Page 31 - Cerini & Associates Family Office Guide

CYBERSECURITY AND
DATA PRIVACY FOR FAMILY OFFICES:

PROTECTING WEALTH AND PRIVACY IN

AN INCREASINGLY DIGITAL WORLD

1. DEVELOP A COMPREHENSIVE CYBERSECURITY POLICY

One of the first steps family offices can take to protect their sensitive data is to create
F amily offices, which manage the wealth, financial affairs, and personal matters of a clear and comprehensive cybersecurity policy. According to CNBC, less than a third
high-net-worth families, handle vast amounts of sensitive financial data, personal
identification details, and private family information. This makes them a prime of family offices have well-developed cybersecurity policies, leaving them vulnerable. A
robust policy should address the following elements:
target for cybercriminals. Over the last decade, cybersecurity breaches within family
offices have become increasingly common, and statistics show that these offices are often ► ► Password management: Encourage frequent password changes and the adoption of
at higher risk for targeted data breaches. complex, unique passwords. A password manager can help ensure that staff do not
reuse passwords across platforms.
Studies show 28% of family offices and family businesses have experienced cybersecurity ► ► Multi-factor authentication (MFA): Using MFA can add an additional layer of
breaches. Family offices often function with small teams, have access to high-value assets security when verifying wire transfers and other sensitive transactions.
and sensitive financial information, and represent well-known families or celebrities—all
of which make them an appealing target for cybercriminals. Furthermore, unlike larger ► ► Encrypted communication: For high-stakes personal and financial information (like
corporations, family offices frequently lack the robust corporate defenses that mitigate social security numbers or legal documents), encrypted email should be a standard
such threats. practice.
► ► System backups: Regular backups ensure that data is protected in case of cyberattacks
Given these risks, it’s crucial for family offices to implement effective cybersecurity like ransomware.
measures and privacy protections to safeguard not only their wealth but their reputation ► ► Virtual private networks (VPNs): A VPN helps secure remote access to family office
as well. We have outlined five critical areas that family offices should consider when systems, safeguarding against external breaches.
addressing cybersecurity risks.
► ► Automatic updates: Ensure that all software and devices are updated regularly to
29 close security gaps. CONTINUED ON NEXT PAGE 30