What Not to Do When It Comes to Your IT
We spend a lot of time here on our blog making suggestions about what investment management firms should do when it comes to their technology. But today, we’re not going to tell you what you should do. In fact, these are things we definitely DON’T want you to do!
Plan your infrastructure only for the short-term.
A crucial mistake often made by firms is not planning for the future. Even at launch, you should be thinking about what your firm will look like and what technology you will require down the road. Planning out two to three years in advance is recommended in order to reap the most benefits when it comes to your infrastructure. Plus, if you don’t plan ahead, you may wind up incurring more costs if technology decisions need to be made unexpectedly.
Ignore the importance of a business continuity plan.
It has become commonplace for hedge funds to employ disaster recovery strategies to protect mission-critical data and applications (due to a number of reasons including investor expectations, new regulations and the effect of unexpected natural disasters, e.g. the recent NYC power outage). But firms often overlook the equally important business continuity plan, which provides guidelines for what employees need to do in the event of a disaster. Yes, focusing on your infrastructure is essential to keeping your business afloat, but that business also cannot survive without its employees. Don’t forget to test that BCP plan once you’ve developed it – a good plan will only work if people know how to follow it.
Skimp on security.
This one is a no-brainer, right? There are times when firms think it’s okay to cut back on security, or they easily dismiss the idea that a firm could ever become the victim of a cyber-attack. Hackers have become more advanced over the past few years, and financial services firms are at the top of their list for targets. It’s worth investing in layers of security to ensure your firm does not become a victim, whether it’s at the hands of a professional hacker or a simple computer virus.
Fail to comply with industry regulations.
Regardless of whose jurisdiction your firm falls under, it’s essential you take the appropriate steps to ensure you’re meeting all necessary regulatory directives. Whether its system safeguards enacted through the Dodd-Frank Act or increased transparency requirements as a result of AIFMD, you can bet there’s some type of legislative requirement your firm is responsible for meeting. Can regulatory bodies like the SEC keep tabs on all hedge fund firms? Maybe not. But if the day comes when you receive an audit notice, you don’t want to be the firm who’s noncompliant.
Be opposed to change.
Just like the investment industry, technology is constantly evolving. Years ago, firms were building out large Comm. Rooms to store massive servers and other equipment. That practice has faded today as firms rely on the cloud to meet their technology needs without unnecessary hardware purchases. Remember that just because you’ve always done something one way, it doesn’t mean it’s the only way. Learn to adapt with the changing industry and be open to trying new things. Who would have guessed just a few short years ago that we’d all be plugging into the cloud to do our day-to-day tasks?