Hedge Fund Technology: Trends of 2015
The New Year is right around the corner, and is sure to bring many new challenges for hedge funds. In 2015, hedge funds were faced with a variety of issues around cybersecurity and data protection, and leaders were tasked with ensuring their office operations were both secure and efficient. Today on the blog, we are recapping three important hedge fund technology trends from this past year.
In 2015, hedge funds began to move away from more traditional forms of data security, such as encryption. Because encryption works by encoding data so that only particular parties have access, higher levels of security were equated with less flexibility and efficiency for employees. In today’s mobile world, employees must be able to transport files outside of the corporate network in order to travel and work from home efficiently. Newer forms of data security now focus on controlling data at the file level, independent of location- allowing employees to work flexibility while still providing appropriate levels of security.
Many hedge funds evaluating the cloud have concerns around data privacy issues, such as location, segregation and privileged access control. But despite these risks, in many cases the cloud can actually improve a firm’s security posture when managed appropriately by a trusted technology partner and when selecting a private cloud model. The private cloud allows hedge funds to mitigate a variety of security threats by automating security patching, ensuring all applications and trading platforms stay up to date on secure systems, and by ensuring maximum reliability and regulatory compliance through a variety of features. The private cloud also allows administrators the ability review and control employee actions on the network, lowering the risks associated with data privacy, locations and segregation.
In 2015, data protection became an important area of focus for hedge funds when the SEC placed guidelines on data usage and control access issues in order to minimize the risks associated with the growing amounts of data.
The impact of a breach incident on one employee, whether on the home network or in the office, could have far reaching negative consequences for an entire fund. While impossible to completely eliminate the risk of human error, there are some important steps hedge funds can take to ensure sensitive data stays protected:
-Securing the network
-Choosing strong passwords and updating them frequently
-Reducing access to personal information
-Safeguarding social media activity
-Implementing data governance and auditing policies to understand where sensitive data is located, and how it is used