Asset managers beef up cyber defences as a priority new industry survey reveals
Half (50%) of asset managers plan to increase expenditure on cybersecurity this year
amid heightened fear of cyber attacks
London – A new report from Osney Media and BackBay Communications reveals that improving cybersecurity is one of the key business priorities for asset managers this year in response to a greater perceived threat of cybersecurity attacks. The report, based on a survey of global asset managers being launched today at The Summit for Asset Management (TSAM) in London, reveals that cybersecurity improvements are a key business priority for 33% of asset managers.
Two-thirds (65%) of the senior asset management professionals surveyed believe that the threat posed to their organisation from cyber crime this year is greater than in 2017; this compares with just 2% who said it is less of a threat. As a result, investments to improve cybersecurity measures by the asset management industry are anticipated to rise, with 50% of respondents saying their organisation plans to increase expenditure in this area in 2018.
The findings follow a spate of high profile and disruptive cyber attacks and data breaches in 2017 across a number of sectors, including financial services. With millions of trades placed each day and huge amounts of financial data held by asset managers, it is a sector considered to be at particular risk. Indeed, in a September 2017 statement, SEC Chairman Jay Clayton, said: “Cybersecurity is critical to the operations of our markets and the risks are significant and, in many cases, systemic.”
For firms with clients and operations in the EU, the introduction of GDPR, the new European data protection regulation, in May is also likely to sharpen their focus on cybersecurity. Under new rules, regulators are able to impose fines of up to €20 million to firms that fail to report cyber attacks within 72 hours.
“Cybersecurity is clearly in focus for asset managers right now,” said Jonathan Wiser, Director at Osney Media, which commissioned the study and organises TSAM London. “Not only is it firmly on the agenda for regulators, but with the vast majority of firms turning to technology to enhance the services they offer to customers and drive down costs, they need to make sure they have appropriate cyber defences in place. The potential operational and reputational risks from a breach are immense.”
The research reveals that 66% of respondent firms are currently undergoing a digital transformation project - to incorporate new technologies into the heart of their business operations and processes - with a further 18% planning such a project. The main reasons cited for such projects were to improve or automate middle- and back-office processes (71%), improve fund distribution and enhance the client experience (65%), and improve research and investment decision-making (35%).
Gender and diversity
Other findings from the survey reveal that the vast majority (78%) think their organisation has a ‘good’ or ‘very good’ approach when it comes to promoting gender equality and diversity, with around one in three (34%) saying that their organisation has policies in place to encourage women into senior positions.
Respondents are, however, less positive about the asset management industry as a whole when it comes to gender and diversity. More than one in three (35%) respondents describe the industry’s approach to gender equality and diversity as ‘poor’ or ‘very poor’, with only 6% describing it as ‘very good’.
Bill Haynes, CEO and founder of BackBay Communications, the financial services marketing and communications consultancy that conducted the research, said: “Gender equality and diversity is a huge topic in the industry right now. We were surprised to find such a big discrepancy between respondents’ views of their own company and the industry in general. This might be to do with the fact that historically such issues have been dealt with at a company level and that a co-ordinated industry-wide effort is only just developing.”
Jonathan Wiser, Director at Osney Media, added: “The industry is moving in the right direction regarding gender equality and diversity; but of course, more can be done across the board (and actually, also at board level). Increasingly firms are rolling out projects and initiatives, which is encouraging. We believe that moving forward, the asset management industry could become the role model across financial services, and moreover, should strive to be.”
Environmental, social and governance (ESG) considerations have also grown in prominence with over half (51%) saying that their organisation includes ESG metrics as part of its investor reporting. The uptake of responsible and ESG products is also high with 60% of respondents saying their organisation offers such products. Of those that don’t currently offer an ESG or responsible investment product, one in five (20%) plans to launch one in the next 12 months.
The Summit for Asset Management (TSAM) is being held at the QEII Centre in London on 13-14 March 2018. For more information, visit: www.tsamlondon.com
To read the report and view the full survey results, visit: TSAM Series: Trends in Asset Management
BackBay Communications and Osney Media conducted an online survey of senior decision-makers at investment management companies between 9th February and 21st February 2018. The survey was completed by 88 respondents from across all areas of operations including client reporting, technology, marketing, investment, accounting and finance, performance measurement, risk management, senior management and product development. Companies ranged in size from boutiques with less than $1bn assets under management (AUM) to global firms with an AUM of over $1tn.
About BackBay Communications
BackBay Communications is a public relations and integrated marketing firm focused on content-driven communications for the financial services sector including asset managers, investment advisors, private equity firms and financial technology companies. BackBay’s services include public relations, branding, marketing plans and materials, website development, and social media. BackBay is highly regarded for thought leadership initiatives and relationships with the major business media. For more information, please visit www.BackBayCommunications.com.
Osney Media is a provider of world class learning and networking events. Specialising within Financial Services, it hosts The Summit for Asset Management (TSAM) - a global series of conferences taking place in New York, Boston, Toronto, London and Hong Kong. TSAM brings together stakeholders from across asset management and the wider buy-side community, in addition to the industry's leading service and solution providers. Catered for professionals across the value-chain of the business, TSAM co-locates 6 conferences focused on: Technology & Operations; Data Management; Marketing & Sales Communications; Client Reporting & Communications; Performance & Risk; Regulations & Compliance.
In addition to these events, Osney Media hosts two key industry groups: TSAM C-Suite and the Ops50.
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