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.”
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