On June 16, BMO Family Office held the second session of ‘The purpose of Purpose’ series with Stonehage Fleming. Moderated by Matthew Fleming, Head of Family Governance and Succession at Stonehage Fleming, the session focused on the risks that pervasive technology poses on every aspect of our lives.
Mitigating Cybersecurity Threats
According to the first speaker, Larry Zelvin, Head of Financial Crimes Unit at BMO Financial Group, we face five major technological threats from:
1. Nation-state actors such as Iran and Russia who use military intelligence to meet security objectives.
2. Criminal actors who make money the old fashion way: by stealing it.
3. Terrorists who use technology to recruit followers or enhance their reputation.
4. Activists who try to cause reputational damage.
5. Insiders who pose extraordinary threats.
As with safeguards in cars (seatbelts, bags, etc.), Zelvin shared that we’ve developed safety mechanisms to keep us safer online. Unlike cars, however, we still have a long way to go. Keep in mind that 82 percent of most cyber breaches involve human action, like clicking on phishing email links. But people are also doing things they shouldn’t be or not paying attention. To avoid being a victim, Zelvin offered some advice:
•Look closely at the sender’s email to determine legitimacy.
•Watch out for fake logos.
•Be wary of emails that say: “click here”.
•Slow down. Probably the best advice, he added, is to take your time before opening anything. Only do so if you’re confident it looks and feels right.
Other best practices include: restarting your electronic device daily to avoid malware staying in memory, updating software, installing antivirus programs and firewalls, encrypting emails and documents and using complex passwords. You may also want to have one designated device for your financial affairs, he said. And avoid using public Wi-Fi., turn off tracking and wipe clean your devices before recycling them.
Managing Your Reputation
One of the unfortunate consequences of a cybersecurity breach is the damage it inflicts on your reputation as an individual, family member and business. One’s name is precious, explained Fleming.
“Our reputation is like one’s health, you only really appreciate it if you don’t have it anymore,” echoed speaker Guy Hudson, Head of Marketing and Reputational Brand Management at Stonehage Fleming. He shared that in 2018, nearly two-thirds of Stonehage Fleming clients said they were mindful of reputational threats but less than 10 percent did anything meaningful about it.
In response, the company established some prescient recommendations. Build digital resilience, for one, by developing a social media strategy and monitor it regularly. Educate family members about technological dangers is also important. “It’s about making sure the issue is on families’ agendas,” he said. The good news is that there are many knowledgeable people, such as digital experts, PR agencies, lawyers, etc., who can help.
“It's vital to talk,” added Hudson. Discuss the risks with your family and set up recommendations that everyone can follow. For example, avoid ostentatious displays of wealth, be careful with the people you work with, and avoid aggressive tax planning. Hudson then reiterated Zelvin’s advice to slow down. Think before you tweet or post a story that may not show your family in the best light.
Digital Resilience & Wellbeing
Next, Tom Rivett-Carnac of AGL Communications discussed the impact of the digital world on our mental health. Technology can be a great connector, he began, but it can also promote isolation and loneliness. Balance is key. Intergenerational conversations with family members can ensure everyone is informed about the potential concerns and can discuss them together.
For Zelvin, those at a higher risk of cyberattacks need to be extra careful. That group includes high net-worth individuals, the elderly and children. He related how even his own father- in-law was victim to a popular scam, whereby older people are told their grandchildren are hurt and in need of money. It was only after the second similar request that he realized he was being scammed. But at that point he had already lost money.
Develop a Common Narrative
What makes a high net-worth family particularly susceptible to cybercrime is the environment of discretion and invisibility, Hudson explained. Without a common narrative that’s out there for the world to see, outsiders can create their own, using misleading or incomplete data. It’s best to come to an agreement on what your family wants to convey and build a digital narrative around that to ensure you’re represented accurately.
As for your philanthropic initiatives, so long as they’re authentic and aligned with your family values, they can lend themselves well to your narrative.
Threats at Home
Your home is not immune from cyber threats. If your Wi-Fi password is not complex, you’re basically letting a stranger inside, shared Zelvin. When it comes to the elderly, “victimization guilt” makes them feel embarrassed by their mistakes, often refusing to report it. “Getting individuals to tell us what happened is one of our biggest challenges in security,” he said. “But the more information we have, the higher the probability we can help and remediate.”
Final Thoughts
The speakers also advised everyone to check the dark web and deep web (where your medical and academic records are stored) to assess your digital vulnerability. And do a self-audit or hire a digital agency to monitor your digital profile regularly. There may be a disgruntled employee writing something negative or competitors trying to undermine your success with inaccurate content. An agency or professional can help develop a strategy to combat those inaccuracies.
As for cryptocurrency, it’s the wild, wild west when it comes to security, said Zelvin, with the greatest attacks happening “where the human meets the machine.” Unfortunately, no laws exist to regulate crypto so it’s best to ask a security professional for help if you go this route.
Be skeptical, he added. “If you see something, say something; if it doesn’t look right, don’t open it and, if you did, confess.” And whether you’re dealing with technology’s impact on your mental health, business, or family’s reputation, the most important takeaway, as Fleming reiterated, is to maintain open lines of communication.
If you have any questions or are interested in learning more about technology risks in stewarding wealth, please contact your BMO Relationship Manager.
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