Pandemic piles pressure onto hedge funds’ cybersecurity 

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The coronavirus pandemic has brought about a sea change in hedge funds’ cybersecurity concerns, with the remote working environment pushing firms to re-evaluate how they safeguard and secure data and privacy in the cloud amid a rise in phishing attacks. 

The cybersecurity panel session at this year’s hedgeweekLIVE Technology Summit heard how challenges and risks have evolved as the Covid-19 crisis has gone on. The initial emphasis early on business continuity plans and securing home networks has since given way to greater data centralisation and managing the attendant threats, explained George Ralph, managing director at RFA. 

He noted that building data warehouses for firms has been a substantial area of growth over the last 15 months, while the automation of certain manual processes has been another major step-change. But panelists agreed that simple monitoring of data is not enough – there must be proactive measures against potential wrongdoing. 

“Standard tools like antivirus are less relevant these days; you need behavioural analysis, you need to look at how the data is being used, and the behaviour of your users with that data, to help proactively prevent insider threats and bad actors,” Ralph noted. 

Michael Lawson, chief information officer at New York-based alternative investment manager Corbin Capital Partners, said his firm moved all of its locally-managed data centres into the cloud prior to the pandemic. “That improved our security platform in general, and helped reduce our technical support loop,” he said. 

The session heard how AI-related tools now offer filtering mechanisms to better focus on the ever-changing security concerns. And as hedge funds have leaned heavily on communication software to maintain client relationships, firms of all shapes and sized have endured additional pressures on device management, speakers said. 

Catherine Parry, founder and CEO of DeepView, a platform that helps firms effectively secure channels such as LinkedIn messaging, WhatsApp and video conferencing, outlined the US and UK regulatory stances towards social media, the heightened risks around its use during lockdown, and how compliance teams are addressing such headaches. 

Ultimately, remote working has put cybersecurity “at the very forefront” of firms’ concerns, said Nicolas Gaussel, CEO at Metori Capital, a pure-play quantitative investment manager running almost USD1 billion. He noted how investment managers were placed in an “emergency mode” at the start of the pandemic, which has led to ongoing scrutiny of their risk identification processes. “It is a permanent supervision that you have to run,” he added. 

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Hugh Leask
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