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 to your data are all key considerations for how data should be stored on the cloud. This is why, if you hire an IT support, they will give valuable service to help keep your IT systems at pace and in sync with your business. For example, sensitive client information needs to be uploaded to 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.
