Investment managers are critically concerned with the state of cybersecurity in order to successfully manager a hedge fund. Managers are tasked with protecting the sensitive information high profile clients have entrusted with them. From social security numbers to clients’ net worth, investment managers must safeguard data that is appealing to hackers. Hackers are also on the lookout for proprietary trading algorithms and investment strategies that hedge funds rely heavily on for continued success.
Regulators are honed in on these threats, requiring hedge fund managers to put in place appropriate measures to prevent investor information from being leaked. With ease, hackers are capable of fraudulently move money through electronic wire transfers from hedge funds that do not put in place preventative plans. Often times, these illegal transfers happen seamlessly without detection.
Hedge fund managers are keenly aware of these threats and appreciate the oversight from regulatory bodies like the SEC who additionally help with preventative measures to avoid these attacks. Agio, a hedge fund cybersecurity firm based in New York, is concerned about fulfilling those compliance needs in addition to closing up the loopholes and creating a fool-proof security system that protects investment managers’ reputations.
Agio recommends the following tips to staying on top of regulatory concerns and easy practices to employment in your firm’s cybersecurity practices:
1. Create a dynamic framework.
Financial institutions need to be in compliance with regulation. Firms have a check-list of compliance needs that all IT frameworks need to complete. From critical cybersecurity processes to incident response processes, firms need to make the core cybersecurity framework a priority. Offering a two-year compliance program that keeps your firm up to-date with the SEC OCIE Risk Alert, Agio is committed to satisfying compliance needs for their clients. From low-level blocking to complete overhaul of infrastructure management, Agio offers a hybrid IT and cybersecurity business model, created for clients of all sizes within the financial sector.
2. Implement Incident Response Management.
Financial firms expect outside cybersecurity to focus entirely on prevention. Unfortunately, there is no impervious preventative system to completely avoid hacking attempts. The industry has shifted from preventative systems to incident detection and response. Agio’s 12-month program for response management incorporates tabletop exercises, on-boarding both operations specialists and executives on cybersecurity processes for possible response tactics. Monthly readiness reviews ensure that Agio response immediately to breaches to test the login access to all systems. Preventative measures need to include both cybersecurity monitoring as well as comprehensive response tactics.
3. Join an Anonymous Network of Peers and Regulators.
In a highly competitive industry like wall street, investment managers often feel hesitant to share information when cyberattacks happen. Group reporting is highly important to secure data in the future and perfect processes. Hackers often target multiple firms at a time, and with the culture of privacy and competition firms do not collaborate when it comes to cybersecurity. Joining a network of firms and law enforcement can make reporting safe and mutually beneficial across competitive industry sectors.
Being proactive can help hedge funds fight sophisticated attacks and avoid loss of funds. Hedge fund managers uniquely rely on their reputations in safety and privacy to retain clients and successfully manage millions of dollars in a competitive market. From strategically timed phishing schemes and other group engineering scams, hackers are aware of the common IT loop holes they can penetrate. With hackers becoming increasingly organized and smart, cybersecurity is not something firms can cut corners on. When starting a hedge fund or tightening up your existing processes, consider Agio for cybersecurity consulting to focus on both prevention and response when it comes to the critical hacks most firms encounter.
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