The use of cloud services has become commonplace among private equity and hedge fund managers. For all fund managers, whether its an industry veteran or a new manager thinking on how to start a private equity firm, the process of moving data and securing existing data on the cloud is of paramount importance.
Agio, an expert IT outsourcing for hedge funds and private equity firms, has weighed in on five important steps to take to secure your firm’s digital data.
Step 1: Understand the Nature of Your Data
The nature, sensitivity, and ease of access for your data are all key considerations for how data should be stored on the cloud. For example, sensitive client information needs to be uploaded on a secure cloud provider or even an on-premise data center rather than the public cloud. Data that is often retrieved and accessed should not be locked away behind severe, multi-factor authentication, or accessing it would become a laborious task.
Step 2: Classify Your Data
It’s important to organize and classify your data in some manner, whether it’s a simple division of sensitive vs. non-sensitive information. Most mature firms classify data in a way that makes it easy to understand business requirements and compliance needs. In addition, information needs to be stored in a way that makes it easy to understand what is accessed in event of a breach so that follow-up actions are possible. That way, not every breach results in multiple state attorneys being informed.
Step 3: Label and Store Data Properly
Data classification means nothing if that data isn’t stored and managed properly over time. This means all members of your firm need to label and save files in the correct places. If an associate creates a bevy of Word documents, complete with sensitive client info, and saves it on a public drive, it can expose that sensitive information and make it hard to track information if it’s lost in a breach.
A crucial component of storing data in the cloud is a data map, which can be used to note all the data in the cloud, the data classification, and the person responsible for its management.
Step 4: Create Access Controls
Not every employee needs to see every piece of information. In fact, failing to control each user’s access can provide hackers tremendous access to the firm’s file. Agio recommends a combination of multi-factor authentication, user privileges, and other user management policies be enforced.
Agio recommends using a DDQ, or due diligence questionnaire, to audit the information that users have access to.
Step 5: Track and Secure Data
A breach is an unauthorized disclosure of data, which makes data loss prevention (DLP) tools essential to prevent breaches. Not only can many DLP tools automatically identify sensitive customer information, but they can also be tweaked to identify key forms of identification used in your business, such as labels, headers, or internal IDs. A DLP can significantly streamline the process of monitoring data.