Why the cloud is critical to business continuity management
By George Ralph, RFA
Published: 28 November 2022
2022 has been a challenging year for many firms in alternative asset management. There are a plethora of business continuity threats and most of these belong in the tech space. Cyberattacks are a critical concern for all firms and their impact can cause significant damage to networks, as well as causing financial loss and potentially damaging reputation too.
It is a reality that business continuity is often overlooked as fund managers and IT teams seek to operate systems on a day-to-day basis. Yet in the current geopolitical and cyberthreat landscape, businesses could be at greater risk of maintaining their normal daily operations.
Before pandemic, a financial services’ firm business continuity plan involved a server and firewall. However, business continuity in 2022 are based around much bigger event driven activities such as cyberattacks on firms. The pandemic triggered many business leaders to reassess their operational resilience. As the world embraced increased remote working organisations were prompted to review their operational resilience. According to PWC’s report of last year, 30% of business leaders shared that they did not have a designated core crisis response team within their organisation prior to the pandemic. What’s more, only 35% of business leaders believed that they had a crisis response that is ‘very relevant’ to the current economic, social, and geopolitical climate. 95% of businesses reported that they needed to improve their crisis management capabilities.
Whilst it is true that technology can create opportunities for businesses, it also comes with challenges that can impact business continuity. Business leaders in the financial services sector are continually reassessing their IT structure and solutions in order to ensure a robust solution. Moving to a cloud-based network solution has been the biggest and most significant move by firms over recent years.
The benefits of a hybrid cloud environment are plentiful. Not only does cloud provide alternative investment firms with the ability to scale due to movements in the market as volatility can be caused by external events such as physical or environment setbacks, as well as changes in the geopolitical landscape as well as fluctuations within the financial markets. These can all have a significant impact on business continuity.
Whilst a cyberattack can result in downtime for a company’s day to day operations, firms need to be able to be prepared for how this kind of disruption impacts their systems beyond the attack. A robust business continuity strategy helps a company function at an acceptable level following a cyberattack or disaster. The cloud is a critical feature of a BCP’s goal of being able to help businesses carry out operational continuity within their disaster recovery plan. A cloud based set up lends itself to an outsourced IT model. This supports alternative investments firms through the ebb and flow of day-to-day trading, not only to provide additional resource, but also to give confidence that their IT is being managed by a specialist third party vendor.