With 2016 behind us, the promise of 2017 offers the opportunity to execute our firm strategic visions and realize our personal and professional goals. For our investment management firms, this means charting a course to increase responsiveness to the new challenges that lie ahead.
The investment management industry has seen many regulatory changes focusing on cybersecurity over the past three years. With each year, the regulatory enforcement actions from the SEC increase in number and scope. In addition, the regulatory demands there have been multiple high profile cybersecurity incidents that have impacted the integrity of the financial markets in general and specifically impacted investment management firms both in their reputation and operational viability.
As debate over cyberattacks is pervasive across private, public, commercial and social sectors of our country, NexTier’s Investment Management Industry Cyber outlook for 2017 calls for more of the same; Expect higher regulatory demands for government and self regulatory associations as well as heightened threats to financial systems as a whole and market participants in particular.
Most immediate is the Department of Financial Solutions Cybersecurity rule which makes several demands of investment management companies to ensure data security and privacy controls are in place with their respective roles and responsibilities for information risk management.
Other states are not far behind with proposed legislation. While federal legislation for cybersecurity reporting is not far behind, the SEC is continuing its trends of audit sweeps and targeted guidance intended as a precursor to a regulatory mandate on cybersecurity compliance.
Beyond regulatory requirements, Cybersecurity is a critical element of enterprise risk management the need to protect our firm’s viability is highly dependent on the information which fuels our business processes. Data and the information it represents can serve as both an enabler and differentiator. Technology can provide multiple benefits such as competitive advantage, customization for client's financial and investment needs, or enhanced collaboration across business partner platforms.