A.R. Perez, Netlok, June 12, 2025
Despite facing significant cybersecurity threats, many family offices continue to operate with inadequate defenses, creating a dangerous disconnect between risk exposure and preparedness. Understanding the underlying causes of this vulnerability reveals systemic challenges that go beyond simple oversight.
The Scale of the Problem
The cybersecurity preparedness gap among family offices is striking. While 43% of family offices globally have experienced a cyberattack over the last 12-24 months, nearly one-third (31%) lack a comprehensive cybersecurity strategy, leaving them woefully unprepared 16. In North America, the situation is even more concerning, with 57% of family offices reporting cyber incidents during recent periods 9. Despite these alarming statistics, only 31% of family offices say their cyber risk management processes are well-developed 1.
Root Causes of Unpreparedness
Underestimation and Misperception of Threats
Many family offices fundamentally underestimate their attractiveness as targets and the sophistication of modern cyber threats 19. A significant factor contributing to this vulnerability is the belief that “privacy equals security” – the misguided notion that operating “under the radar” provides adequate protection 19. This mindset leads to a dangerous miscalculation where family offices assume they’re too small or obscure to warrant sophisticated attacks 20.
Research reveals that 47% of family offices acknowledge that underestimating the threat level obstructs the implementation of risk management measures 3. Additionally, smaller and newer family offices are particularly vulnerable, with only 15% accurately assessing the likelihood of cyberattacks compared to 25% at larger family offices 3.
Complacency and Reactive Approaches
A pervasive culture of complacency significantly hampers cybersecurity preparedness among family offices 13. Studies show that 41% of family offices cite complacency as an obstacle to implementing risk management measures 3. This reactive mindset is further evidenced by the fact that 33% of family offices have adopted a “reactionary rather than preventative approach” to cybersecurity, an increase from around 25% in previous studies 21.
As one US-based single family office CEO noted, “Many people do not react to cyber threats until they have been attacked” 2. This wait-and-see approach leaves offices vulnerable to increasingly sophisticated attacks that target the “low-hanging fruit” 2.
Resource and Budget Constraints
Unlike large enterprises, family offices often lack the financial resources for comprehensive cybersecurity infrastructure 21. Only 33% of family offices report having a dedicated cybersecurity budget, forcing many to rely on inadequate solutions 5. The typical family office operates with a small staff ranging from 2 to 25+ members, making it challenging to allocate personnel specifically for cybersecurity functions 7.
The resource limitation extends beyond budgets to human capital. Just 8% of family offices have in-house cybersecurity personnel, and 67% have not hired third-party defense providers 1. This staffing gap means that cybersecurity often becomes an afterthought rather than a strategic priority.
Organizational Structure Challenges
Family offices face unique structural challenges that impede effective cybersecurity implementation. Many operate more like small businesses when it comes to cybersecurity infrastructure while managing wealth comparable to mid-sized enterprises 2023. This creates a dangerous mismatch between resources and risk exposure.
The fragmented nature of family office operations compounds these challenges. Many use disparate systems that don’t communicate effectively, creating security vulnerabilities and making comprehensive protection difficult to implement 29. Without proper integration, family offices struggle to maintain consistent security protocols across all their technological touchpoints.
Third-Party Vendor Risks
Family offices increasingly rely on external vendors and service providers, creating additional vulnerabilities they may not fully understand or manage effectively 2830. There has been “a huge uptick in third-party vendors having cybersecurity incidents and then reporting them back to the data owner,” creating cascading security risks 28.
Family offices without proper processes to vet third-party vendors significantly increase their risk exposure through insecure connections and compromised vendor relationships 30. This is particularly problematic given that many family offices outsource critical functions without implementing adequate vendor security oversight.
Lack of Awareness and Training
A critical gap exists in cybersecurity awareness and training across family office organizations. Fewer than 25% of family offices have implemented basic protections such as phishing simulation tests, security awareness training, external penetration testing, or defined incident response plans 5.
The challenge is compounded by the diverse technology adoption patterns within wealthy families, ranging from tech-savvy younger members to “tech-averse octogenarians” 13. This spectrum of cyber hygiene habits makes it difficult to implement consistent security protocols across all family members and staff.
The Human Factor
Cybersecurity experts emphasize that most cyberattacks don’t happen through technology failures but because of people and process weaknesses 16. Family offices are particularly vulnerable to social engineering attacks because cybercriminals can often gather extensive information about wealthy families through social media and public records 18.
The younger generation’s increased online visibility has inadvertently exposed families that previously maintained tight privacy controls 18. As one expert noted, “The younger members of the family are outing families that have kept a really tight lid on their wealth for a long period of time” 18.
The Cost of Inaction
The consequences of inadequate cybersecurity preparedness extend far beyond immediate financial losses. Among family offices that have experienced cyberattacks, a significant one-third have suffered some form of loss or damage, with operational damage and financial loss being the most common consequences 9.
The average cost of a data breach globally approaches $4 million, with individual family offices at risk of losing up to $500,000 in ransom payments alone 10. Beyond direct financial impacts, successful attacks can severely damage reputation, erode trust, and lead to regulatory inquiries and litigation 14.
Moving Forward
The persistent unpreparedness of family offices despite high cyberattack risks reflects a complex interplay of psychological, organizational, and resource-related factors. Addressing these challenges requires a fundamental shift from reactive to proactive cybersecurity approaches, supported by dedicated budgets, specialized expertise, and comprehensive risk management frameworks.
As cybersecurity threats continue to evolve and become more sophisticated, family offices can no longer afford to operate under the assumption that their size or privacy provides adequate protection 16. The time for reactive measures has passed; proactive cybersecurity investment has become an operational necessity rather than an optional consideration.
A. Perez, Netlok, 6/9/2025
Supreme Court Allows DOGE Access to Social Security Database: Privacy Implications for the Future
The Supreme Court Ruling
On June 6, 2025, the U.S. Supreme Court ruled 6-3 to allow the Department of Government Efficiency (DOGE) unfettered access to Social Security Administration (SSA) databases containing sensitive personal information on millions of Americans 1, 2, 3. The Court granted the Trump administration’s emergency request to lift a lower court injunction that had previously restricted DOGE’s access to these systems due to privacy concerns 4, 5.
In an unsigned three-paragraph order, the majority concluded that “under the present circumstances, SSA may proceed to afford members of the SSA DOGE Team access to the agency records in question in order for those members to do their work”6, 7. The decision overturned a ruling by U.S. District Judge Ellen Hollander in Maryland, who had found that DOGE’s broad access likely violated federal privacy law 8.
This SCOTUS decision concerns Netlok and other cybersecurity companies because we are required to protect Personal Private Information (PPI). However, if DOGE’s collection and storage of PPI is hacked into by nation-states and bad actors, PPI becomes public information, which begs the question, “Is Privacy Dead?”
What Data is at Risk
The Social Security Administration’s databases contain some of the most sensitive personal information held by the federal government 9, 13. This includes:
As privacy expert Kathleen Romig, a former SSA employee, noted, the agency possesses personal data about most Americans that spans “from cradle to grave”13.
Legal Challenges and Privacy Act Violations
The Privacy Act of 1974
The legal battle centers on the Privacy Act of 1974, a Watergate-era law designed to protect Americans’ personal information from federal government misuse 12, 17. This landmark legislation establishes strict limitations on how federal agencies can collect, use, and disclose personal information, requiring consent for most data sharing and imposing penalties for unauthorized access 17, 18.
Legal experts argue that DOGE’s access represents “an egregious violation of the Act” and potentially “the worst violation of the Privacy Act since its enactment in 1974” 18, 19. More than a dozen lawsuits have been filed invoking the Privacy Act to challenge DOGE’s data access across multiple federal agencies 20, 23.
Court Dissents and Concerns
Justice Ketanji Brown Jackson, joined by Justice Sonia Sotomayor, issued a blistering dissent warning that the decision “creates grave privacy risks for millions of Americans” 24. Jackson criticized the majority for allowing DOGE “unfettered access to this personal, non-anonymized information right now — before the courts have time to assess whether DOGE’s access is lawful” 47.
The dissenting justices emphasized that the government had failed to demonstrate any necessity for bypassing existing privacy protections 24.
Privacy Implications Going Forward
Weakening of Federal Privacy Protections
Privacy advocates warn that this ruling sets a dangerous precedent by prioritizing administrative efficiency over individual privacy rights 29. As American Oversight Executive Director Chioma Chukwu stated, “The Court’s shielding of those in power while stripping protections from the American people sets a dangerous precedent and is exactly backwards in a functioning democracy” 2.
The decision effectively undermines the foundational principle that has governed SSA for nearly 90 years: an expectation of privacy concerning its records 24. Legal experts worry this could “turn privacy law into an empty promise” 9.
Expansion of Government Data Access
The ruling may embolden similar data-sharing initiatives across the federal government 27. DOGE has already sought access to sensitive databases at the Treasury Department, Education Department, and Office of Personnel Management 10, 14. The Supreme Court’s backing of DOGE’s Social Security access could facilitate broader government data consolidation efforts 11, 15.
Increased Risk of Data Breaches and Misuse
Security experts have raised alarm about the risks associated with DOGE’s data access practices 25, 28. Recent investigations have revealed over 150 government database servers exposed to the internet, creating unprecedented vulnerabilities to cyberattacks 25, 28. The combination of expanded data access and weakened security protocols creates “grave privacy risks” for millions of Americans 4.
Future Legislative Response
The ruling is likely to accelerate legislative efforts to strengthen data protection laws 27. Congress is already considering bills like the Social Security Data Protection Act, which would impose strict audit requirements on agencies handling sensitive information 27. State-level privacy legislation may also be strengthened in response to federal privacy rollbacks 27.
Expert Analysis and Ongoing Concerns
Privacy law experts have described DOGE’s data practices as representing a fundamental shift away from established privacy protections 18, 20. Professor Danielle Citron noted that the Privacy Act was created specifically to address concerns about government agencies accessing sensitive databases without proper safeguards 12.
The American Civil Liberties Union has demanded transparency about DOGE’s data practices, filing Freedom of Information Act requests to uncover the full extent of the agency’s access to Americans’ personal information 11. The organization warned that DOGE has already started “removing some protections around personal data” 11.
Democracy Forward, representing the plaintiffs in the Social Security case, stated that the ruling would “jeopardize the data of millions of Americans” and vowed to continue using “every legal avenue available to prevent unelected officials from misusing the public’s most sensitive information” 24.
Conclusion
The Supreme Court’s decision to allow DOGE access to Social Security databases marks a significant erosion of privacy protections that have safeguarded Americans’ personal information for decades 2, 18. While the administration argues this access is necessary to combat fraud and modernize government systems 6, 10, privacy advocates warn of unprecedented risks to data security and individual privacy rights 2, 19.
The ruling’s long-term implications extend beyond Social Security data, potentially opening the door for expanded government surveillance and data collection without adequate oversight15, 27. As legal challenges continue in lower courts, the ultimate impact on American privacy rights will depend on how aggressively the government pursues data access and whether Congress acts to strengthen privacy protections 20, 23.
The cybersecurity landscape has undergone a fundamental transformation as artificial intelligence democratizes steganography attacks while simultaneously creating new defensive opportunities. Steganography bots—AI-powered automated systems that hide malicious code within seemingly innocent files—have emerged as a critical threat vector that bypasses traditional security measures with unprecedented sophistication.
Key Findings:
Threat Escalation:
Market Impact:
Defensive Innovation:
AI-Powered Steganography Bots
Technical Sophistication: AI systems are more interconnected and data-driven than ever, making them ripe targets for steganographic attacks. Attackers can corrupt training datasets with malicious or poisoned data, causing AI models to make incorrect or dangerous decisions
Attack Vectors Include:
Automation and Scale
Bot-as-a-Service Evolution: ByteSpider Bot was responsible for 54% of all AI-enabled attacks, with other significant contributors including AppleBot at 26%, ClaudeBot at 13%, and ChatGPT User Bot at 6%
Market Commercialization: 31 additional online threat actor groups were identified in 2024, with the largest having 6,400 users. Tool-selling groups serve 68% (23,698) of users, indicating their effectiveness and credibility
Nation-State Operations
Industrial Targeting: According to Kaspersky, up to 50% of steganography attacks targeted industrial organizations, with attacks being particularly difficult to detect because the files appear legitimate to traditional security tools
Supply Chain Infiltration: Some attacks take advantage of network interconnectivity between organizations and their smaller vendors/suppliers with weaker protections. By harvesting vendors’ credentials, attackers can remotely affect larger organizations’ networks
Steganography-Based Authentication Solutions
Photolok’s Market Position: Netlok’s Photolok appears to be the only mainstream commercial IAM solution that specifically uses steganography technology to prevent AI attacks. Photolok is “the first passwordless login that uses patented steganography photos as a standalone MFA IdP login method”
Competitive Advantages:
Detection and Mitigation Technologies
Advanced Defense Systems: Owl Cyber Defense’s advanced cross domain solutions (CDS) are purpose-built to detect and mitigate data threats transferred between sensitive systems, including steganographic content embedded within data
Deep Learning Steganalysis: Deep learning-based steganalysis approaches exhibit rapid detection of steganographic payloads and demonstrate remarkable accuracy and efficiency across a spectrum of modern steganographic algorithms
Financial Impact Assessment
Cybercrime Economics:
Password Management Costs: The average cost to reset passwords for employees ranges from $15 to $70 per password reset incident, with organizations typically reporting that password resets consume 20-30% of IT help desk resources
Recovery Statistics: In 68% of ransomware incidents, backups aided in the recovery process, demonstrating the critical importance of robust backup strategies
Market Growth Projections
Authentication Market Expansion:
Industry-Specific Vulnerabilities: Manufacturing industry accounts for the largest share of ransomware IR cases at 18.6%, followed by healthcare at 13.1%, and construction at 12%
Competitive Landscape Analysis
Market Positioning: Based on comprehensive search, there don’t appear to be any direct commercial competitors to Netlok’s Photolok that specifically use steganography for IAM authentication to combat AI attacks
Technology Differentiation:
For Organizations
Immediate Actions:
Strategic Investments:
For Security Vendors
Product Development Priorities:
Market Positioning:
Investment Themes:
Risk Considerations:
Industry Reports & Research
Technical Documentation
Solution Providers
Market Intelligence
Regulatory & Compliance
Report compiled from proprietary research, industry documentation, and current threat intelligence. All financial projections and market data current as of Q1 2025.
In the daily operations of a business, it’s normal for employees to need to access multiple accounts or collaborate across accounts to get their work done. In some cases, though, it may be impractical to have multiple accounts for the same service. When this happens, it’s common for employees to share passwords.
Password sharing in a business setting can be dangerous, exposing sensitive company information to outsiders who may use it for ill intent. There are a few ways you can mitigate this danger, but first, it’s best to understand why password sharing happens and what exactly those dangers are.
According to research conducted by popular survey company Survey Monkey, an estimated 32 million employees in the United States share passwords. But why? Per the respondents to this survey, most people who share their passwords (about one-third of participants), at least in a work setting, do so to collaborate with their teammates. Other reasons found in the survey included following company procedures and reducing costs.
This makes sense; a company may not have the resources to pay for separate subscriptions to certain services for all of their employees or may not use the service enough to justify the extra cost. Having some employees share a single paid account might be more practical in these scenarios. Additionally, having everyone work from the same account can make collaboration easier by allowing employees to save their work to the same location and access others’ work as needed without the intermediary steps of sharing documentation through messaging or emails.
As common as it is, though, password sharing can still be dangerous.
The first and most obvious risk of sharing passwords is that of the person with whom the password is shared being a bad actor. Phishing schemes are incredibly common, accounting for 3.4 billion spam emails sent every day and being the most common cause of data breaches. These scams rely on a person voluntarily sharing their password with a party pretending to be some kind of authority.
Even if the person with whom you are sharing your password is not a bad actor themselves, however, password sharing can still lead to accessing sensitive information through unsecured networks. It is incredibly difficult to regulate server access if employees share information and access it via external networks such as remote office setups or public computers.
Additionally, if any changes are made to the sensitive data via an external network, tracking who made the changes and why is much more difficult. This may mean that your internal data is susceptible to abuse by jaded former employees or dishonest employees looking to profit from your work in some way. This may mean anything from unauthorized social media posts that may greatly damage the company image to the misuse of customer information to potential serious loss of revenue.
All of this being said, there will still be scenarios in which you may need to share an account across multiple employees or access points. Here are some tips from Forbes on how to share passwords safely.
It’s also a good idea to implement multi-factor authentication into all of your accounts. MFA adds layers of security to accounts and limits access to those with the appropriate information and identifying factors. Consider adding a more advanced MFA solution such as Photolok to your data. Photolok, a new technology from Netlok, allows users to upload and label photos to be used as identifiers; they simply select their photo from a grid to access their account. There is also an option to create a Duress photo, which will allow access for the user in the event of a forced authentication but will also alert the appropriate authorities so that the breach can be addressed quickly and safely.
If you are a business looking to implement MFA, consider using a more advanced authentication method such as Photolok IdP. Photolok is a passwordless IdP that is simple, effective, and offers a range of benefits including AI and ML defense, device authorization, and one-time-use authenticators. With Photolok, users select images and label them for security use. When accessing a network, application, and/or API, users simply choose their account photos in several photo panels, and they are given access. Users can also label a photo as Duress, which acts as a silent alarm. The Duress option allows the user access but notifies IT administrators that the user’s account is compromised and they need to execute the company’s security procedure quickly to protect the company and the user’s safety.
Read More: Phishing Attacks Surge By 173% In Q3, 2023
Read More: The Need for a Paradigm Change to Mitigate Password Vulnerability From Artificial Intelligence
Read More: Fortify Security: Investing in Advanced Authentication Solutions
With the Biden Administration announcing new guidelines for AI safety – including requiring innovators to share critical information with the federal government – it is clear that cybersecurity stakeholders must also defend against the serious threat AI poses to online security, privacy, and data protection.
Fortunately, Photolok IdP is available today and has been tested and found to protect against AI attacks. Photolok, a passwordless IdP, employs photos in place of passwords and uses OAuth for authentication and Open ID Connect for integration. To understand Photolok and how it protects against AI attacks, it is important to understand how AI/ML tools and techniques have made it easier for hackers to get around current password security methods.
AI/ML tools are enabling hackers to scrape the internet for personal data and find passwords. When combined with social engineering, AI technics can decipher passwords far more quickly than earlier systems. The reality is that AI password crackers can breach most passwords in seconds and more difficult ones in minutes. For example, hackers can attempt millions of possible passwords each minute using AI-driven brute-force attacks that enable hackers to take advantage of password complexity flaws. While longer passwords and phrases make it more challenging, as computational capabilities of AL and ML continue to evolve, those solutions will experience a significant reduction in efficacy.
AI technologies are also negating the cybersecurity value of two-factor authentication. For example, the common use of CAPTCHAs, known as Completely Automated Public Turing test to tell Computers and Humans Apart, are becoming obsolete. AI bots have become so adept at mimicking the human brain and vision that CAPTCHAs are no longer a barrier.
Making CAPTCHAs more complex is not the answer. Cengiz Acartürk, a cognition and computer scientist at Jagiellonian University in Kraków, Poland, says that there’s a problem with designing better CAPTCHAs because they have a built-in ceiling. “If it’s too difficult, people give up,” Acartürk says. Whether CAPTCHA puzzles are worth adding to a website may ultimately depend on whether the next step is so important to a user’s experience that a tough puzzle won’t turn away visitors while providing an appropriate level of security. AI bots are better than humans at solving CAPTCHA puzzles (qz.com)
Another way AI undermines passwords is via the use of keylogging. The use of AI can enable keyloggers to keep track of your keystrokes in order to retrieve your passwords. According to a University of Surrey study, artificial intelligence can be trained to recognize the key that is being pressed more than 90% of the time simply by listening to it. Using an Apple MAC Pro, the group recorded the sound of 25 distinct finger and pressure combinations being used to press each key on the laptop. The noises were captured during a conversation on a smartphone and during a Zoom meeting. A machine learning system was then trained to recognize the sound of each key using some of the data that had been provided to it. The algorithm was able to accurately identify which keys were being pressed 95% of the time for the call recording and 93% of the time for the Zoom recording when it was evaluated using the remaining data. What secrets can AI pick up on by eavesdropping on your typing? (govtech.com)
To combat these attack vectors, Photolok randomizes photos to mediate AI/ML attacks so that AL/ML tools cannot identify and/or learn any patterns, which prevents AI/ML breaches. Photolok uses steganographic photos (random codes hidden in the photo) to hide the attack points from nefarious hackers, while randomly placing the user’s photo on each photo panels to prevent keylogging and other security attack methods. Photolok also blocks horizontal penetrations and defends against external threats, such as ransomware, phishing, shoulder surfing, and man-in-the-middle assaults.
By Chuck Brooks
Traditionally, strong passwords have been a first-tier defense against cyber-attacks and breaches. However, with the development of AI and ML tools, the effectiveness of cyber-defense has been thoroughly diminished, especially from more sophisticated cyber actors who use AI/ML tools to circumvent password defenses. Despite the drawbacks of passwords, cyber decision-makers (CTOs, CISOs, etc.) have been hesitant to abandon them. But an innovative passwordless solution is available that can facilitate that change from passwords and enhance security strategies. It’s Netlok’s Photolok, a passwordless IdP, which employs images in place of passwords and uses OAuth for authentication and Open ID Connect for integration.
Photolok is user-friendly and provides enhanced security not available with other solutions. Photolok’s randomization of photos mediates AI/ML attacks because they cannot identify and/or learn any patterns and, therefore, prevents AI/ML breaches. The proprietary photos are used to hide attack points from nefarious actors, streamline the login process, and make point-and-click navigation easy to use.
With Photolok, bots are unable to recognize which photographs to attack. Any automated attack is substantially neutralized by the randomization of photo localizations. Moreover, the digital information hidden behind the images—which can be updated every time a login attempt is made—won’t be gathered by the bots. Any automated bot attempt to get access will certainly fail and result in the user’s account being instantly locked out.
Photolok makes the identity authentication journey easier for humans to manage. The photos are easy to remember, connect with people, and provide privacy protection. Photolok’s simplicity makes it intuitive and removes language and literacy barriers that make passwords difficult to operate. Getting rid of passwords also eliminates the costly process of password resetting and following password rules, which makes Photolok very cost-effective. To change and/or add new photos, users select and label a photo that are automatically saved in seconds.
Photolok IdP is an identity provider and an authentication server with Open ID Connect making it easier to integrate apps and APIs. With Photolok, users upload pictures from Photolok’s custom library to be used as identifiers. To authenticate their identity, the user just uploads, labels, and chooses security photos from Photolok’s custom library.
Photolok IdP can be used as a standalone MFA alternative. The availability of robust authentication techniques like multi-factor authentication (MFA) can greatly lower the risk of data loss or compromise and is one of the main benefits of adopting an identity provider (IdP). Photolok MFA IdP can confirm the user’s identity, making it more difficult for malicious parties to access private information without authorization.
Deploying single sign-on (SSO) technology also simplifies the user experience, which is another advantage of adopting an identity provider like Photolok. When used with a federator like Okta Workforce, users won’t need to remember numerous passwords, usernames, or backup authentication techniques, which lowers the total quantity of data that a business’s system must constantly monitor. For example, Netlok uses Photolok to login to its Okta Workforce account to immediately access a wide pool of apps and APIs.
Photolok is the first IdP to offer situational security protection in the public environments or even in unprotected remote work. The Photolok account owner can 1) Give permission for the device and browser to be used for Photolok identity and authentication entry, 2) Utilize the “Duress” photo to trigger an automated warning informing the IT that the account owner is having problems or that a malicious actor is forcing them to access their device, 3) Utilize the “One-Time Use” photo to stop shoulder surfing, and 4) Give permission for the alert message to be sent each time the user opens their account. Photolok is a major innovative development in digital security systems, particularly in its capabilities to mitigate AI generated threats. Photolok effectively removes a great deal of the shortcomings in the current security paradigm. More significantly, Photolok blocks horizontal penetrations and defends against external threats, such as ransomware, phishing, keylogging, shoulder surfing, and man-in-the-middle assaults. In effect, Photolok lessens the user’s burden while improving online digital security, which is essential for widespread adoption by both businesses and consumers.
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