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There was a 92% increase in cyberattacks from March to September 2020
The current situation of cybercrime in the pensions industry is a growing concern, with attacks almost doubling during the Covid-19 pandemic, according to industry experts.
Speaking this morning (17 March) at a Burges Salmon webinar on cyber security and pension schemes, Crowe UK partner and head of forensic services Jim Gee said the current situation is “not a pretty picture” and revealed there was a 92% increase in attacks from March 2020 to September 2020 from 876,000 to 1,679,000.
He also revealed while 42% of all crime in 2019 was cybercrime, this figure post-Covid is now above 50%.
Gee added: “Cybercrime is a rapidly evolving and continuously changing phenomena. It is unlike some other risks which are relatively static and have long established controls in place to mitigate them.
“It has increased in sophistication and is mostly undertaken by rapidly growing, highly profitable criminal businesses.”
The Pensions Regulator (TPR) policy lead Lucy Stone agreed that cybercrime is “constantly evolving” and “unfamiliar”.
“There are legal obligations for pension schemes and managers to operate adequate internal controls,” she said, adding a cyberattack is a case of “not if but when” so schemes must “think about how operations are safely and swiftly resumed”.
“Realistically most people do experience cyber breaches whether they are successful or not… You may not be able to prevent attacks but you can prevent attacks being successful,” she added.
Burges Salmon pensions team senior associate Crispin Freeman confirmed that pension schemes are “prime targets” for cyberattacks. He added while it is “not possible to be 100% cyber secure, pension scheme trustees and managers should focus on building resilience”.
He also outlined some pre-emptive steps schemes can take to prevent cyberattacks including insurance cover, trustee training, incident response plans, and risk assessments for example.
Stone added that TPR is seeing an increased focus on cyber and a rising presence of controls, but said the controls are still “more likely to be in place in larger schemes… but as a small scheme you are still a potential target and there are smaller steps you can take”.
Burges Salmon technology and data team senior associate Marcus Clayden said schemes need to “deal with breaches in a proactive and timely way”.
Gee concluded: “Trustees and administrators need to work closely together” to prevent cyberattacks, “and pension schemes need to understand their vulnerabilities if they are to address them”.
“It is crucial pension schemes protect themselves.”
This comes after the Pensions Administration Standards Association published its cybercrime guidance for pension administrators covering various elements to adhere to including meeting legal and regulatory standards, understanding their organisation’s vulnerability to cybercrime, ensuring resilience, and remaining able to fulfil critical functions in case of a cyberattack.
Concerns across the industry also saw pensions and financial inclusion minister Guy Opperman write to schemes last week, urging them to share more data on scams.
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