Protect your Money: Cyber criminals target Wealth Managers

English: A photo of a traditional "blue l...

Covent Garden Police Station of the Metropolitan Police in London. (Photo credit: Wikipedia)

Recent reports indicate that criminals who make use of the Internet have begun to hack into wealth manager systems and to steal money from clearing banks known for their high levels of protection. According to EJ Hilbert, a prior anti terrorism agent from the FBI who this summer left for the UK to work as the leader of cyber investigations at Kroll, more than six wealth managers were compromised in order to make multi million pound online heists possible in the last several months in the UK. According to Mr. Hilbert, the situation is a frightening one. Wealth managers have been exploited in order to obtain millions of dollars. Hilbert noted that he had observed six such thefts in only four months at his current post.  He stated that in terms of awareness of cyber crimes, the Middle East and Europe are between three and five years in the past compared to the US.

The events are occurring while concern regarding levels of cyber security are on the increase. The UK government’s headquarters for communication is GCHQ, and its agents have begun to strongly suggest that asset managers make the issue a higher one in corporate agendas. There is also more effort to make cyber theft a priority at the board level. In the start of 2014, the Metropolitan Police will likely be launching a cyber unit consisting of at least 400 members. This will be four times the current number of officers who are responsible for looking into this issue in London. This is due to an increase of at least 60 per cent in similar crimes in London in the last year.

Kroll states that criminals have begun to gain entry to the systems of wealth managers by starting fake WiFi networks in hotels and airports, and staff who are on the move use these systems without knowing that they are putting their security systems at high risk. Once this occurs, the criminals are then able to send clearing banks emails within which they request large amounts of money that is being stored for clients the wealth manager has. The requests are to transfer this money to alternate accounts.

Because the clearing bank typically automatically will flag these kinds of requests as suspicious ones, they will often send the wealth manager an email to make sure the request is a real one. The wealth manager’s staff, however, will not receive the relevant email, as the cyber criminals will already have put an email filter together, which allows them to give permission to the transactions.

There is a high level of capability in organized crime, which leads to a number of inventive creations and schemes. Banks, in turn, have spent a lot of time and effort working on their system security. However, since every transaction goes through two parties, it makes sense for those who wish to filter such transactions to target the less secure side. However, the deputy of the association for wealth management insisted that his members were not easy targets or soft touches for cyber attackers. He stated that his wealth managers would look into such threats for moral and financial reasons.

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