News reports recently have been full of tales of cyber attacks against financial institutions. From credit reporting bureau Equifax to the Securities and Exchange Commission, to accounting giant Deloitte, no institution seems to be safe from hackers. With a society that does an increasing amount of business online, that potential vulnerability could wreak havoc on savers and investors.
More and More Banking Done Online
As the Internet continues to mature, more and more people engage in financial transactions online. In 2013, 51% of adults in the United States used online banking. By 2017, that figure had risen to 81%. While online banking has made it more convenient for consumers to bank, it has also provided additional opportunities for hackers to make mischief.
The obvious problem with online banking is the security of the bank account itself. The only protection against most intruders is a username and password. Those who are more interested in security may enable two-factor authentication. But even a strong password and two-factor authentication are no match for a determined hacker.
Many hackers rely on social engineering hacks, relying on their knowledge of an individual’s personal data to take on someone else’s identity. In many cases, a hacker just needs to know your name, address, date of birth, and last four digits of your Social Security number in order to call in to a bank and pretend to be you in order to drain your bank account.
The customer service representatives they talk to don’t know you from Adam, so they assume that anyone who has that information, or who can answer certain security questions (the answers to which can be easily guessed or discovered elsewhere) is you. By the time you discover that something is wrong, the damage may be done.
Hackers could even open up other accounts in your name without you being any the wiser. The Wells Fargo account scandal showed how easy that was, as millions of accounts were falsely opened in customers’ names by Wells Fargo staff. Anything that can be rigged like that within the company can be accomplished just as easily by motivated hackers outside the company too.
Online Retirement Services
Millions of Americans also access their retirement accounts online. Whether that be a 401(k), mutual fund, or online brokerage, those accounts are also susceptible to hackers. Many Americans don’t check their account balances on a regular basis, so as to resist the temptation to engage in short-term trading. They may only check their accounts once a year, at tax time, to check how much capital gains income they need to report or to get details on distributions that may have been made.
That means that there is plenty of time for determined hackers to figure out how to drain your retirement account. While setting up a new destination for funds transfers often require a written letter with a signature, if your existing destination is commandeered by hackers, then they can easily find out where you have your retirement accounts, try to social engineer their way into those accounts, and relieve you of your retirement savings.
Government Agencies Not Immune
While there have been calls for government agencies to “do something” about this spate of cyber attacks, government agencies themselves are not immune. The Securities and Exchange Commission (SEC) itself saw its computer network hacked, with the intruders using the confidential information they found to engage in profitable stock trading, benefiting from that insider information.
And everyone still remembers the hack of the Office of Personnel Management (OPM) hack from a few years ago, in which the personal identifying information of over 20 million current and former federal workers was stolen. Digitizing large amounts of information may be useful for companies and government agencies that want to have access to large amounts of data at their fingertips, but that makes for a very tantalizing target for hackers.
How to Prepare
It’s only a matter of time before hackers turn their sights from the low-hanging fruit of stolen credit card numbers, identity theft, and bank account hacking towards more lucrative targets such as retirement accounts. Given how much money sits in the average retirement account and how easy it can be to transfer funds, your money could be gone before you know it. That’s particularly true given how long it takes some companies to realize that their systems have been hacked and then to report it to authorities and to the public.
One of the best ways you can protect yourself against online hackers is to diversify your assets so that they’re not all held and/or available online. Holding a portion of your assets in gold and silver, in particular, can help protect you, especially if you hold them in a gold or silver IRA.
Precious metals IRAs offer you the same tax benefits as traditional IRAs, but you get the safe-haven protection of precious metals and the security of knowing that your assets are being held by a registered and insured depository. Your gold or silver will be sitting in a vault and won’t move until you decide it should. While gold and silver IRAs make it easier and more convenient than ever to invest in precious metals, it isn’t so easy for would-be criminals to divest you of your possessions. The safeguards that are in place both with precious metals IRA providers and with gold and silver depositories are set up to minimize the possibility of fraudsters gaining access to other people’s precious metals deposits.
If you’re worried about the safety and security of your bank deposits or retirement accounts, or if you think that they’re at risk from cybercriminals, you owe it to yourself to look into the benefits of investing in gold and silver. They’re not just safe-haven assets during times of financial crisis, they could protect your hard-earned savings from falling into the hands of ever more active cyberthieves.