GUEST ESSAY: 7 tips for protecting investor data when it comes to alternative asset trading

By Brian Nadzan

When it comes to alternative asset trading, protecting investor data is of critical importance.

Related: Preserving the privacy of the elderly

As more traders and investors engage in these investment avenues, it is crucial to adopt robust security measures to safeguard sensitive and regulated information. Here are seven tips to protect investor data in alternative asset trading.

•Conduct regular penetration testing. Regular and thorough penetration testing is crucial for identifying vulnerabilities within trading systems. By engaging third-party experts to simulate real-world hacks, companies can proactively uncover potential weaknesses and address them promptly.


Penetration testing provides valuable insights into a system’s security posture, allowing companies to fortify their defenses and protect investor data from malicious actors.

•Foster collaborative partnerships. Having access to a partner focused in cybersecurity brings fresh perspectives and allows for an unbiased evaluation of the systems in use. These partnerships strengthen a security posture by leveraging the expertise of professionals who specialize in identifying vulnerabilities and allows them to suggest remediation strategies. By working together, a robust cybersecurity framework can be established to protect investor data.

•Employ real-time antivirus scanning. Implement a multi-layered approach to protect against potential threats. By using real-time antivirus scanning to detect and neutralize security risks as they enter the trading system, threats can be quickly identified and eliminated.

This includes scanning all materials, such as investor onboarding documents and communication. Real-time antivirus scanning enhances the security of investor data by providing immediate protection against known and emerging threats.

•Implement strong data encryption. Data encryption is fundamental for protecting sensitive information in alternative asset trading. Industry-standard algorithms for encryption can ensure all data, in transit and at rest, is safe.

Encryption renders data unreadable to unauthorized individuals, significantly reducing the risk of data breaches. Implementing strong data encryption protocols and adhering to best practices fortifies the confidentiality and integrity of investor data.

•Prioritize continuous threat detection. Maintaining continuous observability of the trading system is essential for early threat detection. It’s important to implement robust monitoring systems that analyze activities and network traffic, which identify unauthorized access or suspicious behavior.

Prompt detection and response to potential security incidents mitigate the impact of breaches, ensuring ongoing protection of investor data. Continuous threat detection is a proactive approach to maintaining trading environment security.

•Stay informed about security best practices. Staying current on the latest trends, emerging threats and industry best practices is crucial to security. Some great ways to keep a team informed on evolving security challenges and effective countermeasures include participating in industry forums, attending conferences and engaging with security professionals.

Active awareness of security developments allows for adaptable strategies in addressing emerging risks and effectively protecting investor data.

•Conduct employee training and awareness programs. Investing in comprehensive employee training and awareness programs is essential for a security-conscious environment. It’s important to educate staff on the significance of data protection, potential security threats and proper handling of sensitive information.

Enforce a culture of strong passwords, two-factor authentication and responsible data access practices to foster a security-conscious culture.

Protecting investor data is vital for maintaining trust and confidence in alternative asset trading. By adopting a comprehensive approach to security, fintechs and issuers can establish robust security measures. Safeguarding sensitive information not only mitigates risks but also allows investors to focus on maximizing their investment opportunities with peace of mind.

About the essayist: Brian Nadzan, is CTO/CISO of Templum, a provider of technology and infrastructure solutions for the private markets. He has over 25 years of global leadership experience within the financial services industry, having spearheaded development across Electronic Trading, OMS, Risk, Compliance and Data.

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