FINANCIAL INSTITUTIONS
WHY HIGH-NET-WORTH CLIENTS NEED
SUPERIOR CYBER RISK AND IDENTITY
PROTECTION AND HOW YOU CAN HELP
INTRODUCTION
The same thing that makes most valued customers key to your financial service institution makes them top targets of fraud; and that could have a negative effect on both company profitability and customer retention. Your job has become more difficult than that of a fraudster. To retain these customers and remain competitive, you need to provide a litany of top-tier services and products while fraudsters continue to chip away and exploit weak exposure points in your customers’ households and businesses. Now, there is an opportunity for financial institutions at the intersection of these challenges. High-net-worth households often are unaware of their susceptibility to modern identity theft and fraud—and how frustrating and potentially damaging it can be. What’s more, there haven’t been any comprehensive solutions available for addressing the full scope of the unique challenges they face.
This paper explores the trends that are shaping the financial market landscape along with what makes elite households more vulnerable to fraud. It also introduces a first-of-its-kind concierge-level cyber risk and identity management service designed for your high-net-worth customers that can help set your institution apart.
ENORMOUS OPPORTUNITIES, SELECTIVE CUSTOMERS
In the financial industry, competition for high-net-worth customers has always been intense, but evolving demographic considerations and customer preferences are adding to competitive pressures. Today’s elite customers are savvy about technology and product offerings and won’t hesitate to switch institutions when they think it’s in their best interest. For example, the 13 percent of the U.S. adult population that earns more than $130,000 per year and controls 41 percent of deposits and 33 percent of assets is 3.5 times more likely to consider switching financial institutions than other consumers.2Moreover, 20 percent of them are considering a
switch,3 and the vast majority is considering one of the giants or a large
regional institution.4 That’s significant when you consider just these
individuals put “an estimated $1.1 trillion in deposits, 103 million financial accounts, and $5.8 trillion in investable assets into play.”5
For financial institutions working to keep and grow their share of the high-net-worth marketplace, finding new and better ways to attract and
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DEFINING HIGH NET WORTH:
INDIVIDUAL S EARNING MORE THAN $150,000/YEAR WITH ROUGHLY $2 MILLION IN
INVESTABLE ASSETS (E XCLUDING THE FAMILY RESIDENCE) AND MORE THAN 15 ACCOUNTS1
1 “Top Trends for Digital Financial Services in 2015,” Javelin Strategy & Research
2 “ ‘New’ Moneyhawks: Highly Profitable and Engaged Customers Defining the Future of Banking,” Javelin Strategy & Research 3 “Top Trends for Digital Financial Services in 2015,” Javelin Strategy & Research
4 “ ‘New’ Moneyhawks: Highly Profitable and Engaged Customers Defining the Future of Banking,” Javelin Strategy & Research 5 Ibid.
retain high-net-worth households is imperative. And as transaction-based products and services have become more and more commoditized, high-value personalized services are taking center stage. One service area that has not kept up to the realities of high-net-worth clients’ lives is identity and cyber management services. And this is a critical area when you consider the frequency of data breaches and related headlines today.
THE HEADLINES PAINT A GRIM PICTURE
“New York Yankees employee accidentally reveals private info about season-ticket-holders”
• Spreadsheet of season-ticket holder personal information accidentally emailed to fans6
“Sony hack leaked 47,000 Social Security numbers, celebrity data”
• The personal information of more than 47,000 people, including company executives was revealed7
“Banks: Card breach at Trump hotel properties”
• Luxury hotel properties tied to business magnates hit with a credit card breach8
Although elite households are rightly concerned about the safety of their money, many are not as vigilant about monitoring and protecting personal information. Yet, as the next section explains, their household situations and prominence makes them easier targets for criminals in many ways, with a much higher potential payoff.
High-net-worth individuals are 2.5 times more likely to subscribe to identity protection services.9
HIGH-NET-WORTH EXPOSURE POINTS
Elite households face more risks because they have more exposure points than the average home. In addition to a larger number of financial accounts, many high-net-worth households are run like businesses with employees.
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6 Perone, Tim, Yankees employee accidentally reveals private info about season-ticket holders, The New York Post, April 28, 2011 7 Musil, Steven, Sony hack leaked 47,000 Social Security numbers, celebrity data, Cnet, December 4, 2014
8 Krebs, Brian, Banks: Card Breach at Trump Hotel Properties, krebsonsecurity.com, July 1, 2015 9 Top Trends for Digital Financial Services in 2015, Javelin Strategy & Research
That means that more people than immediate family members may have access to their personally identifying information (PII). It also means that fraudsters and hackers can pursue attacks from a host of different access points.
HOME COMPUTER NETWORK AND DEVICES
Technology is everywhere in today’s high-net-worth households as adult family members, children and staff tap into wireless networks using any number of devices and computers.
WHO’S USING WHAT?
ADULT FAMILY CHILDREN STAFF
Laptops and PCs Laptops and PCs Laptops and/or tablets Smartphones
(work and personal)
Tablet devices Smartphones
Tablets Gaming systems Smart appliances
Gaming systems Smartphones Smart home TV online systems Smart cars
Medical devices TV Online systems
Effectively managing security and privacy settings in the network router and across all of these devices takes both know-how and ongoing vigilance. In many households, however, device passwords and other security measures are ignored in favor of convenience. But weak or nonexistent passwords provide anyone who gets hold of a device with the keys to household information. This problem is only compounded when family and staff take poorly protected devices on trips and vacations.
Social media usage also can provide criminals with valuable information. For example, fraudsters may able to glean enough PII from different sources to create fraudulent accounts or to execute more effective spear-phishing campaigns. Or travel-related posts and pictures could let criminals know when the family is away, for example.
Beyond hacking or simply pulling PII or other useful information from technology, fraudsters also have many phishing opportunities (defined as deliberate and often malicious attempts to secure PII by pretending to be legitimate through online channels).
HOUSE MANAGER, EMPLOYEES AND CONTRACTORS
Household employees help make high-net-worth individuals’ busy lives much easier, but they also present risks. For example, household managers with knowledge of the family’s PII are good targets for fraudsters through phishing scams. Moreover, service-provider employees who have access to the house and technology can leave high-net-worth individuals more vulnerable to identity theft and other crimes.
FINANCIAL ACCOUNTS
Elite households often have 15 or more bank and investment accounts. And more accounts means more exposure and opportunities for identity theft and potential account takeovers. For example, a thief could perpetrate fraud using financial documents or statements found in the home office or mail. Hackers or a rogue employee at a financial institution could also access data that could lead to identity theft or other financial crimes, such as account takeovers, for example.
THIRD-PARTY DATA BREACHES
Data breaches at an employer or service provider also could lead to fraud or harm the family’s reputation.
UNDERSTANDING THE POTENTIAL IMPACTS
Without the right monitoring in place, identity-related and financial crimes often take months or years to detect and can be very time-consuming and frustrating to clean up. Not to mention that crimes committed by perpetrators in your clients’ names can lead to misunderstandings and embarrassment, and serious reputational damage. “It takes twenty years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently,” according to the famous quote from Warren Buffett.
CASE STUDY: ACCOUNT TAKEOVER NIGHTMARE
A successful financial advisor with 31 years of experience thought he knew how to protect himself against identity theft, until thieves began rapidly opening accounts in his name.
SITUATION
The identity thieves:
• Transferred $80,000 from valid account to fraudulent accounts • Changed account contact information
• Set up a Western Union account on the bank’s bill pay system • Tried to make several $3,000 charges to a credit card
• Began rapidly signing up for new credit cards, pre-pay accounts and brokerage accounts
SOLUTION
The advisor froze his credit and moved his money into his own brokerage firm for safekeeping, but kept learning about more fraudulent accounts. Addressing the issues was very time-consuming and frustrating, until he got help from IDT911, which worked with him on key resolution steps, including:
• Completing identity theft affidavits
• Notifying the Federal Trade Commission and IRS of the theft
• Reviewing current credit reports from credit monitoring agencies and ChexSystems to identify every piece of fraud for dispute
HOW CAN YOUR INSTITUTION HELP?
BEYOND MONITORING: WHAT TODAY’S HIGH-NET-WORTH HOUSEHOLDS NEED AND EXPECT
Given the complexity of their lives, today’s high-net-worth households need more than just credit monitoring and resolution services for keeping their finances, identities and reputations safe. In fact, most people are unaware of all of the support they might need. And even if they are aware, wading through all of the different options before choosing and signing up with providers is a time-consuming process. Moreover, in cases where protection services are provided along with financial or insurance products, it’s often difficult to put together a clear picture of what the services cover and how they might complement one another.
What’s been missing for high-net-worth clients is comprehensive household breach protection that includes proactive and reactive identity and cyber management services, along with fraud, credit, Internet and card-monitoring services—all working seamlessly to protect their assets and interests. Of course, high-net-worth clients aren’t going to accept just any offering. They have high expectations about the quality of the provider and how services are handled and delivered. For the sake of convenience, they prefer to have someone they trust, such as a relationship manager providing recommendations and as much support as possible so they don’t have to do the legwork themselves.
A BETTER APPROACH FOR CRITICAL MARKET NEEDS
The time has come for an identity management and protection suite that serves the unique needs of high-net-worth households using the concierge-style approach they prefer. That’s why IDT911 created CyberEliteSuite™ cyber risk and identity services for elite households. This unique suite is designed so financial institutions can extend their offerings and brand to better protect
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their high-net-worth clients. With CyberEliteSuite, your institution can provide high-net-worth clients with continual household identity monitoring, breach management and remediation services through a single offering. The suite includes support for everyone in your clients’ households for everything from securing home network connections and privacy settings to social media and reputation enhancement. Moreover, our seasoned, award-winning team of fraud protection and remediation professionals provides concierge call handling 24/7.
BALANCING CLIENT AND BRAND SUPPORT
While a full spectrum of identity monitoring, breach management and
remediation services from a single, trusted provider is a far superior approach to protecting the personal and financial well-being of your clients, financial institutions need to consider how any program will affect their brand and operations. It’s important that solutions are designed to make your relationship managers the champions while minimizing the impact on their day-to-day work and the company overall.
From training to marketing planning to program implementation, IDT911 works closely with partners to ensure that branding and approach align with organizational needs and objectives. That means we can integrate your branding or keep with a standard platform. Moreover, as a B2B company our team’s mission is to provide your clients with elite service—and never to directly market or cross-sell products or services. You can trust that our team will be able to meet your clients’ demanding service-level expectations because our concierge team has an average of 8-plus years of experience and a 99 percent customer satisfaction rate. At the end of the day, not only does CyberEliteSuite extend your brand, but your organization becomes a repository of trusted and useful information on identity theft and fraud prevention that your high-net-worth customers can call on when they need help. And when it comes to meeting mandates specific to the banking sector, the solution contributes to your institution’s regulatory and compliance posture.
LEARN MORE
Given the unique fraud challenges your most valuable clients face,
CyberEliteSuite provides a rare opportunity to offer them a first-of-its-kind, unified solution for managing risks that also will help your brand stand apart. Learn more by visiting www.IDT911.com/cyberelitesuite.n
