Newfront | Wire Fraud Alert
Published March 16, 2023
It was impossible to watch the Silicon Valley Bank (SVB) news without giving a thought to cybersecurity. It’s no surprise that some media have raised concerns of a surge in cyber attacks in the coming days and weeks. Notably because thousands of changes to wire transfer instructions have taken place across the financial ecosystem as a result of the FDIC takeover of SVB and Signature banks. The suddenness of these recent events has handed cyber attackers a perfect opportunity to exploit uncertainty. Think about phishing emails in particular. They often pose as known associates of their target, request sensitive information via email, and often request a change to banking details. It would be easy to mistake one for a legitimate set of wire transfer instructions.
So how can clients and companies shield themselves from debilitating cyber attacks particularly in moments like these? Here are a few topline recommendations.
**Prep Your Team **
Expect an increase in funds transfer fraud attempts. Some attempts will pose as internal requests, while others will pose as external requesters. The most common kind of cyber attacks are impersonation frauds. Criminals impersonate people but also websites. If you haven’t already, set up phishing training for your staff. Most cybersecurity insurers offer it. Encourage vigilance among employees and try to establish a heightened awareness of security risk.
**Implement Proactive Risk Management Strategies **
When vendor and other internal and external financial requests arrive in your inbox, it’s critical to verify the authenticity of the requests in a couple of different ways. First, find your vendor’s phone number and call them to verify the request. But never use the phone number in the suspicious email and don’t click on links. Second, introduce dual control and segregation of duties. These techniques ensure that no one person can complete a transaction like a wire transfer without a second person’s authorization. They effectively decentralize control of a system or process to limit the risk of fraud and errors. If you already have taken these steps, then lower the threshold that triggers dual authorization.
Prepare for the Possible
Despite our best efforts, hacks happen and losses are incurred. Reread your cyber-insurance policy and talk with your broker about the terms and conditions of the policy. Find out what is covered and what isn’t. Evaluate the impact of large scale financial events of this kind to see if they present any exposure to risk for your business. This knowledge will inform your response should there be an attack.
In the wake of the SVB events, caution is the bottom line. Social engineering fraud including phishing attacks may rise in coming weeks. Take steps to mitigate risk and evangelize cybersecurity with your team. With your employees on alert and receiving ongoing training, the threats of cyber fraud are reduced.
Newfront is transforming the delivery of risk management, employee experience, insurance, and retirement solutions by building the modern insurance platform. Transparent data delivered real-time translates into a lower total cost of risk and greater insights. Newfront makes insurance work for you. Headquartered in San Francisco, Newfront has offices throughout the country and is home to more than 850 employees who serve clients across the United States and globally.