Data security is no small matter, particularly when millions of dollars could be on the line. News broke that the White House was hacked last week. Is the cybersecurity at banks and brokerages any better?
Maybe not so much: In June and July of this year hackers stole names, addresses, phone numbers and e-mail addresses from JPMorganChase. Data from 76 million household accounts and 7 million business accounts could have been exposed, Bloomberg reported in October.
Whether your account is seven figures or merely four or even three, cyber security at financial firms should be a consideration when investing.
A survey of treasury, finance and banking executives released this week shows that financial executives understand the high stakes.
The survey, released on Tuesday by the Association for Financial Professionals, reported that 62 percent of companies experienced a cyber-attack or an attempt at one in the past 12 months.
That is cause for concern: 32 percent of those surveyed ranked cyber risks as the highest on a five-point scale, while 28 percent said they were very high.
Companies can buy cybersecurity insurance. Insurance could defray the cost of giving customers their money back in case accounts get hacked, but 31 percent of the businesses surveyed didn’t carry insurance against cyber-attacks.
Safe online investing
When choosing a brokerage, ask about protocols for cyber-attacks and hacking. What happens if the firm is hacked, and what happens if your personal computer is compromised? The outcomes may differ.
Ideally, fraudulent transactions would be completely reversed and the investor made whole. Look for a guarantee that the brokerage protects customers against online theft.
Investors should think about cybersecurity before an emergency hits, including taking these precautions:
- Know who to call in the event of fraud. Though your debit card likely has a contact for your bank, keeping a phone number for your brokerage handy is also a good idea.
- Never, ever give out personal information in response to unsolicited e-mails or telephone calls.
- Use two-factor authentication if it’s available. This nifty website, Twofactorauth.org, may be able to tell you if it’s available at your bank or brokerage.
- Enable text alerts or e-mail notifications to alert you to any changes or activity in your brokerage account.
- Avoid online banking or trading on public networks.
There’s a lot investors can do at home to keep their data safe as well, including installing operating system updates and keeping anti-virus programs up to date.
Have you been hacked? What happened?
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Senior investing reporter Sheyna Steiner is a co-author of “Future Millionaires’ Guidebook,” an e-book written by Bankrate editors and reporters. It’s available at all the major e-book retailers.