Wealthy individuals are heavily targeted by cyber criminals.
RISK FOCUS: HIGH NET WORTH
High Net Worth’s Unique
Emerging cyber risk
is a challenge for
everyone these days,
but for the high net
worth, the challenges
can be even greater.
By Jon McGoran
High net worth individuals have a bigger attack surface,” said Martin Hartley, executive vice president and chief operating officer of PURE Group of Insurance Companies. “They have more devices, they travel more, they may have domestic staff. There is just a greater attack surface for someone targeting them
to get through.”
Wealth attracts theft, but the lifestyles of the better off make them targets
as well. They tend to embrace technology, from computer-enhanced toys to a
vast array of smart home devices, most of which are Wi-Fi enabled, presenting
opportunities for would-be cyber thieves.
“With all of the smart home technology, [criminals can] hack into your
thermostat, which now gives them access to the rest of your network and … the
phones, iPads, and computers that family members do their banking on,” said
Lisa Lindsay, executive director at the Private Risk Management Association. The
latest gadgets or apps may still have unknown bugs or weaknesses, as well.
Domestic staff and frequent entertaining can both lead to sharing passwords,
which makes networks less secure.
“Children of the high net worth will have phones earlier,” said Kim Lucarelli,
senior vice president and director of personal client management at Oswald
Companies. “They may have them at ten, eleven years old.” Children that age are
less likely to understand the importance of good cyber hygiene, and more likely to
develop bad habits that will be difficult to unlearn when they get older.
The wealthy tend to travel more. Using unknown networks to control remote
devices or conduct financial transactions, especially abroad, puts home networks,
sensitive financial information, or even accounts themselves at risk.
“People think all the time, ‘Everything I do at home I can do remotely,’ and
that is true,” said Heather Posner, director of high net worth at Burns & Wilcox.
“But … how do you make sure you’re secure? Whether you’re paying bills, filing
your taxes, changing your thermostat, setting your alarm, what kind of exposure
are you opening yourself up to if you’re not doing that in a secure manner?”
“They’re sitting in a hotel lobby in Rome transacting financial matters. It’s crazy.
You shouldn’t even do that [in the U.S].”
Other risks arise from technological advances of another sort. Cyber criminals
drive through neighborhoods to access vulnerable home networks, and experts
are increasingly concerned about the use of drones, which would allow criminals
to detect and hack into networks remotely from a mile or two away, including
networks not accessible from the street.
The ultimate goal of those hackers is, of course, simple. “Without a doubt, it is
theft of funds from their bank account, through a variety of different means,” said
Hartley. “ … That is the highest risk facing high net worth individuals.”
Social media posts made while
traveling often provide details that
make fraudulent correspondence so
convincing, and the distance between
family members can make fake pleas for
money more believable and urgent.
Hartley routinely sees cases where
thieves have used information stolen
or gleaned from social media to create
utterly convincing correspondences
instructing personal assistants to
transfer often vast sums of money.
“The bank is not liable,” said
“High net worth individuals
have a bigger attack surface.
They have more devices,
they travel more, they may
have domestic staff...more
transactions are occurring.”
—Martin Hartley, executive vice president and
chief operating officer, PURE Group of Insurance
• High net worth individuals are
exposed to an array of cyber risks.
• Hackers may break into bank
accounts directly or commit theft
via social engineering.
• Some insurers are developing
new coverages to explicitly
address these risks.