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Guide to Hedge Fund IT Outsourcing and Third-Party Risk Management the Digital Workplace

By Olivia Munro | Thursday, September 17th, 2020

With hedge fund and private equity employees around the globe working remotely and organizations rapidly pivoting their technology strategies and processes, firms may be more susceptible to third-party risk than ever before. COVID-19 forced the hedge fund industry to shift dramatically, and firms need to ensure they're doing the proper vendor due diligence to ensure efficient and secure operations.

In a recent webinar, technology experts from Eze Castle Integration and EisnerAmper share insights to hedge fund IT outsourcing and third-party risk management in a post-pandemic, digital workplace. For an overview of the webinar, continue reading, or you can skip and view the full presentation here.

How has reliance on technology partners changed in 2020?

As firms removed to remote work for an undermined amount of time, many ended up heavily relying on third-party providers to keep business moving as smoothly as possible. This switch happened quickly, and some firms may not have done the standard due diligence that they would normally perform due to time constraints. This increased reliance on outsourced providers isn't a bad thing, though if firms didn't follow normal processes when partnering with these third-parties before, they should investigate and follow protocols now to patch any potential gaps.

Third party risk management tips for the new digital workplace

Experts provided the following tips for operating in the new digital workplace:

  • Never make any assumptions, and have standards and expectations for each outsourced service provider

  • Have a formal vendor management program in place

    • Tier vendors

    • Define onboarding and offboarding procedures 

    • Hold quarterly and annual reviews

    • Have a formal selection process

  • As always, take 4th, 5th and 6th party risk into question, too.

What should a hedge fund outsource v/s build internally moving forward?

For hedge funds who are now exploring what to build internally vs. outsourcing in the future, keep the following in mind:

  1. Start by building a strategic roadmap

  2. Consider commodotised technology

  3. List resources, services and technologies essential to your business

  4. Think carefully about enablement

What technology developments have occurred in response to COVID-19?

As a direct result of COVID-19, many technological advanced have occurred. For example, collaboration tools, like Microsoft 365, have evolved. Voice solutions have also improved, and there have been layers of added security when it comes to network connectivity services.

What are some tools and tricks hedge funds and private equity firms can use today to improve operational efficiency and IT outsourcing?

To start, take a step back and evaluate how technology can support your firm to drive revenue. From there, you can pinpoint areas that need improvement and find solutions. Firms should also leverage data from third-party work from home analytics tools, or other tools to ensure employees and processes are working efficiently. 

You can watch the full 30-minute webinar below to hear from Director of International Technology Jamie Smith, SVP of Professional Services Rich Itri from Eze Castle Integration, and Rob Mirsky, UK Managing Partner and Head of Asset Management from Eisner Amper.

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