Speaking at ITAS Luxembourg, Long told attendees that every business represented in the room “will be affected by a cyber security incident”.
Coping with the fallout from a cyber security attack “can be extremely painful”, resulting in job losses, a direct impact on profits, and reputational damage and a subsequent dip in share prices.
When the EU’s General Data Protection Regulation (GDPR) comes into effect next year, a cyber breach could also lead to “mouth-wateringly large” fines, Long said, of up to 4 percent of annual global turnover, a deliberately “persuasive figure”.
The new regulation mandates a more controlled process around gaining consent to use a client’s data, introduces a right to object to automated data profiling and a right to erasure, meaning clients can, in some cases, request data to be deleted. It also introduces the potential for individuals to file damages claims in the case of a data breach, even for non-financial loss.
In the financial services space, Long said, firms will have to take a “privacy-by-design, privacy-by-default” approach to data, only collecting the minimum amount and building privacy into processed and procedures in an “antithesis to the world of big data”.
The new rules also mean that where a vendor processes data on behalf of an asset manager, “service agreements will have to be amended”.
To manage cyber risk and the impending new regulatory requirements, Long said risk mitigation is key. Firms should determine their risk profile and get procedures and policies in place to prepare for a data breach, clarifying what the “crown jewels” are, where they are, and who is looking after them.
“Frankly,” Long asked, “are they up to the job?” He advised attendees to first identify the relevant people to have on a breach response team, with coordination between human resources, IT, legal and governance teams.