The increasing use of technology and proliferation of data has increased the options and levels of service for clients. Unfortunately, it has also increased the likelihood of their data, or even their assets, being stolen. As a result, cyber security is now a global agenda item for regulators, and is viewed as a key systemic threat, which should be thought of in a much broader context than just another information technology issue.
Cyber risk constitutes a growing and significant risk to the integrity, efficiency and soundness of financial markets worldwide. The human element of cyber risk, combined with rapidly evolving technologies in securities markets, suggests that cyber security requires swift and sustained attention by regulators and market participants.
To date, the main focus has been on the banking system, but the investment management and funds industry is now under the spotlight. The US has led the way on regulatory intervention and regulators around the globe are now taking action. There are recognised global standards, but there is not yet consistency in rule-making.
More generally, protecting client data is a regulatory imperative, with new or enhanced regulation being introduced in a number of jurisdictions.