Forex brokers are, of course, well prepared to protect security and secrecy on any kinds of information the clients give them. Nevertheless, there are some things that traders just simply have to do by themselves.
After US-based FXCM disclosed that they were hacked, many have discussed on how often similar attacks suffered by companies in the forex industry, as well as how brokers and traders can protect themselves against them. However, before the month ends, we already heard other similar criminal cybersecurity offense.
Industry-Wide Attacks
Forex industry news source, LeapRate, reported that ActivTrades was also hacked. The London-based broker has sent emails to its clients, informing them that ActivTrades was the victim of a cyber attack in which some client details may have been obtained by the attacker including names, email addresses, and trading account numbers, although no client passwords compromised in the incident. The attack has been handled, and in response, ActiveTrades launched a special promotion program in which the broker offers a 0.1 pips spread tightening on all of its forex pairs.
Just like the previous attack on FXCM, the attack ended well without substantial damages. The culprit is still unknown, but one thing we need to understand: hacking attacks are quite frequent in the financial industry, not only among forex brokers. A Bloomberg tally on corporate data breaches in the US since 2005 (updated on March 18, 2015), showed that the financial and insurance sector along with retail industry experienced the most attacks.
The attacks might stem from malwares like Trojans, purposeful breach from DDoS, or others. Many personal pieces of information have been stolen; as much as 83 million of email and physical addresses in one attack against JP Morgan in August 2014.
Mitigating Risks
In the circumstances, it might be prudent for traders to include hacking attacks as one of the risks in dealing with online forex trading. Just because there has been no substantial damage does not mean things will be as good in the future. Thus, the question of how to mitigate it arises.
Forex brokers are, of course, well prepared to protect security and secrecy on any kind of information the clients give them. Nevertheless, there are some things that traders just simply have to do by themselves. Some of them are:
1. Choose trustworthy, bonafide, and properly regulated forex brokers.
As we can see in FXCM and ActivTrades cases, regulated does not guarantee that there will be no hacking attacks. Nevertheless, regulators may go far in pressuring brokers to maintain their system and credibility.
2. Seek brokers with two-factors authentication.
This is one of the latest security protection against phishing and malware, and your broker may have already put it in place...or not yet. Alternatively, ask your broker to make sure that they have good prevention measures and can react well if hacking attacks occur.
3. Change passwords regularly.
Many people have preached about what makes a good password and the importance of changing our passwords regularly. Considering that we may lose money if disregarding it, perhaps we will start to take care of it.
4. Don't believe in email easily.
One of the most common schemes in cybercrime is done through email bait. Someone may send us an email in a similar layout to our broker's and then mislead us to click some links in it. Therefore, if you receive an email, please pay attention not to click anything within it before contacting your broker and make sure that it is legitimate. Better yet, don't ever change your passwords through a pop-up from an email, as it is most likely a scam.
5. Update anti-virus and anti-malware regularly.
Just as the 'good' side of technology grows fast, so do the 'bad' side of it. For every step the good guys take, the bad guys will not be far behind. Thus, don't let our PC security system obsolete; we may think it wastes time and bandwidth, but remember that things might become worse if we ignore it.