By Thomas Fink via Iris.xyz
If you watch the news with any regularity, you know that data breaches can happen to even the biggest and best-known entities. And not only are they expensive for companies and consumers to deal with but they also erode the trust that registered investment advisors (RIAs) have worked hard to build with their clients.
The fact is, nearly half of Americans (49 percent) feel that their personal information is less secure than it was five years ago, according to a study on Americans and Cybersecurity from Pew Internet Research. That same study found that 58 percent of Americans age 50 and older feel that their personal information has become less safe in recent years, compared to 41 percent of Americans ages 18 to 49. What’s more, many Americans lack faith in public and private institutions to protect their personal information from those who would seek to compromise it for their own gain.
So where does that leave RIAs?
Ultimately, RIAs have the responsibility to conduct due diligence on all technology providers—and they’re responsible in the event of a data breach. It can be a tough pill to swallow, considering RIAs have smaller pocketbooks, but unfortunately, that’s the reality of the regulatory landscape RIAs live in.
To help face that reality head-on, there are plenty of ways RIAs can build regulatory compliance into their day-to-day operations:
- Protecting the business. Cyberinsurance has emerged as the fastest-growing type of coverage among U.S. companies, according to the Wall Street Journal. RIAs should consider working with an errors and omissions (or E&O) insurance provider for potential coverage options related to data breaches.
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