Every business comes with unique challenges and risks, and for PE/VCs, these risks are multiplied thanks to cybersecurity breaches threatening to expose your most sensitive information. Without a cybersecurity strategy in place, businesses risk costly threats and breaches and potentially damaging their overall credibility and reputation amongst investors.
So why aren’t firms better prepared?
The most straightforward answer is a lack of knowledge and experience. A shocking number of firms have management teams overwhelmed by the technical jargon associated with cybersecurity. However, as investors grow increasingly concerned with managing potential cyber risks and attacks, a cybersecurity strategy is quickly shifting from a “nice to have” to a critical essential.
By having a clear understanding of the industry’s cyber risks, along with the proper tools and plans in place if a breach were to occur, you can arm your firm with the protection needed to fight off potential threats while also seeing an average of 12% greater earnings than those without a cybersecurity strategy.
To help you better understand and prepare for potential breaches and position your firm for faster financial growth, we’ve rounded up the top five cybersecurity threats facing PE/VCs today. Let’s dive into it!
Risk #1: Viruses, Spyware, and Malware
One of the top cyber threats for PEs, especially, comes from viruses, spyware, and malware. As of 2016, more than 68% of firms reported experiencing one form of this type of attack – and that number is only continuing to grow.
Viruses and malware in the form of ransomware and spyware have been hitting the industry hard. Ransomware, a form of blackmail, occurs when hackers access and hold your data for a cash ransom, which a firm usually has to pay to keep data exposure from going public.
Spyware, on the other hand, involves a hacker accessing the network, but instead of hoarding information for a ransom, secretly records what is going on your network (things like passwords and sensitive data) to use that information to access and expose private market and research data. Both forms of malware are not only costly threats but can also diminish investor trust in your firm’s ability to maintain cyber security.
Risk #2: Email or Online Impersonations
Impersonations are a huge cybersecurity risk, most commonly known as phishing. In terms of overall data and money lost amongst PEs, phishing scams come out on top.
Hackers “phish” by sending false emails (usually impersonating a government or bank official) and asking for private data, such as financial information, personally identifiable information, etc. Once that information is provided (albeit unknowingly), sensitive information is handed to the hackers, and your entire network is breached.
Risk #3: Online Activism to Cause Downtime (DDoS)
Online Activism to Cause Downtime – or Distributed Denial-of-Service (DDoS) – is serious cybercrime where hackers (often a coordinated group) flood a server with traffic to overload it and cause network downtime. For financial industries, the direct consequences of downtime can include loss of data and revenue, not to mention damage to the business’s overall reputation (if and when the public finds out).
Risk #4: Unauthorized Access
Unauthorized access to computers, networks, or services can be detrimental to your business. By guessing passwords to break into systems, hackers can quickly gain control of your network through unsecured Wi-Fi, granting ample opportunity to inspect and compromise any data transferred through the network.
Unauthorized access risks are most common in “Shadow IT,” which is when employees use their own unsecured devices to access information from your network (documents, client data, etc.) Without a secure VPN, employees working from home or on their phones (or other personal devices) open Pandora’s box for potential breaches.
Risk #5: Electronic Theft
Money stolen electronically is a real threat, with most attacks originating in the form of malware. In fact, in 2021 alone, more than $8.6 billion of cryptocurrency was laundered by cybercriminals.
Without a robust cybersecurity strategy and policy in place, you put your firm at risk of losing more than sensitive information — you also stand to lose funds and your overall reputation, essentially threatening the future of the business.
Ready to Act on a Cyber Strategy?
To see how we fit in with your cybersecurity strategy, start a conversation with our team.