Keeping assets and data safe

Protecting investors is our number one priority.

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Rebecca Katz: Well let’s spend a moment on technology. We’ve actually just gotten quite a few questions in on cyber security, so it’s a totally different approach to technology; but, obviously, one of the concerns our investors have is, is their money safe and do we have to worry about hacking and things like that?

So, Tim, maybe you could touch on a little bit about cyber security and some of the things Vanguard does to protect against that.

Tim Buckley: I think it’s the right to ask. It’s our number one priority. If you invest with us, we have to keep your assets safe. That’s the trust you put in us, and we can never take that lightly, so it’s our biggest investment every year is fighting against cyber threats. So cyber security is our number one investment, and we don’t think of it as just one piece. If you think about when it’s done well—“defense in-depth” is the industry term—we’re looking to make sure that, yes, it’s very tough to penetrate into Vanguard. That when patches need to be made, they’re made immediately. We assume that someone, they get through; and if they get through, do we limit their ability to move around within Vanguard? Within our network? And if they get to something, is it encrypted? Can we watch what they do? Can we repair what they do? All of these questions have to be asked.

And we won’t go into the details of how we do what we do, but we see it as our number one priority. Greg may not like to hear that, and his number one is actually to actually earn the return. First thing we’d say, number one, is make sure you don’t lose their money; and you don’t jeopardize their data. Second is to make sure we give them the proper return on it, so it will always be a high priority for us.

I wish it weren’t the case. I mean I got to see this mature. I was the Chief Information Officer back in 2001 when this started to really take off. It’s amazing to see how advanced it is now, but I also know that we’ll never be able to rest because as soon as you think you’re good, that’s when you’re vulnerable.

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