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How Is Your Firm Mitigating Technology Risk?

By Eze Castle Integration | Tuesday, February 18th, 2020

Investment risk plays an important role in the life of an investment firm's manager, but technology risk should not. When it comes to your firm’s technology systems and operations, you want things to run efficiently, not add more stress to your already crowded plate.
Mitigating technology risk is a critical step to ensuring your firm operates smoothly and successfully. Following are a few areas to keep in mind as you evaluate your firm’s technology risk:

Layers of Redundancy

One way to reduce your firm’s technology risk is to add layers of redundancy throughout your infrastructure. Whether you’re utilizing a cloud infrastructure or an on-premise environment, your servers, networking and telecomm lines should feature N+1 availability, a configuration in which multiple components have at least one independent backup component to ensure system functionality continues in the event of a failure.

Disaster Recovery & Business Continuity Planning

Beyond redundant systems, it’s critical your firm employs DR and BCP strategies to protect systems and the overall business from succumbing to an outage or disruption. A complete disaster recovery solution will leverage replication technology to mirror your production environment to an offsite location. If and when a disaster strikes, employees can access data and applications virtually without missing a beat. Outside of technology systems, you can mitigate risk by relying on a business continuity plan to protect employees and processes. Ensure your business continuity plan is communicated throughout the firm and all individuals have a thorough understanding of what to do and where to go if business is interrupted.


One area investment firms need to be especially aware of in today’s age is security. Cyber-attacks and other security-related incidents can pose a real threat to a business’ welfare. In order to mitigate these risks, firms need to take the necessary steps to protect their technology environments from internal and external breaches. Security best practices should be implemented at both the physical and infrastructure levels – meaning wherever your servers are located (cloud facility, colocation, Comm. Room), cages should be locked and monitored 24x7x365. To support these practices, strict and enforceable policies should be adhered to regarding access control and information security management. Read more about security best practices here.

Outsourced Technology Solutions

In order to better mitigate all of the above risks we’ve mentioned, your firm can leverage the expertise of a third-party technology provider. By placing the burden of risk on an outsourced provider, you free up your firm’s resources for other projects – whether they be IT or investment focused. Whether its project-by-project or on a part- or full-time basis, your outsourced IT provider can offer a vast array of services and solutions designed to meet your firms unique needs – and, of course, to reduce your firm's inherent risk.

Looking for more on mitigating technology risk? Read our eBook on 10 Common Cyber Gaps and How to Avoid them.

Guide to Technology Outsourcing

This article was published back in 2018 and has since been updated. 
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