Can the Cloud Actually Improve Your Hedge Fund’s Security Posture?

Can the Cloud Actually Improve Your Hedge Fund’s Security Posture?

Can moving to the cloud enhance your hedge fund’s security posture? Find out today on the blog!

Not all Clouds are Created Equally

When it comes to the cloud, many hedge funds remain concerned about maintaining appropriate security measures. While the cloud does come with security risks, namely surrounding data privacy issues such as data location and segregation and privileged access control, in certain instances it can actually help improve your firm’s security posture when managed appropriately by a trusted technology partner. The level of security and control your hedge fund will gain from moving to the cloud will depend on which type of cloud model is selected (public vs. private cloud).

Why Choose a Private Cloud for Your Hedge Fund?

Most hedge funds choose to move to a private cloud model because it enables firms to access their own private virtual data center, and allows for enhanced control, privacy, and security of users’ data. While the private cloud is more costly than public versions, it also allows for more customization and control when it comes to protecting data. This is a must for hedge funds.

Public cloud environments are provided through outsourced providers that enable clients to pay a low monthly fee to access a shared hosting environment, making the environment less costly. However, although public clouds offer services at a much lower rate,  they also compromise security and control by offering hedge funds less customization.

Private Clouds Can Mitigate Security Risks for Hedge Funds

The private cloud allows hedge funds to mitigate security threats by automating security patching. In addition to automated patching, using a private cloud service can also ensure that all applications, such as email, CRM systems, or trading platforms stay up to date because they are run on secure systems within the service provider’s private infrastructure.

The majority of the security features that accompany the private cloud ensure maximum reliability and regulatory compliance, which can make it a more secure choice than traditional on premise infrastructure. Upgraded security features include SAS70/SSAE16 and ISO 27001 certifications, managed backup, intrusion detection, encryption capabilities, and disaster recovery (DR) replicated across multiple data centers and built into the infrastructure. Private clouds are built with security in mind using these enhanced features and reduce the chance of many types of attacks, such as phishing attacks, by allowing administrators to quickly identify and mitigate network abnormalities.

Another security benefit to using the private cloud is the ability to control user privileges. Many private cloud platforms allow administrators to monitor and review employee actions on the network, as well as block or make updates to control usage based on employee status. This helps mitigate the risks associated with data privacy, location, and segregation.

Looking to learn more about the private cloud for your hedge fund? Our whitepaper on financial cloud services is the complete guide for hedge funds.