As private equity firms adopt new technologies to support operations, the number of threats they expose themselves to increases exponentially. It can be a daunting task to stay on top of the new and evolving risks at hand, and meticulous attention needs to be employed to mitigate these ongoing threats.
Attacks vary in target, size and motive. All pose serious risks to your firm’s crucial data, wellbeing and reputation. Once bad actors gain access to your network or data, there are many nefarious activities that can take place. Some incidents are obvious, resulting in the need to change passwords; some can be more obscure, and some may not manifest themselves until un-repairable damage is done.
Whether starting from scratch or reevaluating your firm’s cybersecurity procedures you need to have a plan. Not only should you be able to identify your current security standing, but also what areas will require you to make improvements and what gaps need to be filled.
To gain a comprehensive understanding of your security position, private equity firms should conduct a thorough risk assessment on a regular basis. Risk assessments should be conducted to provide your firm with a roadmap that identifies risks and provides guidance on future security initiatives.
A popular framework is from the National Institute of Standards in Technology (NIST) which focuses on building layers of security across an organization. Their primary layers – Identify, Protect, Detect, Respond and Recover – assist firms in mapping specific strategies and safeguards to ensure a comprehensive security program is designed to mitigate risk.
A few key reminders on due diligence and risk management:
Understand who your outsourced providers are, what functions they provide, what data/systems they have access to and where your clients’ data resides.
Conduct annual Vendor Due Diligence reviews for any third parties you are evaluating or those you are already engaged with.
Stay abreast of current regulations and security threats that may impact how you conduct business operations or need to interact with constituents.
Have a clear understanding of Service Level Agreements (SLAs), contractual obligations and any third party operational practices that may impact your firm’s security standing in the short and long-term.