Most private equity firms take cybersecurity very seriously. However, the employees of most firms do not fully understand how cyber risks can affect them on a personal level. This misunderstanding can end up affecting employees on a professional level. The misunderstanding can stem from a firm thinking they will not be a likely target for cybercriminals because of satisfying SEC regulations. Agio is an American IT firm based in New York City that specializes in offering cybersecurity preventative and crisis measures for private equity firms across the world. The following are Agio’s tips for avoiding preventable attacks online.
The unfortunate reality is that most cyber-hackers use a “follow the money” approach. According to Agio, private equity firms are no exception for a hacker to target, even with the use of high-level cybersecurity tools. To be fully protected, firms need to go beyond SEC compliance and spend time focusing on being proactive with regards to protecting their firm’s assets. One big challenge that many companies face, especially private equity firms, is how to effectively identify, prioritize and then implement different risk mitigation strategies.
Below are some of Agio’s top identified risks which make private equity firms a target for hacking. Firms that take proactive steps to identify and fix these threats will be taking a holistic approach to risk management for their business.
Phishing is a version of social engineering in which hackers pretend to be someone else and attempt to get information from individuals using methods of deception. Most often, these phishing attempts are completed using voice phishing calls and emails. Hackers will use these attempts to try and steal wire transfers, harvest employee credentials and exploit secrets of the firm.
Malware can be easily spread through phishing attacks, insider threats, social engineering schemes and breached internal networks by hackers. The main idea behind these types of attacks is focusing on disrupting the operations of a private equity firm in order to gain access to the firm’s valuable and private data. These attacks accomplish the goal by doing things like locking employees out of their computers, canceling planned exchanges and deleting necessary data.
- Insider Threats
Many private equity firms fail to recognize those who are a threat working on the inside. While it is essential for a firm to trust their employees, it is also necessary to be on the safe side when it comes to protecting their valuable assets. Signs that you have someone on the inside who is a potential hacking threat includes unnecessary access control changes, large data transfers sent out to external cloud storage sources and gaps in asset management distribution.
- Human Error
Making mistakes is part of human nature. Private equity firm employees are no exception. They can mistakenly send private, intellectual property to the wrong recipients, lose their smartphones or laptops while traveling or accidentally spill insider information to those they trust. Agio offers cybersecurity risk assessment tests. To remedy this, hold regular meetings with associates to discuss ways to protect the firm’s information from falling into the wrong hands. Agio will test team responses to phishing, pretexting, and USB drive baiting. Additionally Agio will test the physical security in a hedge fund’s office space.
Lack Of Visibility
The insufficient monitoring and logging of firm systems can allow vulnerability of visibility. Without close focus to hedge fund cybersecurity, Agio asserts that firms are seriously at risk for attacks especially without adequate logs for applications, networks, systems and any physical security devices installed.