Cybersecurity breach main reason to review mandates, study finds

A cybersecurity breach has been cited as the top reason by institutional investors to carry out an unplanned review of a mandate.

Just under 60% of investors saw cybersecurity issues or an increase in fees as reasons to review a fund manager. A change in fund manager could also prompt a re-evaluation among 54% of investors, the study by CoreData Research found.

For smaller firms, cybersecurity concerns are more pronounced. Among organisations with under $250 million in assets, 68% said a security breach would trigger a review.

“These findings underscore just how important an issue cybersecurity and data protection has become for institutional investors,” said Craig Phillips, head of international, CoreData Research.

“Asset managers looking to win and retain long-term institutional mandates need to put cybersecurity at the top of the agenda and ensure their cybersecurity infrastructure and controls are robust and current.”

Half of the 117 global institutional investors also saw a shift in investment style as reason to review a mandate, while 42% said a significant change in assets under management would prompt them to do so.

© 2020 funds europe

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