Cybersecurity is driving digital transformation in alternative investment institutions

As the alternative investment industry tackles a rapidly changing threat landscape, increased regulation, and a continuous need to innovate, most firms are increasing their DX and security budgets and cite security as critically important to their DX initiatives, according to IDC.

Senior leaders from 400 global alternative investment institutions in U.S., Canada, France, U.K., and Germany were surveyed to understand the current state of digital transformation and cybersecurity, identify key barriers and benefits of an aligned strategy, and explore the growing role of consulting services as strategic partners.

Investment in cybersecurity and digital transformation is growing, but execution in-house is decreasing with outsourcing trends increasing

89% of surveyed institutions are increasing their digital transformation and security budget in 2022 over 2021, and nearly half (48%) are increasing spending by at least 10 percent. Survey findings also indicate that institutions are increasingly leveraging consulting services and managed services providers to support initiative execution and management.

• Nearly 30% of institutions plan to heavily outsource to managed services providers in the next two years, more than doubling the current usage (12%)
• 51% of respondents will either heavily outsource to MSSPs or use a mix of MSSPs and managed threat detection and response providers in the next two years
• In addition to specific project work, 67% of respondents listed staff augmentation as a core reason to leverage consulting services

Cybersecurity is a driving force for digital transformation

57% of respondents identified security/privacy as their top concern about implementing digital transformation, and 35% placed policy development and investigations as a top concern as well, yet:

• 61% had undertaken security-focused digital transformation projects in 2021
• 47% indicated that risk assessment management was also a top priority for their digital transformation efforts, and
• 42% ranked security strategy and road mapping as a priority

“What these findings show is that the alternative investment market recognizes the value of coupling digital transformation and cybersecurity strategies, and firms are prepared to invest in such efforts, but struggle with execution due to obstacles outside of their control like staffing shortages,” said David Andrade, CEO of ECI. “This presents an enormous opportunity for third-party vendors, such as consulting firms and managed services providers, to step into more of a strategic partnership with these institutions and help enable lasting change.”

Institutions need outside expertise for time-intensive processes and emerging technologies

Threat monitoring, alerting and response is a time-consuming activity requiring specifically skilled and trained personnel; however, given the industry-wide skills gap, institutions are exploring vendor managed security solutions as a more cost-effective approach that allows in-house teams to focus on routine business and digital transformation efforts.

• 80% of institutions in North America and 81% in Europe indicated that cybersecurity consulting services are critical to digital transformation efforts
• The cybersecurity attributes outsourced most often include security operations center (SOC) presence and management (51%) and advanced threat detection technology (50%)
• 44% of respondents indicated that utilizing emerging tools and technologies are critical for enabling turn-key modernization in their enterprise

“Digital transformation initiatives with embedded cybersecurity are top of mind for most industries due to the significant impact DX can have on a company’s profitability, growth and risk management,” said Philip Harris, Director, Cybersecurity Risk Management Services at IDC. “With security taking a critical role, companies are turning to outsourced resources to both scale initiatives and build or maintain a strong security posture in the process.”

Survey findings show that most institutions recognize the value of DX with embedded security and are actively investing in these projects. Leveraging outsourced experts is a leading trend to ensure organizations are taking full advantage of DX opportunities and security is only increasing in significance to these projects and organizational success.

Source: https://www.helpnetsecurity.com/2022/07/05/cybersecurity-digital-transformation-alternative-investment-institutions/