Digital technology is a double-edged sword. On one hand, it’s made it easier than ever to learn and make investment decisions on the go. On the other hand, it’s put your data and privacy at risk.
With the proliferation of digital devices and online platforms your money is more accessible to you no matter where you are, but it is also exposed to the risk of online fraud and sophisticated cyber attacks. In 2016, hackers managed to infiltrate the international banking system through the SWIFT protocol. They stole tens of millions of dollars (Michelle Fox, MAY 13 2016).
If a global network of the largest banks and sovereign institutions could be hacked, one can only imagine what risks the ordinary saver faces.
According to a study by the Stanford Center on Longevity and the United States Financial Industry Regulatory Authority’s Investor Education Foundation, people over the age of 60 were particularly vulnerable to such attacks (FINRA, 5 May 2016). Not only were these people a prime target, but the amount of money they lost was greater than average.
Banks and financial institutions are well aware of the threat and have spent the past few decades bolstering their security systems and spending billions on countermeasures (Kara Scannell and Gina Chon JULY 29, 2015). Regulators have also done their part to ensure these institutions shoulder the responsibilities of protecting their clients’ assets and savings.
However, savers must also take the time to learn about the threat and take appropriate measures to prepare for an attack. Last year, Santander launched the Scam Avoidance School (SAS) to help savers deal with the most frequent forms of online financial fraud. Dr Paul Seager, Psychology Professor at Lancashire University, is an expert advisor to the bank’s education initiative (Mortgage Finance Gazette, 11th April 2018).
Lessons include tips and tricks for spotting the telltale signs of a fraudulent email, password security training, and basic principles of online data security. SAS isn’t the only way to learn these best practices. Savers can sign up for a range of online courses or local workshops to help them learn how to protect their identity and money online.
While the growing number and sophistication of cyber attacks may seem insurmountable, picking up a few basic data security skills could help you better protect your nest egg.