Cybersecurity has been a large focus for hedge funds over the past year, and continues to garner attention due to the growing threat of cyber attacks. Read on to learn more about four hedge fund cybersecurity trends your firm should pay attention to in 2015.
Hedge Fund Cybersecurity Trend #1: Data Governance and Auditing for Hedge Funds
Data is by far the most important asset of any hedge fund. Based on the sheer volume of critical and private information hedge funds can hold at any one time, they must take extra care to keep their vital assets protected. With the recent emergence of tightened SEC guidelines on data usage and control access, it is even more important for hedge funds to implement data governance and auditing solutions to protect their essential data assets. To learn more about data governance and auditing for hedge funds, click here.
Hedge Fund Cybersecurity Trend #2: Policies and Procedures to Prevent Hedge Fund Data Breaches
Cyber threats targeting hedge funds are on the rise, and firms need to focus on preventing breaches rather than simply reacting to them. The impact of just one attack, such as a phishing attack or APT, targeting just one employee can have far reaching consequences for an entire hedge fund. One attack can potentially total thousands of dollars in damages and open the hedge fund up to further attacks by weakening internal networks. It is almost guaranteed that firms will encounter potential cyber breaches, so it essential to implement policies and procedures that minimize the risk. In addition to creating policies and procedures, firms should dedicate time to train employees on how to identify and respond to potential threats. While it is impossible to completely remove human error, investing in routine company wide training sessions can help greatly reduce the risk.
Hedge Fund Cybersecurity Trend #3: The Value of a Hedge Fund CISO
The CISO, or chief information security officer, plays an important role within hedge funds by developing policies and procedures to protect their fund against cyber breaches. CISOs are trained to manage internal security processes from both technical and operational perspectives, and work to achieve the optimal balance of security and performance by implementing long term strategies to ensure compliance with strict financial industry and country specific regulations. For many firms, however, a full time CISO isn’t always the best fit. Virtual CISO Services are beginning to emerge as an option for hedge funds that need to rely on experienced security professionals with proven track records in a more cost effective manner. Hedge fund virtual CISO services will typically be offered as an outsourced service through an IT provider, and can provide hedge funds with network security assessments and strategies for improvement. To learn more about Hedge Fund Virtual CISO Services, click here.
Hedge Fund Cybersecurity Trend #4: Hedge Fund Cloud Security
The use of cloud service models within the hedge fund industry is growing, and for good reason: cloud models offer a cost effective and flexible environment that accommodates growing organizations and doesn’t require upfront investment (Capital expenditure). Private clouds are usually the best cloud model for hedge funds due to their heightened level of security. A true private cloud is a technology environment that is either built internally or by an outsourced IT provider, and provides firms access with a private virtual data center. Private clouds allow for improved control, privacy and security of users’ data by offering services such as managed backup, intrusion detection and disaster recovery replicated across multiple data centers.