How hedge funds solve cybersecurity problems with software

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In the technical world we live in today, cybercrime tops the list of the biggest threats facing the investment industry despite the protections against them.


Institutions offering financial services are 300 times more exposed to the threat of cybercriminals. According to the latest KPMG Business Instincts survey, many C suites are still at risk of some form of cyber attack due to low technology investment. If businesses continue to overlook pressing and growing concerns about cybersecurity, they risk losing everything.

These financial institutions have a lot at stake, a reputation, customers and huge profits. As a result, the need for cybersecurity has become all the more imperative. Today, one in three executives agree that investing in cyber skills is the need of the moment. When newspapers are inundated with shocking information about cyber attacks, vulnerabilities and unprecedented incidents, now is the time to act.

Understanding cybersecurity

Living in this modern business world, cybersecurity is about having the ability to assess the risks involved in doing business during its lifecycle. With the digitization of our economy, crimes have also followed the same path. Attackers are now using sophisticated methods to get closer to their old goals, theft, subversion, sabotage etc.

Cybersecurity for hedge funds

For hedge fund managers, cybersecurity is a matter of serious concern as issues such as spear-phishing and phishing are on the rise. These CFOs have to take care of both investor money and other company employees.

The role of managers nowadays is not limited to the simple curation of investment strategies. Instead, they must also refine their protection strategies to protect sensitive business information. The digital assets of hedge funds, including clients’ personal and financial information, trading patterns and strategies, portfolio positions and other confidential information, must be protected from cyber attacks.

The cybersecurity challenges associated with hedge funds

Hedge funds are mainly attacked for pocketing financial gains. However, they can also be the target of commercial espionage. There are also dissatisfied employees who are looking for ways to attack. Some of the most common types of cybersecurity challenges are:

1. Business email compromise

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Also known as Business Email Compromise (BEC), it is the most common threat leading to data leaks. This is a scam in which attackers spoof the company’s website or email accounts to present themselves as a legitimate business.

Cybercriminals do this easily by doing extensive research into the corporate hierarchy, payment methods, etc. Visitors to these foolproof websites or recipients of fake emails feel persuaded to share confidential information like social security numbers, login credentials, passwords, etc. Even fake emails can also lead to malicious acts through which attackers can gain access to networks and steal data.

This data is also misused for identity theft or money transfers. The financial world is more at risk of facing the repercussions of phishing attempts because they preserve sensitive information.

In the event of an incident, if the data is leaked, the loss can reach millions of dollars.

Tips for protecting yourself against the BEC:

  • Never fall for suspicious emails. Instead, users can play smart and contact said person by phone or can meet them in person. All emails asking for an emergency or asking for sensitive information, documents or money are usually a scam.
  • Always make sure to enable double checking when transferring money.
  • Use due diligence while understanding email communications. Always make sure that the reply email address is the same as the signing email address.
  • Make sure your employees don’t use social media platforms to reveal sensitive information that could be attacked for phishing.
  • The MetaTrader 5 hedge fund platform can be customized to suit your business needs as the platform supports multiple sets of configuration and settings. All configurations and settings are easy to use with a variety of business automation tools to reduce costs and maximize operational opportunities. With its maximum mobility, it allows employees to manage and access assets even during times when they are stranded. In addition, investors can see the performance and request an investment at any time.
  • Another advantage MetaTrader 5 allows you to follow in the footsteps of a successful trader by subscribing to their stocks. You can choose from hundreds of free and paid signals available with the levels of risk and profitability you want. It relieves you from the pain of manual trading on your own. Instead, the platform does the trading for you.
  • Learn how to identify scam emails or websites from normal sites. Some obvious emails stating that you’ve won the lottery are most likely scams.

Not all of these methods are 100% safe and secure. Therefore, to ensure security, it is essential to install protection software. All employees must have anti-phishing detection installed on their browsers and the security system must be up to date.

2. Phishing

Another form of cyber attack is phishing which takes various forms. Spear phishing, for example, is another small part of phishing where hackers use a technique to deceive a victim’s personal information such as Personally Identifiable Information (PII), passwords, card details. credit by pretending to be an internal entity. According to KnowBe4 reports, around 91% of successful data breaches are due to a spear-phishing attack. It’s different from CEO Fraud in that emails can make it look like a corporate newsletter, an IT person, a national bank, etc.

Tips to protect yourself from phishing:

  • Keep a close eye on the latest phishing techniques.
  • Never open or click on links, download files or open attachments from suspicious sources.
  • Update IT if you feel an email is bogus or forged.
  • Never use email communications to share personal or financial information.
  • If you encounter any pop-ups on the screens, avoid giving out any personal information.
  • Update your browser security from time to time.
  • Download an anti-phishing toolbar to your software.
  • Educate employees about cybersecurity.

3. Ransomware

Ransomware is the most common type of threat in the hedge fund world. This is a malicious tactic in which attackers use software to attack a system and in return demand a ransom to restore access to the data. Simply put, it means taking a computer system as captive.

Since funds being digital assets cannot function on their own, this leads to critical losses. The financial sector is more likely to be threatened by ransomware, as victims usually end up paying the ransom. This attack is the most common in hedge funds with a rate of up to 90%. However, with a strong cybersecurity system, you can spare your system or your funds from ransomware attacks. By being aware of the different types of ransomware attacks that can be injected into the computer, one can take the necessary action when desired. Locker, Doxware, Popcorn Time ransomware, Crypto / Encrypt or malware and Scareware are just a few examples.

Tips to protect yourself from ransomware

  • Investment firms have taken proactive steps to protect against malware and ransomware. Some of the suggested security measures include:
  • Learn about cybersecurity by enrolling in a cybersecurity training program.
  • Make sure the latest antivirus software is installed.
  • Take advice from cybersecurity experts to develop a resilience plan to allow your critical operations to come to a standstill even in the event of a ransomware attack.
  • The software that can help manage risk in hedge funds is MetaTrader 5. It is a full cycle hedge fund software which is all-in-one software for hedge fund managers. It includes all the necessary elements that meet all the needs required to operate a full finance service and eliminates the need for other software. When it comes to risk management in speculative finance, MetaTrader 5 was considered to cover this factor effectively.

The MetaTrader 5 platform can be customized to suit your business needs, as the platform supports multiple sets of configurations and settings. All configurations and settings are easy enough to use with a variety of business automation tools to reduce costs and maximize operational opportunities.

With its maximum mobility, it allows employees to manage and access assets even during times when they are stranded. Also, for investors, they can see the performance and request an investment at any time.

Conclusion

If you are considering starting a hedge fund or are already in the business, implementing a comprehensive risk management strategy should be of paramount importance to you. In the technical world we live in today, cybercrime tops the list of the biggest threats facing the investment industry despite the protections against them.


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