As with any treasured possession, keeping watch over your investment strategy is necessary, particularly to guard against online dangers.
In the age of digital banks and trading platforms, a single incident of data theft can cause huge problems and disrupt the investment roadmap you crafted with care.
Common Cyber Risks for Investors
To best defend yourself against cyberattacks, it’s important to know all the ways in which your investments can be endangered.
But what are some of the most common cyber risks that can disrupt your investments or put them at risk?
Account Takeovers
Account takeovers thrive through phishing emails, which hackers meticulously design to mimic legitimate sources, like your bank or brokerage.
Phishing emails often create a sense of urgency and exploit your fear. These crafty emails push you to engage with malicious links or download attachments.
Clicking on these links can redirect you to a counterfeit login page, strategically designed to steal your credentials.
Data Breaches
Unfortunately, cyberattacks can break through the security of banks and financial institutions.
Unscrupulous people can take advantage of weak spots in the system and get hold of user information such as:
- Full names,
- Contact details,
- Social Security numbers,
- Account login details.
Even though financial institutions invest a lot of money into protecting against cyberattacks, nothing is truly bulletproof: these defenses can sometimes fail.
When this happens at an investment firm or a company holding your assets, criminals may steal and use your private and financial details, which puts you at risk for identity theft and false transactions.
According to Javelin Strategy & Research, the money lost by US companies because of identity theft was a huge $43 billion in 2022.
Social Engineering Scams
Social media platforms are a goldmine for social engineers – cybercriminals who exploit human emotions and psychology to manipulate victims.
Social engineers might:
- Befriend you online – Hackers may create fake profiles and build trust with you over time before pitching a fraudulent investment opportunity.
- Take advantage of FOMO (Fear of Missing Out) – They might present “limited-time” investment opportunities that seem too good to be true, pressuring you into a hasty decision.
- Impersonate financial advisors – Hackers may pose as legitimate financial advisors and offer “personalized” investment advice, often promoting risky or non-existent investment vehicles.
A loss of $4.57 billion due to investment fraud was reported by the FBI’s Internet Crime Complaint Center in 2023, which truly highlights just how prevalent this social engineering tactic is.
Malware and Spyware
Malware and spyware aim to sneak into your devices to steal sensitive data.
They may look like real investment applications or be downloaded from deceptive emails.
After being placed into your computer, malware can record the keys you press and seize your sign-in details or other bank information.
Spyware collects what you do quietly – and that very same information may be wrongly used to steal your investments.
SIM Swapping
SIM swapping is when someone fools your phone company into moving your number to a new SIM card owned by the hacker.
They might use tricks on people or weaknesses in the carrier’s system to do this.
After they get your phone number, hackers can receive the codes for 2-factor authentication.
These are used when confirming account logins or making payments or transfers, putting your bank account and finances in danger.
Ransomware Attacks
These devastating attacks make your data unreadable by encrypting it.
To regain access to your files, the hackers will ask you for money as a ransom. Even financial institutions can be targets, potentially disrupting access to your investments.
According to the FBI, ransomware attacks have led businesses to lose around $1 billion in 2023, marking it as the year with the most severe impact from such incidents.
Deepfakes
Unfortunately, as artificial intelligence becomes more advanced and realistic, deepfakes are also becoming more and more sophisticated.
These incredibly realistic videos or audio recordings can “copy” or mimic public and trusted figures like financial advisors, potentially influencing investment decisions or leading to scams.
Experts believe that deepfake attacks are likely to become a bigger threat in the years ahead.
Strengthening Your Investment Defenses: Practical Steps
But don’t worry; despite the many risks, there are also multiple steps you can take to protect your investments:
- Create Strong Passwords – Use unique and complex passwords for every single one of your accounts. Try using a password manager to help you create and store passwords securely.
- Multi-Factor Authentication (MFA) or 2FA – Activate 2FA on any account that allows it. This method requires a secondary verification code, significantly hindering unauthorized access attempts.
- Use a VPN – When accessing your investment accounts, use a Virtual Private Network (VPN). It works by encrypting your data, meaning nobody can see what you’re doing.
- Create Backups – In case of ransomware, you should always have a back up so you don’t need to give in to any ransom demands and payments.
- Stay Vigilant – Scrutinize your financial statements regularly. Always keep an eye out for any suspicious activity and report if you sense something amiss. Don’t open shady emails or click suspicious links.
Use strong passwords, enable MFA, get the best VPN download, and stay vigilant – this gives you the best fighting chance to combat cybersecurity risks.
Invest in Your Security, Invest in Your Future
By taking these steps, you can significantly lower the risk of cyberattacks and make sure your investment plan keeps going in the right direction.
Being careful with online activities can help you keep your finances secure – remember these steps and think of them as part of your investment strategy for the long run.
