December 13, 2018

JP Morgan Fine shows that IT failings can be expensive

As the saying goes, it can take years to win a customer and seconds to lose one. Putting the clients’ interests first has to be every reputable company’s number one objective. But even the largest companies can fall foul of meeting this core principle, as a recent case involving JP Morgan’s UK wealth management company proves.

The investigation carried out by the Financial Conduct Authority (FCA) revealed the company had system failings that exposed customers to the risk of inappropriate investment. This included incomplete and up-to-date records with gaps in information on client objectives, risk tolerance and investment experience. It also found limitations in the computer-based system, which was unable to store enough information. The company was fined £3.1m.

JP Morgan is by no means alone in their recent exposure. It follows a thematic review by the FCA of wealth management firms and the suitability of their advice. But for a trusted and respected financial service institution that prides itself on putting its clients’ interests first, such events can have catastrophic reputational impact.

Where once a client may have viewed their procedures as unquestionably world-class, some may now view them with a jaundiced eye. The client may start to question whether they can be confident the company has sufficient procedures in place to keep their information safe and secure. And even whether they have a data backup process in place to restore information in the event of a man-made or natural disaster such as a fire.  

IT failings such as this highlight the importance for companies to take every aspect of their IT seriously. Not simply for compliance but to protect them from reputational damage and substantial business loss. While JP Morgan will inevitability weather this storm, many companies fail to realise how long it can take their business to recover from a disaster that could easily have been avoided. This is particularly the case with a server crash, which can have devastating consequences without the right backup and recovery solution.

In such instances an effective disaster recovery solution can keep a business up-and-running by enabling staff to access all their data and files on replicated servers. This is of particular benefit to businesses and their employees who need real-time information to continue working, preventing staff downtime, customer frustration and loss of business revenue.

But just as important is the message such proactive measures send to clients. They tell them the company is professional in everything it does. That message translates into one of reassurance and trust, a confidence every finance organisation in particular strives to instill.

ABOUT DATAFORT

DATAFORT provides dependable and secure data protection services that offer enterprise-level functionality with a focus on security and reliability. Its software and services are used by thousands of organisations worldwide, ranging from SMBs through to large enterprises and local government departments. Every hour of every day someone, somewhere backs up with DATAFORT. The company was founded in 2000, is headquartered in Guildford, UK and has offices in London and New York. For further information please visit www.DATAFORT.com or call 0800 45 44 35.Guildford, UK and has offices in London and New York.

Press and analyst contacts:

Nabeel Qureshi
DATAFORT
01483 872 052

email:Sarrah@a3communications