Public cloud tools and free file sharing services are wholly owned and managed by third-party providers. Because infrastructure costs are spread across all users who are employing the service, each individual client is able to operate at a low cost. Public cloud tools are typically larger in scale than private enterprise clouds, which provide users with seamless, on-demand scalability.
These factors may seem to support the belief that public clouds and free file sharing services would suffice for a business’s basic infrastructure and file sharing needs. However, upon closer examination, it is clear that there are a number of areas in which these tools fall drastically short of meeting the crucial business needs of investment management firms.
Our Eze Voice (think financial services grade VoIP) is now available to firms across the United States and United Kingdom. In honor of this global availability, we want to debunk some common myths associated with VoIP for financial services forms.
Voice over IP has come a long way especially in the business world, but many financial services firms still have hesitations about making the switch. Check out these five common myths about Voice over IP.
MYTH 1: Poor Call Quality – Everyone will know I’m on VoIP
Call quality is a key concern and can be impacted by a number of items including the network, available bandwidth and even the type of phones being used. However, a well-designed business-caliber VoIP system can deliver quality of service comparable to an in-house phone system. In business settings, where calls are made over private IP connections, Quality of Service (QoS) can be monitored and guaranteed because the entire IP connection is controlled by the party making the call.
When evaluating VoIP services, it is important to inquire about the underlying network and how voice traffic is prioritized and routed. You want a provider that has full control over network traffic and can ensure high quality of service. For added confidence, ask to speak with existing VoIP customers (over the phone!) to hear about their experiences first-hand.
MYTH 2: VoIP is Unreliable – I’ll Experience Downtime
A natural extension of the call quality concern is the reliability concern. While consumer-grade VoIP services work over the Internet to deliver low cost services, Business-grade VoIP services often use the Internet as a backup and have private IP point-to-point lines for primary connections. If Internet is the primary transit, be sure you are working with a VoIP provider who manages the entire network and has control over traffic prioritization. In most cases you want to ensure voice traffic takes precedent over data or travels on a different network.
People take vacations. Companies don’t.
Hedge funds, just like most financial firms, need staff to run their technology, handle special projects, build (and manage) complex applications and of course execute core business activities. But in many cases it is not realistic or cost-effective to keep everything in-house. Enter outsourced staffing.
Outsourced staffing options for hedge funds abound. So let’s take a look at five common outsourcing practices. If you want to learn about other areas to outsource your hedge fund's technology, read our Manager's Guide to Outsourcing here.
The security threat landscape continues to evolve, and security through obscurity is no longer (and probably never was) an ideal approach to protecting the sensitive data of the hedge fund industry. A 2015 Cyber Security Intelligence Index study by IBM found that over 62 percent of cyber incidents targeted three industries -- Finance, Insurance, and Information and Communications -- highlighting the serious risk cyber intrusions present to financial firms.
The report found that in 55 percent of all cyber attacks in 2014 were carried out by either malicious insiders or inadvertent actors and that unauthorized access triggered nearly twice as many incidents in 2014 compared with 2013. According to the report, “certain types of unauthorized access incidents rocketed to the top, accounting for 37 percent of the total—nearly doubling from 19 percent in 2013. ShellShock and Heartbleed were the game changers here.”
Another example cited was that malicious code and sustained probes together accounted for 40 percent of all the incidents observed. According to IBM, with an ever expanding array of malware from which attackers may choose— including viruses, worms, Trojans, bots, backdoors, spyware and adware—it seems fairly certain that malicious code incidents will continue to wreak havoc for the foreseeable future.”
These examples demonstrate that the risks facing large organizations and smaller firms (read: hedge funds) are just as real. To that end, we regularly team with eSentire to speak with hedge fund CTOs about the security landscape and their managed security technology. Additionally, Eze Castle Integration utilizes eSentire intrusion detection technology within our Eze Private Cloud and to power our Eze Active Threat Protection services.
Feedback on eSentire’s offering and approach is always received positively and the spark for this tech spotlight article.
This article first appeared in HFMWeek's Special Report: How to Start a Hedge Fund in the EU 2015.
HFMWeek catches up with Eze Castle Integration’s executive director, Dean Hill, to discuss the importance of selecting the right business service providers and the key technology factors new funds must consider when starting out in the EU.
HFMWeek (HFM): Are you seeing a healthy market for new hedge fund launches in the EU?
Dean Hill (DH): Yes. I think going into 2016 we will see an increase in terms of the amount of new hedge fund launches across the UK and European markets. Not only are these launches coming more frequently, but their size, structure and launch AuM is greater than anything we have seen in the last two-to-three years. It is certainly on the uptake.
As cloud services continue to become increasingly popular among hedge funds and investment firms, there still seems to be an area of confusion that surrounds this technology. We've talked through Why Cloud Computing is Right for your Hedge Fund and Understanding Public, Private, and Hybrid Clouds. Now, let's look at three key elements to consider within the cloud: Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS).
In a SaaS model, firms are offered a complete range of applications via the Internet, all of which are managed by the hedge fund cloud provider. This means firms can forego upfront investments in servers and software licenses and pay a predictable per-user, per-month fee.
PaaS is the delivery of a computing platform over the Internet. The PaaS model enables hedge funds to create Web applications quickly without incurring the cost and complexity of buying and managing the underlying software and hardware. Firms have control over the deployed applications and environment-related settings. PaaS is great for firms creating or managing their own applications or looking for testing and development environments.
Among the many technology decisions your firm will face during the launch phase is selecting the appropriate telecommunications needs to power daily operations. High-speed Internet and voice connectivity are necessary to access market data feeds, communicate with investors and facilitate trade orders and other investment decisions. To help you make an informed decision about your voice and Internet needs, we’ve provided a few suggestions below.
The Internet, of course, is an essential vehicle for collecting and distributing market data, as well as communicating with your clients, investors and partners via email. You’ll likely find four Internet access choices, depending on availability in your area. There are benefits and drawbacks to each, as described below.
Following is an excerpt from our 21-page Guide to Hedge Fund Technology Outsourcing. Skip ahead and download the full paper HERE.
As technology continues to grow as an important competitive differentiator for hedge funds and investment firms, funds are continuing to leverage technology outsourcing as part of their operational strategies.
A variety of circumstances in the industry have driven this move to outsourcing including:
The changing economic environment as a result of the financial crisis;
Increased investor focus on transparency and operational risk; and
Rising overheard costs relative to owning, maintaining and monitoring one’s own technology infrastructure.
Hedge funds and investment firms can leverage outsourcing in a variety of ways – everything from help desks to document management, virtual Chief Technology Officers and other staff to disaster recovery plans, FIX connectivity and more. But regardless of the specific elements being outsourced, funds should look for a few baseline requirements as part of an outsourcing solution:
A secure physical infrastructure;
Efficient and reliable communications;
Data protection; and
Vendor strength and stability.
On September 15, 2015, the SEC’s Office of Compliance Inspections and Examinations (OCIE) issued a Risk Alert providing additional guidance on key focus areas for round two of its cybersecurity examinations. Specifically OCIE stated exams will “involve more testing to assess implementation of firm procedures and controls.” The Commission intends to focus on the following areas as a means to collect information on cybersecurity-related controls and assess the controls in place at firms:
Governance and Risk Assessment: According to the Alert, OCIE may evaluate the governance and risk assessment process for areas including, but not limited to, access control, employee training, third-party/vendor management and IT systems management. Examiners also expect to see that assessments and associated policies are specific to a firm’s business.
Access Rights and Controls: OCIE warns that the lack of basic access controls and user management policies can result in unauthorized access to systems and information. Examiners may request details on how a firm manages user rights and what supporting technologies are in place.
Eze Video Debut!
Ever wonder about the layers of security encasing our Eze Managed Suite solution? We thought you had. That's why we created this video, which outlines not only the security protections but also the extensive services available to investment firms and hedge funds that move to our premier cloud solution.
Watch, learn and then contact us for more details.