The topic of intensified cyber risks in the financial sector, driven by reliance on AI, cloud services and tokenisation, was addressed by Dr. Ruth Wandhöfer, director of European markets at cyber defense platform Blackwired, and Neil Coutts, director of cyber and technology risk at KPMG at a FundsTech 2026 panel held in London today.
Wandhöfer pointed to rising cybertech attacks, adding that data — “the new oil”—is being targeted for theft and manipulation. The industry must shift its focus to understanding its adversaries, emphasising that “preempting is key,” she said.
Preemption is crucial given new vulnerabilities such as AI-driven prompt injection, which can manipulate trading models and client data, and smart contract weaknesses, which can lead to cascading losses or private key theft in tokenised asset ecosystems. To mitigate these systemic risks, she stressed the need for systems to have guardrails and for firms to control the data used to train their large language models (LLM).
Wandhöfer said that board involvement in asset management firms is critical, urging firms not to rush product rollouts but to use “sandbox testing before rollout” and focus on quantum resilience.
Coutts highlighted the growing operationalisation of AI within asset management, noting that organisations are using LLMs in various areas such as customer reporting to fraud detection and money laundering. He thinks “agentic is the next shift”. However, this transformation introduces complexity, exacerbated by third-party risk—a challenge for firms relying on interdependent supply chains.
Coutts also stressed why cyberhygiene is becoming crucial for asset managers and why firms must ensure a “100% patch in to protect vulnerability.”
He added that while the asset management industry must prepare to migrate its operations to quantum sooner than expected (The European Commission has adopted a Quantum Strategy to position Europe as a global leader in quantum by 2030) , the level of appreciation is low and many firms still treat it as a “niche future-looking issue.”
Coutts stressed the need for engagement, stress testing and raising awareness with reports like the Bank of England’s CBEST report.
Both experts agreed that, as technology and regulatory frameworks evolve, sustained vigilance and strategic governance will define the sector’s ability to maintain operational integrity.
