With a treasure trove of sensitive personal and financial data, private equity firms have become prime targets for cybercriminals. The State of Ransomware in Financial Services 2023 revealed that ransomware attacks on financial services, including private equity firms, increased from 55% in 2022 to 64% in 2023.
This escalating threat landscape puts IT leads and private equity managing directors in a precarious position. Balancing the demands of investors, the expectations of C-suite executives, and the ever-present risk of cyber threats is no small feat.
This article explores the significance of cybersecurity managed services in securing private equity IT infrastructure, highlighting the potential cyber threats and the importance of proactive measures. You’ll understand actionable insights on fortifying your firm’s cybersecurity posture and making informed decisions that align with your business goals.
Understanding Cybersecurity Challenges in Private Equity
Private equity firms and their portfolio companies are increasingly becoming targets for various cyber threats, each with devastating consequences. Such cyberattacks include the following:
Phishing
In phishing attacks, cybercriminals use social engineering techniques to impersonate trusted contacts, tricking employees into revealing sensitive information. The consequences can range from financial loss to severe data breaches. In 2020, hackers tricked 3 British private equity firms into sending them $1.3 million using spear-phishing.
Ransomware
One of the most prevalent threats facing private equity firms is a type of malware, ransomware. Hackers encrypt sensitive data and demand a ransom for its release. According to IBM’s Cost of a Data Breach 2023 report, the global average data breach cost in 2023 was $4.45 million, a 15% increase over three years. Data breaches also cost an extra $150,000 compared to the typical data breach.
Spyware
Another significant concern is spyware, which covertly captures passwords, financial data, and proprietary market research. This attack can include everything from login credentials to sensitive financial data, posing a significant cybersecurity risk.
Sometimes, the risk comes from within. Disgruntled employees or inadequate access controls can lead to internal threats, often more challenging to detect and mitigate.
Investing in robust cybersecurity measures is crucial, as prevention costs far less than remedying a cyberattack.
The Importance of Proactive Cybersecurity Measures
Due diligence in assessing vulnerabilities, robust risk management, and a well-defined incident response plan can distinguish between a secure IT environment and a disastrous data breach. These proactive measures are essential for maintaining a safe and cost-effective IT infrastructure.
Proactive cybersecurity is integral to value creation for PE firms. Ensuring that portfolio companies adopt these measures can significantly reduce cybersecurity risk, thereby enhancing asset performance and investor trust.
Investing in proactive measures like regular vulnerability assessments and threat intelligence can lead to cost savings in the long run by avoiding the financial and reputational damages associated with data breaches. Moreover, IT compliance managed services providers can assist in conducting a cybersecurity risk assessment, offering additional protection against cybercrime.
By adopting a proactive approach, your business:
- Maintains compliance.
- Prevents data breaches.
- Reduces clean-up costs.
- Simplifies reactive security measures.
This approach builds customer trust and allows you to avoid emerging threats.
Comprehensive Cybersecurity Solutions for Private Equity
A multi-layered approach to cybersecurity is essential to navigate the myriad of cybersecurity threats that private equity firms face. Here are some of the vital cybersecurity services that can fortify the IT infrastructure:
Backups
Regular backups are a non-negotiable aspect of cybersecurity. They protect against data loss and offer a safety net during ransomware attacks. Backups can be stored in secure cloud environments like Microsoft’s Cloud for Sovereignty, providing an additional layer of security.
Compliance and Regulations
Compliance with regulations like SOC2, ISO27001 or GDPR is a legal requirement and demonstrates due diligence in protecting information security and data privacy. IT compliance managed services can help achieve and maintain compliance, improving the overall cybersecurity posture.
Endpoint Protection
Endpoint protection safeguards the endpoints connecting to your network, such as laptops and mobile devices. This solution is crucial for maintaining a safe IT environment while meeting your business’s growing demands.
Firewall Setup
A robust firewall is the first defense against cyber threats, filtering out unauthorized access and potential cyberattacks. The firewall is essential for private equity firms that handle sensitive data and must comply with regulations like GDPR.
Zero Trust Model for Identity Security
Adopting a Zero Trust model for identity security can significantly reduce the attack surface by implementing a least privilege framework. This model provides a secure foundation to focus on asset performance and value creation without worrying about data breaches.
While these cybersecurity solutions offer a reliable defense mechanism, the expertise required to implement and manage them effectively often lies outside the core competencies of most private equity firms. This is where IT consulting firms specializing in cybersecurity managed services come into play.
The Role of IT Consulting Firms in Cybersecurity Managed Services
IT consulting firms provide various services, including managed cybersecurity services and co-managed cybersecurity, designed to bolster your IT infrastructure.
One of the key offerings is the ability to build a cybersecurity strategy that promotes efficiency in safeguarding your private equity’s IT infrastructure. This strategy often begins with a comprehensive cybersecurity assessment. The process scopes the current cybersecurity ecosystem to understand the infrastructure, identify areas for improvement, highlight cybersecurity risks, and align with business outcomes.
Following the assessment, a detailed cybersecurity roadmap is laid out. This roadmap charts the mid to long-term cybersecurity blueprint, encompassing internal company processes and systems. It serves as a guide for implementing robust cybersecurity measures tailored to your business needs.
Managed IT security firms also offer cybersecurity remediation and managed cybersecurity services. These cost-effective packages of security monitoring tools are tailored to protect your business from malicious activities such as insider threats, phishing scams, and data breaches. Outsourcing these critical functions lets you focus on essential operations, knowing their security needs are in expert hands.
Benefits of Outsourcing Cybersecurity to the Experts at ne Digital
Outsourcing cybersecurity to a managed services provider has several advantages, from defining accurate security costs for complex application integrations to resolving hindrances in automation. Managed cybersecurity services can significantly improve system uptimes, boost your IT ROI, and help you achieve and maintain a robust cybersecurity posture.
With our expertise, ne Digital stands out as a leader in this domain. Our cybersecurity managed services are desired to protect your mission-critical assets around the clock, no matter how challenging the IT environment is. With a track record of successful IT security assessments under the NIST Cybersecurity Framework and SOC2, we offer next-gen security application control, comprehensive vulnerability scans, and much more. Our services free your in-house teams to focus on core organizational activities, providing you with a competitive advantage.
ne Digital is an IT consulting organization that designs and operates for private equity asset value creation. We run Managed Cybersecurity, Microsoft 365, and Azure Infrastructure for mission-critical workloads.
We are expert architects and certified engineers as Microsoft Solutions Designation Partners for Microsoft 365 Modern Work and Azure Infrastructure.
Contact us today to learn more about how to fortify your private equity firm’s cybersecurity defenses or explore our comprehensive cybersecurity portfolio.
