Why Cybersecurity DDQ is Important for Alternative Investment Firms?
by Mashum Mollah Investing Published on: 27 September 2019 Last Updated on: 07 November 2024
When it comes to IT operations, many alternative investment firms tend to adopt a mindset of “if nothing is broken, why fix it.” While this may have proven to be acceptable in the past, the ever-growing potency of technology is making this mindset obsolete and risky. As the technological capabilities available to people and firms continue to increase, so too do digital security vulnerabilities. If a hedge fund or private equity firm fails to address their growing cybersecurity needs, then it’s inevitable that they will be the target of a hack or data breach.
Why Maintaining Proper Cybersecurity is Essential for Firms?
Unfortunately, far too many financial firms have been lax in their IT and cybersecurity procedures. It’s so dire that on April 16th, 2019 the SEC’s Office of Compliance Inspections and Examinations (OCIE) issued a formal Risk Alert on common deficiencies on how firms handle sensitive data. These defects range from mishandling information to gaping system vulnerabilities.
For the alternative investment firms who haven’t been keeping their cybersecurity and IT infrastructure up to date, suddenly plugging the many gaps may seem like a daunting process. Fortunately, the onus for completing the project does not necessarily have to lie with the financial firm – a third party managed IT and cybersecurity expert, such as Agio, can help.
Agio- The Cybersecurity Expert from the Future
Agio specializes in addressing the unique technological and digital security needs of all manner of financial firms, ranging from private equity to highly technical hedge funds. For many firms looking to plug their technological gaps, Agio can help create a custom due diligence questionnaire, or DDQ. A DDQ is a questionnaire that can give the administrator in-depth information on a firm’s cybersecurity, compliance, and even vendor vulnerabilities.
Why is vendor security so important to a firm’s overall data safety? The second most common avenue for hackers to gain access to a company is through it’s vendors.
How does DDQ help in security your Data?
Agio’s DDQ creation and execution process can help your firm secure itself, especially since Agio’s deep experience with many alternative investment firms gives perspective on vulnerabilities or attack vectors that an investment firm may miss. Agio also recognizes that many potential investors are becoming ever-more concerned about the digital security of firms too, which is why many investors prefer to review DDQs. Not only can Agio help craft a DDQ that will satisfy investors, but they will also be present to help answer technical questions that may arise from the process.
At the end of the day, robust cybersecurity practices and procedures are becoming more and more pertinent in the eyes of investors and regulators. Even if an alternative investment firm has not experienced a breach in the past, there is no indication that they are immune to future attacks.Even more importantly, if a firm’s digital defenses and procedures aren’t regularly tested and evaluated, then it can lead to devastating breaches in the future.
Corporations have lost billions of dollars in the last few years on account of hacking and extortion. Crucial data that is personal and informative in nature has been stolen, leading to clampdowns by government institutions, loss of credibility in the market and low investor confidence. Investing in cyber security might be the soundest decision that a firm can take.
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