By Neil Jones, Director of CyberSecurity Evangelism at Egnyte

It’s easy to see why private equity firms are a prime target for cyberthreat actors. The shift to remote and hybrid models of working during the pandemic has rendered these high value organisations more vulnerable to data breaches. From early 2020 until April 2021, financial sector cyber attacks increased an estimated 238%, and the costs of data breaches have also soared, with the average total cost of a data breach now estimated to be $4.2 million, according to IBM.

And, the estimated value of worldwide private equity assets under management (AUM) makes it a very attractive target for cyber-attackers, with assets predicted to reach $5.8 trillion by 2025 according to a recent report by Deloitte. Cybersecurity ranks as a top five priority on the agenda of private fund CFOs, as detailed in a recent Intertrust Group survey.

With cyber attacks becoming increasingly sophisticated, thanks to artificial intelligence (AI) and self-learning malware, financial organisations don’t always know where to start to proactively address this growing problem. But data governance holds a vital tactic to mitigate risks, through its set of strategic practices that can be used to organise and manage data throughout its lifecycle.

Investing in data governance needs to be part of a wider cultural security education within an organisation that filters through every layer of the business. The right tech partner can help to implement it to deliver five key benefits for private equity firms:

1. Minimising the risk of insider threats

It may seem preposterous that threats are lurking within the business, but a 2021 Verizon Data Breach Investigations Report revealed that insiders account for 44% of threat actors within the financial and insurance sectors. That group might include disgruntled employees stealing data as they change jobs, contacts selling compromised data, or end users who carelessly fall victim to security attacks.

With average private equity firms comprising seven active portfolio companies, this offers generous attack potential, with sensitive information widely accessible across these portfolio companies.

It’s important to choose a data governance solution which effectively monitors for unusual user behaviour, such as uncharacteristic downloads of large volumes of sensitive company files. A feature which reinforces secure file-sharing best practices only allows sharing information on a need-to-know basis.

2. Securing remote devices

With employees’ work-from-anywhere workstyle, adding apps and devices into the networks introduces a new hazard for traditional security systems. With IT  ‘out of sight, out of mind,’ in a Work from Home environment, security and compliance training is less formalised and important security protocols are frequently bypassed.

Through deployment of  a cloud-based data governance solution, users can collaborate securely on sensitive data in the cloud. Their content can still be accessed from anywhere via their preferred devices. Freely managing and editing documents and contracts is not infringed upon, which enables business continuity. Integrating collaborative business apps like Microsoft Teams, Slack, and DocuSign helps to build productivity.

Content governance works best for private equity firms that insist users follow cybersecurity safety processes. Regularly changing Wi-Fi passwords and not sharing business devices with family members are important worker security habits.

3. Combatting ransomware attacks

It’s important for private equity firms to understand that ransomware attacks are a prevalent and business crippling security issue. A Performance Improvement Partners study reports that 94% of cyberattacks on private equity firms use social engineering techniques to trick employees into sharing information or installing malware. Ransomware spreads throughout the network to encrypt sensitive files and prevent worker access to critical data.

An effective ransomware detection solution combines machine learning-based behavioural analytics with signature-based protection to identify suspicious activity such as file renaming, and changes in file entropy. To support this, user education on the importance of not clicking on potential phishing emails or visiting suspicious websites is vital to improve vigilance.‍ Users need regular reminders on safe storing methodology and sharing of files within agreed platforms.

4. Keeping up with compliance requirements

In a rapidly-evolving compliance landscape, data privacy regulations are increasing. Organisations must stay abreast of new compliance rules and automation provides the most practical method to ensure the portfolio companies’  compliance, remain compliant whilst not curbing their productivity.

It’s important to choose a solution that automatically identifies and inventories sensitive data wherever it resides using hundreds of built-in data patterns and proprietary AI. A solution with an easy-to-use dashboard proactively alerts users about  any potential risks, to prioritise handling of any threats as soon as they arise.

A solution which offers automated compliance and content classification policies that meet data privacy and industry mandates is advisable, including GDPR, UK GDPR, CCPA, PCI-DSS, the NYDFS Cybersecurity Regulation and Sarbanes-Oxley.

It is vital to educate the technology users in your organisation to complement all technology-based compliance activities, to reinforce their role in storing and sharing data securely.

5. Maximising operational efficiency

A completely hybrid platform will enable you to modernise your data governance capabilities, while maintaining your company’s existing hardware. Specifying a predictable, SaaS-based deployment model will maximise end users’ collaboration capabilities.

Combined data governance and worker vigilance

Data governance is one of the most effective ways to secure investment data and mitigate risks, by applying strategic practices to organise and manage data throughout its lifecycle. Finding a security-accredited tech partner to deliver it, in conjunction with improving user vigilance, is the optimal route to keeping the bad guys at bay.