It’s that time of year again: time to take a look ahead and make predictions for the top technology trends of 2013. I don’t think any of these trends will come as a surprise to you, but let’s take a closer look.
I know - we had this topic on last year’s list, too. But it’s so important, it deserves another nod. Smartphones and tablets have invaded the enterprise world like never before, and we’re seeing companies work more diligently to manage the use of these devices. Strategies such as Bring Your Own Device (BYOD) give firms the ability to allow employees to use personal devices for work purposes. While this provides employees with flexibility in terms of which devices they can use (and eliminates the need to carry more than one), it also highlights the importance of enhancing security measures to protect sensitive company information from getting into the wrong hands. Speaking of security…
Last month our friends at eSentire published a Cloud Security Checklist to provide hedge funds and alternative investment firms a guide when evaluating a cloud provider such as Eze Castle Integration. The Checklist asked the question, “How can you know if your Cloud Service Provider has your best risk management interests in mind?”
Since here at Eze Castle Integration we are big proponents of secure cloud computing, we thought we’d be the first cloud service provider (that we know of!) to complete eSentire’s checklist.
1.0 Physical Security: Does the cloud provider have a rigorous physical access protocol?
Yes, yes and yes. Eze Castle has detailed Access Control and Premise Access policies that extend from physical to virtual environments. Following are some of the key physical access control protocols we have in place:
24x7x365 manned lobby with visual verification of identity
Two-phase authentication of visitors (card and biometric)
Secured access at all entry points, including doors and elevator banks
Monitored security cameras as well as door, motion and camera sensors
Visitor logs closely monitored and escorts required at all times
Key-locked cages and cabinets at all data center facilities
Stricter regulations and calls from investors for greater transparency are leading hedge fund managers to up their game and enhance their technology infrastructures to become more operationally efficient.
The growing regulatory environment -- Dodd-Frank and the Alternative Investment Fund Managers Directive Level 2 (AIFMD) -- is pushing more and more hedge funds to consider adopting cloud computing as the operational burdens around reporting and transparency continue to grow. To refresh, in April 2009, the European Commission proposed a Directive on Alternative Investment Fund Managers (AIFMs) with the objective of creating a comprehensive and effective regulatory and supervisory framework for AIFMs at the European level. The proposed Directive was aimed at providing harmonised regulatory standards for all AIFMs within scope. ESMA was requested by the Commission to provide technical advice on the implementing measures of the AIFMD (Level 2).
Regulators and investors have played a significant role in the way the alternative investment industry behaves, in return influencing the evolution of technology. Regulatory change and due diligence are the largest drivers of change in the hedge fund space. Even if the changes proposed in your organisation are not regulatory driven in nature, hedge funds need to ensure that internal operations or outsourcing projects are organised is such a way that their output will easily satisfy both existing and future legislative requirements.
Hurricane Sandy created a path of devastation, disrupted countless lives and businesses, and taught us many lessons. Over the last week, here at Eze Castle Integration we have reflected on what we learned now that the lives of our employees and clients are slowly getting back to “normal.”
Communicate Openly & Often.
With Hurricane Sandy we had the “luxury” of knowing the storm was approaching, however, that isn’t always the case. Companies must have a communication plan that can be quickly initiated should an unforeseen disaster occur. We encourage clients to look into Automated Messaging Systems that allow notifications to be sent to all employees or clients simultaneously across multiple devices (i.e. home phone, work phone, cell phone, email).
Last week, we revealed the results of our 2012 Hedge Fund Operations & Technology Benchmark Study, which surveyed over 300 buy-side firms about their front, middle and back office technology and vendor preferences. This year’s findings underscore the need for investment firms to employ robust systems to support trading operations and meeting increasing regulatory and investor demands.
Below is a summary, but you can download the full report here.
Within the financial services industry, Eze Castle surveyed 320 firms including hedge funds (61%), investment managers or investment banks (12%), private equity firms (7%), fund of hedge funds (4%), broker/dealers (2%), and venture capital firms (1%). Additional firms included in an ‘Other’ category include family office, legal, real estate, endowment, quant, biotech and insurance brokerage.
Firms surveyed fell into three asset classes: 30 percent reported their AUM as $100 million and under; 32 percent fell between $101 and $500 million; and 38 percent reported over $500 million in assets under management.