In recent years, family offices have become prime targets for cybercriminals, and the likelihood of cyberattacks has risen dramatically.

According to a survey by Dentons, a global law firm, 79% of North American family offices acknowledge this alarming trend. 

The survey, which focused on single-family offices, revealed that a quarter of family offices suffered a cyberattack in 2023, up from 17% in 2020. 

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• In recent years, 79% of North American family offices have reported a dramatic increase in cyberattack risk.

• 25% of family offices experienced a cyberattack in 2023, up from 17% in 2020.

• Less than a third of family offices have well-developed cyber risk management processes or sufficient staff training programs.

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Family Offices Increasingly Targeted by Cybercriminals: Are They Prepared?

Furthermore, half of the respondents reported knowing another family office that fell victim to a cyberattack.

Family offices are attractive targets for cybercriminals mainly because of their vast wealth and often limited staff. 

Edward Marshall, global head of family office and high net worth at Dentons, likened this phenomenon to the “Willie Sutton effect,” referring to the notorious bank robber who targeted banks simply because that’s where the money was.

Family offices typically have a small number of employees with access to highly sensitive financial and private company information. 

Marshall pointed out that family offices often prioritize efficiency and speed over risk management, leaving them vulnerable to cyberattacks due to inadequate technology and planning.

Implementing in-house security teams can be costly for family offices, while relying on third-party vendors and suppliers also poses risks from sophisticated criminals and bad actors. 

Despite the growing concerns about cyberattacks, the survey revealed that less than a third of family offices have well-developed cyber risk management processes. 

Only 29% believe their staff and cyber-training programs are sufficient, and less than half have upgraded staff training programs or regularly update their cyber policies.

The report highlights an alarming discrepancy between the awareness of cybersecurity risks and the actions taken to prevent and combat attacks. 

To address this issue, a separate report from EY U.S. and the Wharton Global Family Alliance recommends that family offices tackle cybersecurity by addressing the three main components of tech risk: hardware, software, and applications.

Instead of sending sensitive financial or personal information via email, the report suggests using a website or intranet site. 

Additionally, password vaults and more thorough vetting of tech vendors for security are recommended.

Marshall emphasized the need for family offices to adopt a more proactive stance on overall risk assessment that extends beyond cyberattacks. 

“They need a mind shift from accepting the unexpected to expecting the unexpected,” he stated.

As cybercriminals continue to target family offices, these organizations must prioritize cybersecurity and implement robust measures to protect their sensitive information and assets. 

By investing in staff training, updating cyber policies, and adopting secure communication channels, family offices can better defend themselves against the growing threat of cyberattacks.

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