Cyber security regulation "inevitable"

Cyber security regulation "inevitable"

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Regulation around cyber and data security is "inevitable" according to Dave Palmer, director of technology says Darktrace, a startup that leverages machine learning and mathematics to detect cyber security threats.

However, to really protect themselves from attack asset managers will have to look further than compliance with minimum standards and think about what are the unique critical data assets that most need protecting. 

"Regulation is in this area is inevitable but if complying with regulation is all you are worried about, then you are missing the point," said Palmer. 

"Regulation is likely to be a big driver for investment in cyber security, but the real value lies in protecting the longevity of the fund, namely its reputation and client relationships. More and more, clients want to see that the people that they trust their money with are taking proactive steps to continually monitor the threat environment."

Cyber security is not a problem unique to asset managers, but the focus has traditionally been aimed more at retail banks and larger financial companies, which could make smaller financial firms with valuable assets a soft target, according to Darktrace. Palmer says that the magnitude and range of threats against asset managers are increasing. 

"Asset managers face the same diverse threat landscape as any other organization holding valuable data – including the perpetual problem of insider threat," said Palmer.

"There is no such thing as a typical attack either, so it is becoming increasingly difficult to predict how these attackers will present themselves, it could be a large, highly-organized criminal group looking for financial gain, ideologically-motivated activists aiming to harm the fund’s ability to operate, or even an opportunist within the organisation."

Palmer says that the focus for asset managers should be around brand protection and the longevity of the fund, client confidentiality, securing financial transactions themselves and the resilience of their systems to transact in a timely fashion.

Firstly though asset managers need to get a handle on the cyber landscape and ensure they are employing the best tools and technology for their purposes. 

The key part in their cyber strategy, says Palmer, must be the ability to intervene early if suspicious behaviours are detected within their organisations, in order to avoid a crisis and stay off the headlines.

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