, Experts, Investors, Cybercrime
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2014-04-02
Tuesday, 02 September 2014 10:04 PM
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