Turning Challenges into Change: Financial Services COOs 2024 Outlook
As cybersecurity threats become more sophisticated and prevalent, Chief Operations Officers (COOs) in financial firms and investment management are increasingly recognizing the need to optimize their approach to managed IT and cybersecurity services. According to Agio’s 2023 Hedge Fund Cybersecurity Trends Report, 74 percent of COOs acknowledged an increase in cyberattacks, with 78 percent noting a rise in the severity of these attacks.
Facing the challenges posed by more advanced bad actors, COOs are actively seeking avenues to improve operational efficiency, fortify defenses, and achieve cost-effectiveness considering the escalating cyber risks. A notable trend has emerged, with 90 percent of COOs expressing agreement that consolidating Cybersecurity and Managed IT enhances the overall security posture. This mirrors a similar trend observed among Chief Financial Officers (CFOs) in the financial services sector.
This blog post explores the key pain points faced by financial services COOs, as highlighted in our 2023 survey series, and delves into the solutions they are implementing to navigate the ever-evolving landscape of technology and cybersecurity.
Key Challenges Confronting Alternative Investment COOs
- Navigating Investor Expectations: 66 percent of COOs from our cybersecurity survey plan to outsource to meet investor demands for an external provider in cyber governance. This mirrors a trend observed among CFOs, as both regulators and investors increasingly advocate for more independent validation in annual penetration testing and security risk assessments.
- Inflation and the Great Resignation: According to our 2023 Hedge Fund Managed IT Report, 53 percent of COOs reported that their outsourcing needs increased due to rising inflation rates, and the effects of the Great Resignation have only exacerbated the situation. The rising costs due to inflation and the disruptive impact of the Great Resignation have made it challenging for COOs to maintain the operational efficiency and financial stability of their organizations. These economic factors put immense pressure on COOs to make cost-effective decisions, which include managing their IT and cybersecurity budgets efficiently.
- Uptime and Performance Quality: Ensuring uninterrupted service and high-quality performance is of the utmost importance for COOs. In our managed IT survey, every COO that participated mentioned the reason they would outsource the consolidation of managed IT and security operations with a single provider is to achieve better uptime and quality of operations. The requirement for better uptime and service quality often necessitates investments in cutting-edge technology and skilled personnel.
- Remote Work Security: 92 percent of responding COOs in our Managed IT survey indicated that the demand for improved security for remote users (WFA) is leading them towards adopting a multi-cloud environment. COOs must oversee the adoption of multi-cloud solutions to facilitate remote work, but they also need to ensure robust cybersecurity measures in this distributed environment.
- Escalating Incidents and Severity of Cyberattacks: COOs are grappling with the intensifying challenge of cyber threats as they experience a surge in both frequency and severity. The escalating nature of these cyber threats puts added pressure on COOs to fortify their cybersecurity strategies and safeguards.
COOs Strategic Changes for a Resilient Future
- Comprehensive Outsourcing Strategy for Cyber Governance: To meet investor demands for external cyber governance providers, COOs can implement a comprehensive outsourcing strategy by engaging specialized cybersecurity service providers in governance, risk management, and compliance (GRC). This includes regular annual independent validation through external providers for activities like penetration testing and security risk assessments, continuous monitoring solutions to offer transparent insights into the cybersecurity posture, and strategic communication channels to keep investors informed about proactive risk management measures.
- Consolidating Managed IT and Cybersecurity: Implementing a rigorous cost-control strategy that includes periodic financial audits, vendor risk assessments and negotiations, and the evaluation of IT infrastructure for potential cost optimizations. Partnering with a Managed Service Provider (MSP) that offers cost-effective solutions and has a strong track record in retaining talent. As a COO, you can benefit your company by increasing the internal focus on operations.
- Preventing Downtime through a Proactive Approach: COOs must find a balance between ensuring uninterrupted operations and controlling costs. Outsourcing to an MSP with specialized IT and cybersecurity expertise, proactive monitoring, and cost-effective solutions that may alleviate the pain point of excessive expenses. These solutions allow COOs to focus on their organization’s core competencies while entrusting IT and cybersecurity management to experts. However, choosing the right MSP is crucial for the success of this strategy.
- Unlocking Multi-Cloud Security: COOs can develop a comprehensive cloud security strategy that combines end-to-end encryption, robust access control, and regular security assessments to protect data in multi-cloud environments. Agio provides a variety of security assessments, including vulnerability assessments concerning your data protection, third party and vendor cybersecurity risk assessments, and many more that target both managed IT and cybersecurity services. In collaborating with Agio, COOs can learn more about a multi-cloud environment and how to successfully manage it.
- Implement a Robust Cybersecurity Framework: In the face of escalating cyber threats, COOs must prioritize a robust cybersecurity framework, including advanced threat detection tools for real-time threat mitigation, regular security audits to identify and address vulnerabilities proactively, employee training programs to enhance cybersecurity awareness and minimize human error, and collaboration with MSPs for specialized expertise in cybersecurity defense.
Get Ahead of Cyber-Attacks and Keep Operations Running Smoothly
As cyber threats both increase in frequency and intensity, the role of a COO is becoming increasingly challenging. The statistics demonstrated in both Agio’s Managed IT and Cybersecurity reports clearly show that COOs are dealing with mounting pressure and are looking for ways to protect their businesses against cyber-attacks.
Agio, with its commitment to excellence and its focus on delivering solutions that align with the pain points of COOs, is a trusted partner that can assist these individuals in their mission to fortify an organization.
In the face of ever-increasing cyber threats, COOs must be agile and cautious to ensure the security and productivity of their operations. With Agio as a reliable and dedicated ally, COOs can navigate the digital storm with confidence and resilience. Contact us today.
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