Getting a handle on remote working and compliance issues continues to be a challenge for wealth management firms. Many don’t know when or if they’ll return to offices and pre-pandemic working conditions, prompting many financial services firms to assess the risks of remote working and look for ways to improve security and compliance.
In order to help clients with these challenges, Smarsh acquired Entreda, a cybersecurity risk and compliance management provider for wealth management firms. The acquisition will give Smarsh’s 6,000 financial services clients access to cutting-edge enterprise cybersecurity risk and compliance capabilities.
“In the past few months, more and more companies have asked for our help in addressing the regulatory, compliance and cybersecurity risks associated with the move to long-term remote-work models and the expanded use of mobile and collaborative communications technology, such as Microsoft Teams, Slack and Zoom,” said Smarsh CEO Brian Cramer. “They are seeking smarter integrations, highly responsive service and support, as well as enterprise-level solutions that assist in the capture and supervision of these additional platforms.”
As more people work from home, many financial professionals are using devices and networks that are vulnerable to attacks, creating the potential for confidential client data to be compromised, said Sid Yenamandra, founder and CEO of Entreda. Companies are also vulnerable to data breaches from third-party vendors, themselves staffed with remote workers. Financial firms need to improve due diligence of vendors’ security measures, he said.
“Each of these situations underscores that wealth managers, insurance companies and banks are only as strong as their weakest link when it comes to cybersecurity,” Yenamandra said. “ And cyberbreaches that involve compromised confidential client data can result in millions of dollars in regulatory fines and penalties, as well as untold amounts in legal liability, thereby representing a potential existential threat to financial services firms.”
Entreda, which will be a standalone subsidiary of Smarsh, will help improve risk management of digital communications and advisor systems as well as compliance management for new types of communications tools.
Clients of both companies are excited about the ability to see quick innovation from the deal. “This combination makes it easier for risk professionals to protect and supervise digital communications as well as advisor systems as the industry deals with escalating cyber threats,” said Jason Lish, Chief Security, Privacy and Data Officer for Advisor Group.