Hedge Fund Tips: Cloud Technology
May
31

Hedge Fund Tips: Cloud Technology

Hedge Fund Tips: Cloud Technology

The cloud offers a variety of benefits that traditional on premise infrastructure systems do not. These benefits can include reduced capital expenditures, increased flexibility and scalability to meet changing business needs, and security features. For many hedge funds, the shift from up-front capital expenditures associated with hardware and software costs to the more controllable operational expenditures of monthly and annual cloud contracts provides a greater level of predictability from a financial perspective. However, there are some considerations to keep in mind when moving to the cloud. Today, we are sharing our top four tips for moving to the cloud.

Understand the difference between public and private clouds and which type your cloud provider offers.

Public clouds are provided through an outsourced provider and enable firms to pay a low monthly fee to access a shared hosting environment. Public clouds offer services at a lower rate, but also offer a lower level of customization. As a result, users have less control over their data, and can feel that security is compromised. Public clouds also offer far less insight into where and how data is segregated and stored. In comparison, private clouds offer a higher level of customization and security because they enable firms to access their own private virtual data center.

Know the security risks.

The best way to avoid cloud security threats is to be aware of them and to prepare for them. Some of the most common threats include data privacy issues, such as data location and segregation, and privileged access control. By having your cloud provider manage all maintenance of monitoring of the technology infrastructure, you can reduce the risks and ensure your firm is compliant with all industry regulations. Private cloud models also provide a higher level of transparency by allowing administrators to control user privileges and review employee actions on the network. These additional functionalities help mitigate the risks associated with data privacy, location, and segregation.

Ask the right questions.

When considering the cloud, you should focus on four key areas to understand the level of security.

  • Which features are built into the cloud provider’s offering?
  • How is data segregated from other users on the cloud?
  • Where does the cloud provider’s infrastructure reside and what type of hardware is used?
  • Who has access to the cloud provider’s infrastructure and how are these individuals screened?

Know what you’re looking for.

Understanding which services are bundled into the provider’s cloud will clarify the level of security that will be used to protect private data. Features that are necessary for maintaining a secure cloud environment include:

  • Web filtering
  • Intrusion detection and prevention
  • Data encryption
  • Multifactor authentication
  • Disaster recovery and managed backup services