Your firm handles sensitive financial data and deals with high-stakes transactions daily. At the same time, the sophistication of cyber threats continues to increase as AI and emerging tech is utilized more and more by threat actors.
Now, even a single successful attack can have a devastating impact on your firm’s reputation and bottom line.
The Rising Threat Landscape
Cybercriminals are becoming increasingly adept at exploiting vulnerabilities. According to the latest FBI Internet Crime Report, U.S. businesses faced nearly 21,489 complaints about Business Email Compromise (BEC) scams, resulting in $2.9 billion in losses in 2023 alone.
Additionally, ransomware incidents saw an 18% increase from 2022, with losses jumping 74% to $59.6 million. For alternative investment firms, the stakes are particularly high due to the large volumes of sensitive data and stringent regulatory requirements they are forced to navigate on a daily basis.
Why Alternative Investment Firms Need an MSP for Cybersecurity
Alternative investment firms, like PEs and VCs, face their own set of challenges, from ensuring the protection of sensitive financial information to maintaining compliance with regulatory standards, like SEC audits, and so much more. Here’s why many firms choose to partner with an MSP instead of taking their security in-house.
- Expertise and Resources: Some MSPs offer specialized knowledge and tools that your firm may not possess in-house. This includes advanced threat detection, incident response, and continuous monitoring.
- Cost-Effective Solutions: Engaging an MSP can be more cost-effective than building an in-house cybersecurity team, providing access to top-tier security technologies and expertise without the overhead.
- Regulatory Compliance: MSPs stay updated on the latest regulatory requirements and can help your firm maintain compliance, avoiding costly fines and reputational damage.
Key Cybersecurity Practices for Alternative Investment Firms
Develop a Robust Cybersecurity Culture
- IT Steering Committee: An IT Steering Committee is crucial for aligning your IT and business objectives, providing governance, and ensuring cybersecurity initiatives are prioritized. Key roles include the CEO/COO, CIO/CTO, CISO, key business leaders, CFO, and HR leader. Regular meetings should be held to review and adjust IT strategies and priorities.
- Security Awareness User Training: Employees are often the weakest link in your cybersecurity armor. Regular training on topics such as phishing, social engineering, password security, and malware can transform them into your first line of defense. Interactive elements like simulated phishing exercises and tabletop drills help reinforce this training.
Implement Advanced Security Technologies
- Mandatory Multi-Factor Authentication (MFA): MFA adds an extra layer of security by requiring multiple forms of identity verification. It is essential for protecting against unauthorized access, especially in scenarios where employees use unmanaged devices or work over unsecured networks.
- Email Security: Email remains a primary vector for cyber attacks. Implementing robust email security measures, including sender authentication, message encryption, and advanced virus/malware scanning, is critical. Regularly updating and monitoring these measures helps prevent BEC, phishing, and spam threats.
- Endpoint Detection and Response (EDR): Unlike traditional antivirus solutions, EDR provides real-time monitoring and response capabilities, identifying and mitigating threats before they cause significant damage. EDR integrates behavioral analysis, automated response, and threat intelligence, making it highly effective against advanced threats.
Establish Comprehensive Security Processes
- Backup and Recovery: Backup and recovery processes ensure that your critical data and systems remain available and intact in the event of a cyber attack or system failure. Implementing strategies such as full, incremental, differential, and continuous backups is essential for minimizing downtime and data loss.
- Incident Response Plan: A well-documented incident response plan outlines procedures to follow before, during, and after a cybersecurity incident. This includes preparation, identification, containment, eradication, recovery, and lessons learned. Regularly reviewing and updating this plan ensures it remains effective and aligned with current threats and business needs.
- Third-Party Risk Management: Managing risks associated with third-party vendors is crucial. This involves conducting due diligence assessments, ongoing monitoring, and ensuring vendors meet your security requirements. Effective third-party risk management helps safeguard your data and maintain business continuity.
How Coretelligent Can Help
At Coretelligent, we specialize in addressing the unique cybersecurity challenges faced by alternative investment firms. Here’s how our solutions can protect your business:
vCISO Services: Our Virtual Chief Information Security Officer (vCISO) provides strategic leadership, ensuring your cybersecurity strategy aligns with business objectives and regulatory requirements. This includes regular risk assessments, vulnerability analyses, and incident response planning.
Advanced Cybersecurity Solutions:
- Multi-Factor Authentication (MFA): Adds an extra layer of security against unauthorized access.
- Endpoint Detection and Response (EDR): Real-time monitoring and automated threat neutralization.
- Email Security: Prevents phishing, BEC scams, and malware attacks.
- Threat Intelligence and Monitoring: Proactively identifies and responds to emerging threats.
Compliance Solutions: We help you navigate complex regulations with compliance audits, policy development, and employee training programs.
Robust Backup and Disaster Recovery: Our comprehensive backup strategies and disaster recovery plans ensure data integrity and quick restoration of operations. This includes regular testing and data encryption.
Third-Party Risk Management: We evaluate and monitor your third-party vendors’ security practices, ensuring robust contractual security requirements and coordinating incident responses.
Conclusion
A multi-layered cybersecurity approach is essential for alternative investment firms looking to secure both their company and their portfolios. Partnering with an MSP like Coretelligent provides the expertise, resources, and technologies necessary to protect your sensitive data and maintain compliance.
Is your cybersecurity posture up to the task? Check out our free Cybersecurity Checklist to see if your firm is checking all the boxes.