Cyber threats have overtaken all other worries for United Kingdom’s asset managers, according to fresh research released today by KPMG UK. The findings highlight a dramatic shift in priorities, with nearly all firms now viewing information security as a critical vulnerability in an ever-more digital environment.
KPMG’s annual Wealth and Asset Management Risk and ICARA Benchmarking Survey reveals that 92 per cent of participants placed cyber risk in their top five threats for the next three years — a steep jump from just 52 per cent in the previous edition.
Even more striking, 41 per cent named it their single greatest concern.
Yet financial crime, frequently intertwined with cyber incidents, registered as a major worry for only 18 per cent of respondents.
This gap suggests many organisations may not yet be connecting the dots between these overlapping dangers.
Operational resilience claimed second place, rising sharply by 40 percentage points year-on-year.
Tied for third were concerns around adapting business models, the rapid rise of artificial intelligence, and broader macroeconomic conditions.
Daniel Barry, Partner and Head of Risk & Compliance for Wealth and Asset Management at KPMG UK, noted that the surge in cyber awareness reflects a fundamental change across the sector.
He emphasised that robust protection against digital attacks and data breaches is now essential.
Barry also questioned whether firms truly appreciate the interplay between cyber and financial crime risks, urging a more joined-up approach to assessment and mitigation. Innovation continues to shape strategy.
Four in ten firms intend to introduce retail versions of private-market products.
Within private markets, private credit tops the risk rankings for chief risk officers (49 per cent), followed by private equity (40 per cent) and infrastructure (5 per cent).
Despite these concerns, private credit remains the most popular choice for new retail offerings.
Manual processes and insufficient data automation stand out as the primary compliance hurdles in this space.
Separately, the survey examined wind-down planning.
On average, firms are preparing for an 18-month orderly exit — twice the Financial Conduct Authority’s minimum nine-month benchmark.
Reputation risk featured in 74 per cent of plans, while market stress appeared in 71 per cent, both markedly higher than last year.
Rob Crawford, Prudential Risk Lead for Wealth and Asset Management at KPMG UK, welcomed the extended timelines as evidence of stronger governance focus.
He highlighted the industry’s growing recognition of reputation and market pressures in stressed scenarios.
Regulators remain vigilant.
The FCA has challenged assumptions in roughly 45 per cent of reviewed plans and flagged inadequate operational detail in more than a third of cases, particularly among fast-growing firms or those with prior issues.
The benchmarking exercise drew responses from FCA-regulated firms overseeing a combined £8.7 trillion in assets, spanning wealth managers, boutiques, global players, platforms and integrated businesses.
Overall, the report paints a picture of an industry confronting heightened digital dangers while pushing forward with product development and more thoughtful contingency planning. As threats evolve, integrated risk management and operational readiness are becoming a key priority.
