As hedge funds and investment management firms shore up security practices in an effort to comply with the SEC cybersecurity expectations and other industry and investor standards, it can become overwhelming to sort out what's required and how firms should go about achieving compliance. It can also be easy to make mistakes. We asked Eze Castle's Business Continuity and Data Privacy Manager, Lisa Smith, to tell us about some of the common information security mistakes she witnesses firms make and how to avoid them in the future. Here are some of the key questions Lisa answers:
Where are you seeing the most deficiencies in cybersecurity preparedness?
What goes into an effective Written Information Security Plan?
What common mistakes do you find firms are making when it comes to information security safeguards?
Take a look at Lisa's answers!
In it's fourth year running, our Global Hedge Fund Technology Benchmark Study reveals the top technology systems and applications used by investment management firms around the world. And while we aren't due to officially release the results until tomorrow - register for our webinar to hear them live - we thought we'd share a little sneak peek in the form of an infographic.
Take a look below and discover how your hedge fund and investment management firm peers are using technology to power their firm operations.
Categorized under: Hedge Fund Due Diligence Launching A Hedge Fund Cloud Computing Security Hedge Fund Operations Hedge Fund Regulation Infrastructure Communications Outsourcing Software Trends We're Seeing Videos And Infographics
When it comes to cybersecurity defenses, this isn’t a fantasy league. The threats are real and growing in sophistication for the hedge fund and alternative investment industry. In today’s blog, we will discuss how to prepare your firm’s defense for external attacks and internal breaches.
Cybercrime works like a defensive team that studies their opponents and plays and can make midgame adjustments. The only true way to thwart an incident is to establish a layered security program to safeguard against attacks and vulnerabilities of all kinds. Football teams share a similar composition, as there are defensive tackles and ends, cornerback and safety roles. You need to ensure your infrastructure is highly secure and cannot be penetrated by external attackers or easily manipulated by internal threats.
Last week, we co-hosted another exciting Hedge Fund Startup event with KPMG in New York and had a great turnout of fund managers looking to learn more about everything from legal and tax implications to technology must-haves and capital raising strategies.
Since technology is clearly our forte, we wanted to share some of the key takeaways from our “Achieving Institutional-Grade IT” panel, featuring speakers from Evercore Partners, Bank of America Merrill Lynch and, of course, Eze Castle Integration. Here are the highlights:
State of Emerging Manager Market
The hedge fund startup market is healthy, and investors’ appetite for emerging managers is strong
Investors are attracted to nimbler, hungrier nature of emerging managers.
Key Priorities for Startups in 2014/2015
Select the right service providers to support your business.
Understand your firm’s vulnerabilities and exposures.
The operational due diligence process is changing, therefore firms need to understand the protections they have in place to secure investor assets.
In any relationship, when things are good, they’re usually pretty good. And when things are bad, sometimes they are really bad. There may come a point when you need to evaluate whether you’re still a good fit together.
Just like with a romantic relationship, your firm’s connection to a service provider (especially an infrastructure/cloud provider you rely on daily) should be strong enough to withstand a few hiccups and healthy enough to warrant open communication at all times. In some cases, it might be clear that you’re in a good place and moving forward together, but sometimes there are sure signs it’s time to call it quits.
Here are a few of those signs:
1. Your provider’s service levels are not up to snuff.
Maybe you recently experienced a major service outage or find that you not-so-conveniently have to work around confusing and interrupting maintenance schedules during work hours. You’re constantly frustrated and don’t feel like you are receiving the level of support that was agreed to – both verbally and as part of your Service Level Agreement (SLA).
Your SLA should clearly indicate the uptime standard (e.g. 99.995% availability) as well as repercussions to any breaches in the contract (for example, service credits) and associated RPOs if disaster recovery is involved
We’ve tapped the expertise of nine experts in the hedge fund startup space to share their thoughts on a range of topics specific to emerging hedge fund managers. Below are some highlights, and you can read the entire Emerging Managers Insight Series eBook here.
Set a realistic schedule to launch and don’t rush to get the hedge fund up and running too quickly. Take the time to partner with the right service providers that will support your business from the start and as you grow.
Budget for a marketer in your first two years of operation. If you look at the largest funds in the industry, they all have substantial investor relations teams that keep current investors informed while prospecting for future investors.
Capital introduction is a much sought after service from prime brokers which can be very helpful in providing a new hedge fund exposure to potential investors. Take advantage of introductions and begin to build relationships with potential investors.
Last week our SVP of client technology, Steve Schoener, presented at a hedge fund due diligence event on the topic of protections in the cloud.
Since cloud security and ensuring a hedge fund’s data is protected is such a hot topic we thought we’d share his presentation. In a nutshell, the presentation looks at the layers of security that should be built into a cloud environment, which includes deep and detailed practices around:
Principle of Defense in Depth
Principle of Least Privilege
Audit & Logging
Secure User Authentication Protocols & Encryption
Check out the complete presentation for more details:
We all make mistakes, but when it comes to technology and hedge fund operations, mistakes aren’t an option. So let’s look at seven common cloud mistakes we see hedge fund firms making and talk about how to avoid them.
Mistake #1: Not Sizing Bandwidth to Business Needs
Determining the right amount of bandwidth comes down to the types of services being delivered and user expectations. Nothing ruins a cloud or really any computing experience like sluggish application and Internet performance.
Beyond bandwidth, firms must also consider latency. While latency issues don’t impact all applications (i.e. email is relatively insensitive) for others it is a killer. Latency has little place in trading applications or voice over IP services. When moving to the cloud, have a realistic conversation with the hedge fund cloud provider about the amount of bandwidth your firm really needs.
Mistake #2: Not Planning for Applications
Not all cloud platforms are equal especially when it comes to supporting hedge fund specific applications such as Order Management Systems or Portfolio Accounting Systems. While a hedge fund may not launch day one with one of these applications, there is a good chance they will require one in the future. To help mitigate future growing pains a hedge fund should plan for the future when evaluating cloud providers. Being shortsighted can result in future disruptions and integration pains.
If there’s one thing we’ve learned over the years when it comes to security, it’s that there’s a whole lot more to creating a secure hedge fund (or any business for that matter) than robust technology. Before identifying infrastructure components and implementing operational policies, a firm must first be clear on what its attitude is toward security. This attitude will filter through the company from the top down, and will therefore dictate how employees and the business as a whole operate on a daily basis.
To give you a clearer understanding of what we mean, we’ve created three security profiles that cover a wide spectrum in terms of security attitudes and practices.
Under the Radar: Low Security
If you’re attitude toward security is low, odds are you’re barely scraping the surface in terms of what practices and policies you should be employing to maintain proper security firm-wide. You likely rely on quick fixes to solve problems instead of looking at the bigger picture and thinking strategically about how security can both benefit and protect your business. You’ve employed minimal preparedness efforts and could be in for a difficult task if faced with a serious security incident. You probably take a “it won’t happen to me” attitude and don’t take security seriously enough – a stance that could endanger your firm in the long term.
Categorized under: Security Launching A Hedge Fund Cloud Computing Disaster Recovery Hedge Fund Due Diligence Hedge Fund Operations Hedge Fund Regulation Infrastructure Communications Outsourcing Business Continuity Planning Trends We're Seeing Videos And Infographics
Voice over IP has come a long way especially in the business world, but many investment firms still have hesitations about making the switch. In honor of our recently enhanced Eze Voice service, which runs over the Eze Private Cloud Network, we decided to tackle 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.