The most common medium for cyber-attacks is email. Family offices, like other financial institutions, rely heavily upon email for advice and investment recommendations. They also exchange data with third parties through email.
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Ransomware is a malicious program that blocks access to a computer's system until it is paid. It is one of the most popular ways to attack. Once a link in an email is clicked or an attachment downloaded, this software is installed.
Bitcoin is the preferred currency for criminals because it is easy to trace and collect.
Another common tactic used to attack cybercriminals is spoofing. This happens when criminals disguise an email to appear as it comes from a trusted source. They then phish the recipient for sensitive financial information.
Although not as common, wholesale payment fraud is still a problem for family offices. Criminals send instructions to banks in order to make payments.
It is important to note that cyber-attacks could be as simple as someone researching the HNWI and using a large amount of public information to guess a password for their email account. This will allow them to send the family office urgent instructions to pay fraudulent bills. They can also monitor the emails hacked to blackmail HNWIs, causing reputational and financial damage as well.
The theft and compromise of management systems is always a concern. However, it is more likely that the data is stolen from employees or other sources. However, the absence of these systems and the reliance on Excel spreadsheets could be a security nightmare due to the vulnerability they can create in an organization.