At a glance
  • Our report titled ‘Insurance and Wealth Management Industry Trends’, highlights that 90 percent of wealth managers rate the threat of cyber-crime as either high or very high
  • The report also highlighted behind cyber-crime, regulation was viewed as the next greatest risk to the industry, with 20% of respondents worried about the reputational risks associated with failing to comply with new measures
23rd January 2017

Cyber risks tops UK Wealth Management firms' list of concerns

Insurance and Wealth Management Industry Trends’

Cyber risk tops the list of concerns for UK wealth management firms, our recent research reveals.

We recently partnered with Compeer Ltd to carry out a survey to UK wealth management firms that collectively manage £130 billion of assets, representing almost a fifth of the industry. The senior decision makers interviewed believe that data breaches by cyber hackers are the most damaging threat facing the industry.

Our report titled ‘Insurance and Wealth Management Industry Trends’, highlights that there needs to be greater understanding between wealth management firms and the insurance sector about the risks of cyber-crime, with 55% saying the vast scope and fast evolving nature of cyber-crime made it difficult to get the right policy or find an insurer with the correct expertise.

The report also highlighted behind cyber-crime, regulation was viewed as the next greatest risk to the industry, with one fifth (20 percent) of respondents worried about the reputational risks associated with failing to comply with new measures, we are already speaking with our clients about some of these regulatory changes from an insurance perspective. 

However, despite these concerns over cyber security (90 percent of wealth managers rate the threat of cyber-crime as either high or very high) wealth management firms view technology and the use of online platforms as growth and service enablers and plan to continue investment, in spite of the potential risks.

"Wealth Management businesses are looking to work with insurance providers that really understand the sector and their business activities." 

Improved client service tended to be at the forefront of this investment, with 35 percent of firms planning to upgrade Customer Relationship Management (CRM) systems over the next three to five years. One quarter (25 percent) also plan to develop their online portals while 15 percent want to improve their mobile technology.

The report also highlighted behind cyber-crime, regulation was viewed as the next greatest risk to the industry, with one fifth (20 percent) of respondents worried about the reputational risks associated with failing to comply with new measures, we are already beginning speaking with our clients about some of these regulatory changes from an insurance perspective including the potential impact of GDPR.

  “We commissioned the research project to enable us to better understand the challenges that the Wealth Management sector is currently facing.  Along with regulation, it was perhaps unsurprising to discover that the one common area for concern for all the participants are the issues relating to cyber risk. We are already working with our insurer partners and other strategic suppliers to strengthen our proposition in this fast developing area of risk and this will enable us to provide bespoke and responsive cyber insurance solutions for all our clients. As the report suggests, Wealth Management businesses are looking to work with insurance providers that really understand the sector and their business activities. This research will help us to do this, so we can continue to develop long standing relationships with clients, something which has always been our ethos since my Grandfather started the business in 1948 ” says,  Stephen Lark, Managing Director of Lark (Group) Limited

Our specialist division, Lark Financial Institutions (Lark FI), has over 20 years of experience operating within the niche financial institutions sector. Lark FI goes beyond the traditional insurance offering and strives to provide innovative insurance solutions and high levels of customer service.

To view our animated infographic and download the full report, please click here

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