29 August 2017
The most common time for people to suddenly get serious about cyber crime? Right after they fall victim to it. But for high-net-worth individuals, the cost of such a wake-up call can be far too high.
The good news is wealthy people are already worried about cyber crime. A 2016 poll of high-net-worth investors by Morgan Stanley found 72 per cent listed identity theft as an issue they were most worried about.
They ought to be. Australia is rife with online crime and trends suggest the pursuit of high-value targets is increasing.
Australia ranked fourth in the FBI’s 2016 Internet Crime Report for number of victims, ahead of several larger countries, including France and Germany. Meanwhile, the Australian Cybercrime Online Reporting Network is recording a steady increase in cyber crime: 11,800 scams and other crimes were reported in the three months between April and June 2017, up from 10,800 in the same period in 2016. Email was the most popular vector for attack in both years.
Cyber crime follows the money. Attacks sometimes hit large organisations with a presumed ability to pay. We hear about these when the organisations are obliged to report on them, or because the attack shuts them down, as with the ‘WannaCry’ ransomware attack on Britain's National Heath Service. But organisations are far from the only targets.
When hackers target individuals the attacks are far less public. KPMG Risk Consulting partner Stan Gallo has been involved in several cyber-crime cases involving prominent figures that have never been made public.
“For reputational reasons, et cetera, most victims want to keep that information confidential,” Gallo says.
High net worth individuals are at particular risk. Not only do they have resources hackers would like to appropriate, but often also a public profile that facilitates information gathering. The intent can be to steal, to extort or to publicly embarrass.
The practice is sometimes known as ‘spear-phishing’. Specific targets are identified and pursued, using high effort in the expectation of high reward.
Cyber-crime targeting individuals is largely hidden from public view. We hear of a few especially high-profile cases. The following are exceptions:
Personal information can be a valuable intermediate step towards a bigger hack, and it is often available to hackers at a price, says KPMG’s Gallo.
“There is a lot of information available on the dark web,” he says. “It’s not just email addresses but user IDs, passwords, accounts – both financial and social media. A lot of sensitive information is available there if you know where to find it.”
Hackers exploit mass hacks – such as when over 100 million logins and passwords were stolen from LinkedIn in 2012 – to get details on high profile people. But sometimes information is on the internet in plain sight.
As a convicted cyber criminal told The Financial Times in 2016: “LinkedIn is a very good tool to find out people’s job titles … people post a lot of publicly available information about themselves online that is very useful.”
“There is a lot of information available on the dark web. It’s not just email addresses but user IDs, passwords, accounts."
Stan Gallo, KPMG
When a chief executive officer loses control of their identity, it can cost their business dearly. Hackers have found impersonating CEOs to obtain wire transfers can be very lucrative. The ploy is known as business email compromise (BEC).
“BEC is a serious threat on a global scale,” says FBI special agent Martin Licciardo, an organised crime investigator. “And the criminal organisations that perpetrate these frauds are continually honing their techniques to exploit unsuspecting victims.”
“There is a lot of information available on the dark web. It’s not just email addresses but user IDs, passwords, accounts."
Stan Gallo, KPMG
High-net-worth individuals need to stay a step ahead to avoid being brought down, says Gallo.
He recommends basic security hygiene such as:
Really good defence involves controlling what information hits the internet, Gallo says, and that is not about technical solutions.
“Sometimes it is not just the person publishing, it might be their children or their spouse or partner,” he says.
“Whether they are a member of a board or a C-suite executive they should encourage that cultural mindset in their staff as well their family. Practice yourself but also preach it. Make sure that awareness is with anyone who acts on your behalf or has authority over your assets.”
Jason Murphy is an economist, media commentator, journalist and corporate writer based in Melbourne.
To discuss what this insight could mean for you, talk to your ANZ Private Banker directly, or contact us below.
August 2016
INVESTMENT
Whether we’re adding value or being protective: tactical asset allocation is a daily consideration. Mark Rider explains ANZ chief investment office’s tactics to maximise short-term opportunities.
January 2018
INVESTMENT
In this, our annual look at the global market, investors take note: the double-digit sharemarket returns of 2017 will moderate this year, explains Mark Rider.
August 2017
INVESTMENT
Investment diversification is the golden rule of managing risk, which is more real today than ever, writes Alan Hartstein.
To find out more about how to become a Private Client, share your details here.
Speak to the ANZ Private team directly
We're available weekdays 9:00am to 6:00pm AEST
1. NSW Trustee and Guardian, The Superannuation Complaints Tribunal Annual Report 2013/14
2. Source: Australian Taxation Office - www.ato.gov.au/Individuals/Deceased-estates/Being-an-executor/The-deceased-estate/
ANZ Private Bankers are representatives of Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (ANZ), the holder of Australian Financial Services Licence number 234527. This document ("document") is distributed to you by ANZ and may not be reproduced, distributed or published by any recipient for any purpose.
The information provided is general in nature only and does not take into account your personal objectives, financial situation or needs. Please consider its appropriateness to you before making any investment decisions. It should not be relied upon as a substitute for professional advice. For any product referred to above, ANZ recommends that you read any relevant offer document or product disclosure statement and consider if the product is appropriate for you. For products issued by ANZ, these documents are available at www.anz.com. This document is current as at the date of this publication but is subject to change. The document is provided and issued by ANZ unless another author is specified in the document, in which case it is provided and issued by that author. The views expressed are those of the authors only and do not necessarily reflect the opinions or views of ANZ, its employees or directors. Whilst care has been taken in preparing this document, ANZ and its related entities do not warrant or represent that the document is accurate or complete. To the extent permitted by law, ANZ and its related entities do not accept any responsibility or liability from the use of the information. Past performance is not indicative of future performance and any case study shown is for illustrative purposes only. Neither are a prediction of the actual outcome which will be achieved. Some of this information may have tax implications. We recommend that you seek specialist tax advice on how it may impact your tax obligations, liabilities or entitlements.
