Posted on 13 May 2020
Adapting to the Security Risks Posed by Remote Working
With a large portion of the world now working remotely, security risks are on the rise, particularly for those working in the financial services sector. The increased risk inherent to this working environment shift and the upcoming financial and economic crisis are both factors shaping how professionals are conducting their work from home.
The pandemic has forced organizations to adapt in real time, especially when it comes to technological capabilities. From working remotely and adjusting to video conferencing to using electronic signatures and new identification processes, the daily lives of confined professionals have been greatly impacted.
Security risks have risen in response to this new, remote reality
This changing environment, combined with distractions present in our homes, has meant that external fraud risk has increased significantly for all organizations. This situation is well-known by ill-intentioned persons who do not hesitate to take advantage of the pandemic to access confidential information, receive undue funds or conduct illicit operations.
Such fraud attempts include cyber-attacks, phishing and email scam campaigns using remote access to directly impact companies’ systems. It may begin with sophisticated techniques to get employees to perform actions or divulge confidential information. The CEO/BEC (Business Email Compromise) fraud attack is a good example of such a technique, which continues to be highly profitable for fraudsters.
However, the risk increase is not limited to the remote working environment imposed by the pandemic. Financial services providers and their activities are also at risk due to the crisis’ impact on financial markets, which have a direct influence on the value of their clients' funds. In response, organizations should strengthen their security protocols surrounding client activity and transactions.
Understanding client behavior in an extraordinary time
The current economic crisis may cause distress for some fund managers and precipitate the devaluation of assets held in their funds' portfolio, which both heighten the risk of fraud.
In this scenario, some managers may be looking to offload and minimize losses. Others may be exposed to a purchase or re-financing of their distressed assets with illicit funds. As a consequence, service providers must pay close attention to such transactions and the risk of incorrect valuation of the assets involved, especially in cases involving divestment.
Moreover, the pandemic-induced market volatility increases the risk of persons aiming to take advantage of inside information or to implement market manipulation tactics for their benefit such as false information on possible bankruptcies, for example.
Alter Domus is taking exceptional action to address enhanced security risks
At Alter Domus, we understand that behind every fraud lies a serious risk to our business, operations and reputation. For this reason, our teams are carrying out all professional duties with an especially heightened awareness of the fraudulent risks that the current remote working environment presents.
We have reinforced our measures regarding client and procedural operations related to anti-money laundering, confidentiality, and data protection. As usual, fraud attempts, unusual transactions, and suspicious behaviors or activities will be immediately escalated to a local compliance officer, while phishing emails or possible cyber-fraud will be reported to the security team without delay.
In order to protect our or clients’ best interests and our company itself, we strive to keep the risks associated with the pandemic front of mind in our day-to-day work and remain committed to safeguarding both our own, as well as our clients’ precious data.
Chief Compliance Officer