Registered investment advisors are increasingly implementing cybersecurity policies as the number of cyber breaches against their firms jumps, according to a just-released poll by the Investment Adviser Association and ACA Compliance Group.
Cybersecurity continues to be the top compliance worry for advisors, with nearly 88% of the 474 advisory firms polled in the joint ACA/IAA 2015 Investment Management Compliance Testing Survey identifying "cybersecurity/privacy/identity theft" as the their top compliance challenge this year.
While cybersecurity topped the list, other compliance challenges for advisors include custody of client assets (identified by 18%), advertising/marketing (23%), fraud prevention (13%), disaster recovery (17%) and compliance with the Foreign Account Tax Compliance Act (FATCA) at 12%.
The IAA/ACA compliance survey comes as more than 3,000 financial institutions have applied for .BANK domain names after the general availability period for the domain names began Tuesday.
The Financial Services Roundtable is a lead supporter, investor and founder of the .BANK domain, which is a new online bank community that uses enhanced security requirements and stringent verification standards to provide banks and their customers with a safer place to do online business.
Chris Feeney, president of FSR's cybersecurity and technology policy division (BITS), says the move by banks "clearly signifies the dedication and importance banks place on improving protections for their customers' sensitive information from the growing threat of cyberattacks." Feeney said that .BANK online space "has more than 30 enhanced security requirements that are specially designed to create a trusted, verified and more secure location for online banking business."
As to advisors, the IAA/ACA poll, conducted online from April 27 through May 22, found that more than two in five (43%) report having a formal, written, standalone cybersecurity program, while another 42% have formal cybersecurity policies and procedures that are incorporated into broader programs.
The incidence of cyber breaches has also jumped, with 15% of advisors reporting being the victim of a cybersecurity breach in the past 18 months, up from 11% last year.
The advisory firms also reported increased compliance testing in the following areas: cybersecurity/privacy/identity theft (67.9%); advertising/marketing (43%); personal trading/code of ethics (34%); disaster recovery planning (35%), and best execution (32%).
