Retirement savings vulnerable to cyber attacks, says InPayTech

The complexity of Australia’s super system could provide fertile ground for hackers to steal your savings and your identity.

Retirement savings vulnerable to cyber attacks, says InPayTech

Your retirement savings are part of a pool worth about $2.9 trillion – a pool that is becomingly increasingly interesting to cyber criminals.

A new white paper from payment technology company InPayTech also notes that the retirement savings pool is set to grow from $2.9 trillion to around $4.75 trillion by 2027.

This makes the superannuation ‘ecosystem’ incredibly attractive to identity thieves and hackers, and the money and information kept in these virtual coffers will become more vulnerable as the retirement sector becomes more complex, says InPayTech.

The Keeping Our Money Safe: Data and Security of Payments in 2020 report quotes KPMG predictions that the current number of super funds will halve in the next decade and that banks will pull out of the super sector altogether. When this occurs, we will see consolidation of multiple accounts on a massive scale.

A by-product of this mass consolidation will be a morphing of ‘big data’ into ‘mega data’ and the increased use of cloud storage technological solutions and experiments that “will make superannuation funds, employers, pay-tech providers and others in the ecosystem increasingly meaningful and potentially vulnerable targets for identity theft cyber-security breaches and other technologically enabled disruption”.

The smaller number of ‘mega-funds’ managing a larger pool of assets and the processes required to combine these funds and information “will make fund members’ data more vulnerable to errors and security breaches, requiring significantly enhanced attention to data mismatch and error management, and increased knowledge transfer and cooperation between funds and other third parties in the eco-system,” says the report.

“Fund trustees will be required to allocate greater resources and attention to technology, cyber-security and related risks, and the roles of chief risk officer and chief technology officer will acquire greater budgets and significance in the internal hierarchy than is currently the case.

“In a digital world made smaller by technology, our greatest combined challenge is to invest in, design and implement technological solutions that limit the risk of loss, whether by accident or the design of an increasingly sophisticated network of global cyber criminals.”

The Australian Institute of Criminology’s Identity Crime and Misuse in Australia 2017 report estimated the costs of identity crime in Australia in 2015-16 to be $2.65 billion. InPayTech quoted this statistic and “the recently stolen identities of thousands of consumers resulting in more than $10 million being ripped from retirement and share trading accounts” as a catalyst for retirement funds to be on guard.

“The continuing growth in the retirement savings pool, ‘big data’ becoming ‘mega-data’, increasing use of cloud-based data storage, the ‘Internet of Things’, and other technological advances will make superannuation funds, payroll providers, employers and other participants in the eco-system increasingly meaningful and potentially vulnerable targets for cyber-security breaches and other disruption.

“All eco-system participants will need to continually invest to counter these threats when developing their own products and services and in their interactions with others.

“The relationship between the hacker and a superannuation fund, payroll provider, employer, or pay-tech or related third party vendors is an asymmetric one.

“The hacker only has to be successful once, whereas the other stakeholders must be successful 100 percent of the time.”

Are you worried about your savings? Or do you accept that this is just a part of modernisation?

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    COMMENTS

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    TREBOR
    7th Nov 2019
    11:52am
    Who needs hackers when you've got funds to remove your ready?
    Mad as Hell
    7th Nov 2019
    1:12pm
    I’m more worried about the LNP and Greens having another go at my part pension.
    Mariner
    7th Nov 2019
    3:44pm
    MAH - you have no worries if you keep spending, me in same position and every week I have less than the week before.
    Live every day as if it's your last, one day you get it right!
    Priscilla
    7th Nov 2019
    1:24pm
    So much for the 'wonderful' internet and card systems.
    Mariner
    7th Nov 2019
    3:41pm
    Use a bank and the post office and do not trust the net would be the answer. But then the banks want us all to use internet banking. Don't fall for it.
    Rae
    7th Nov 2019
    1:44pm
    Doubt the hackers will take more than the $32.5 billion the financial sector is taking. Recipe to make oodles of money from willing victims.

    Privatising the retirement sector will not work any better than any of the other privatisations going on.
    KSS
    7th Nov 2019
    2:21pm
    You can't stop hackers any more than you can stop burglers to your home. All you can do is make it more difficult for them so they go elsewhere with easier pickings.

    In terms of the on-line environment making it harder for identity theives means not putting personal information 'out there', not using public wifi to conduct any form of financial transaction etc. There are many bits of advice available for the individual.

    However, people are very blase about their data. Think about the MyHealth records. All well and good in theory until the hackers get in as they did in Singapore! And if it is not the hackers, its business selling your data!

    Ultimately all you can do is be vigilent: check your own accounts even with telcos (there have been cases in the last couple of weeks with people receiving bills for telephone accounts they 'don't have'), and make it as difficult as possible for anyone to steal your identity.
    Mariner
    7th Nov 2019
    3:39pm
    Was on a recent trip to Hiroshima and various other places over there. Most Aussies immediately went to the nearest wifi spot and did their financials there as well as sending selfies to the rellies back home. Did not even put my credit card into slots over there. KSS, you are right - be vigilant!
    Mootnell
    7th Nov 2019
    2:59pm
    I’m more worried about the ‘bail in’ laws taking my savings.