The author of this article argues that “digital integrity” now sets the conditions for judging whether a business – such as wealth management – can be considered to be compliant.

The following article comes from Boecyàn Bourgade (pictured below), who is an independent researcher and writer, based in Switzerland. She focuses on the intersection of fiduciary responsibility, compliance, governance and digital risk in private banking and wealth management. Bourgade, who has written for publications such as The European Scientist, The World Financial Review and Fair Observer, aims her insights at senior professionals in private banking, asset management and regulatory functions.

The editors are pleased to share these insights; the usual editorial disclaimers apply to views of guest writers. To comment, email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com

Boecyàn Bourgade

In private banking, fiduciary responsibility has never been exhausted by formal compliance. It rests on something more demanding: the ability to exercise judgment that remains legitimate over time, under scrutiny and in conditions of uncertainty. What is increasingly underestimated is how deeply that judgment now depends on digital systems whose integrity is presumed rather than continuously interrogated.

This is the point at which cybersecurity ceases to be a technical concern and becomes a fiduciary exposure.

Recent supervisory exchanges following cyber incidents across financial institutions illustrate a consistent pattern. Core systems remained operational. Business continuity frameworks functioned as designed. No immediate financial loss materialised. Yet supervisory attention shifted away from procedural adherence towards a more fundamental question: whether decisions taken during and after the incident could still be considered reliable once the informational environment had been altered. The issue was not operational failure but the erosion of judgment validity.

This distinction is decisive. Cyber incidents no longer need to disrupt infrastructure to generate material fiduciary risk. It is sufficient that they alter the conditions under which judgment is formed. When transaction monitoring relies on distorted datasets, when sanctions screening operates on compromised inputs, or when third-party services introduce opaque dependencies, compliance may remain formally intact while its substantive foundations weaken. From an operational perspective, nothing appears broken; from a fiduciary perspective, accountability quietly loses its footing.

Cyber risk continues to be assessed primarily through technical indicators: system availability, recovery time, intrusion attempts, resilience testing. These metrics remain necessary, but they do not address the central concern of fiduciary governance: whether decisions remain defensible to supervisors, clients and courts once digital assumptions no longer hold. Compliance is inherently retrospective. Institutions are judged after the fact, when they must explain not only what was done, but why the judgment exercised at the time deserves continued legitimacy.

As judgment becomes increasingly mediated by digital systems, cybersecurity can no longer be treated as a parallel operational discipline. It conditions fiduciary responsibility itself.

The challenge is not underinvestment. Financial institutions have materially increased cybersecurity budgets over the past decade. The vulnerability lies elsewhere, in governance architecture. Cyber risk is still managed largely as an IT or operational matter, while compliance and fiduciary oversight rely on outputs whose integrity is implicitly trusted. As systems grow more interconnected, adaptive and dependent on external providers, this separation becomes increasingly difficult to justify.

Automated compliance makes this tension visible. Client risk classification, transaction monitoring and fraud detection are driven by layered data pipelines, models and third-party services designed to operate continuously. When data quality degrades or underlying assumptions drift, these systems rarely fail outright. They continue to function, producing outputs that appear coherent and compliant while progressively losing their epistemic reliability. In such conditions, compliance does not collapse; it transforms, often unnoticed, from a regime of control into one of inference.

Traditional cyber metrics are poorly equipped to capture this transformation. A system can remain fully available while generating systematically misleading conclusions. The absence of visible disruption delays recognition until concerns are raised externally, by supervisors or clients. By that stage, institutions often find themselves defending processes that were procedurally correct yet substantively compromised.

This creates a structural accountability problem. Responsibility in digital environments is distributed across internal teams, external vendors and technical layers. Yet from a fiduciary standpoint, accountability remains indivisible. Delegation does not dilute responsibility, and automated outputs do not substitute for judgment. What ultimately matters is whether the institution can demonstrate that the environment in which decisions were produced was governed in a manner consistent with fiduciary standards.

This explains the direction of current supervisory expectations. Regulators increasingly focus on end-to-end responsibility for outcomes rather than formal compliance with controls. The relevant question is no longer whether governance frameworks exist, but whether they remain meaningful when digital conditions evolve in ways that are difficult to observe in real time.

For private banks, the implications are particularly acute. Client relationships rest on discretion, continuity and confidence in institutional judgment. Clients do not distinguish between technical failure and governance failure. When trust is questioned, operational explanations carry limited weight. What is assessed instead is whether the institution anticipated the risk, understood its implications and assumed responsibility at the appropriate level.

Addressing this exposure does not require reducing automation or slowing innovation. It requires recognising cybersecurity as a condition of judgment rather than a support function. Cyber incidents and near misses should trigger not only technical remediation, but a reassessment of the validity of decisions taken under altered informational conditions. Fiduciary governance must be capable of intervening where risk is generated: at the level of system design, data integrity and dependency management.

More fundamentally, institutions must reconsider what digital resilience truly means. It is not merely the capacity to restore systems, but the ability to preserve legitimate, defensible judgment in an environment where decision-making is increasingly mediated by technology.

The next generation of regulatory and reputational failures is unlikely to arise from missing controls or visible breakdowns. It will emerge from situations in which everything appeared to function as intended, until confidence could no longer be sustained. In this context, cybersecurity is no longer simply a mechanism of protection. It has become one of the structural foundations of fiduciary responsibility in modern private banking.