How to improve your firm’s operations
The increasing pressures on private equity firms to follow compliance rules and maintain transparency, coupled with the plethora of online systems to manage several communication avenues and priorities both internally and externally, are presenting some very real challenges for financial organisations today.
Private Equity Wire spoke to George Ralph of RFA to find out about the ways the company helps private equity firms navigate any obstacles that may show up along the way.
A certified GDPR, cyber assessor, auditor, architect and cybersecurity and RegTech professional, George has extensive technical experience in network and server architecture, large scale migrations utilising leading technology brands, and IaaS offerings.
Do you think PE firms are moving away from email as their primary communication tool? If so, why and what are they using instead?
We’re not seeing our PE clients moving away from email, it is still actually the primary communication tool that they use. Yes, they’re looking at other communication tools too, especially the more instant, collaborative tools, like Microsoft Teams and Slack, but they tend to have specific functions and email is still a primary tool.
Microsoft Teams is fantastic at bringing remote teams together for conference calls and group video calls, as well as one to one, or one to many instant message chats. Conversations are threaded so easy to find and kept in one place.
Slack is another fantastic tool for asynchronous communication. Usually used by client’s internal teams or project teams to collaborate on specific projects, we are also seeing it being used to coordinate support enquiries in some cases. What we’re not seeing is a wholesale replacement of email with tools like Slack. It isn’t always appropriate for investor communications for example, or regulator communications. Email still wins out here. In fact, Slack itself has recognised the need to co-exist with email, and now allows users to integrate the Outlook calendar and send emails to Slack from Outlook.
What can firms do to ensure that communication tools don’t become a security risk or compromise their obligations relating to recording and transparency?
Cybercrime tactics have become so elaborate that even the most vigilant users can be taken in by sophisticated spear phishing scams. Advanced phishing techniques are elaborately customised to target specific organisations and use spoofing and impersonation to blend in and fool users. RFA works with clients to build a secure, scalable IT infrastructure that can support the communication and collaboration systems they prefer to use. Most of our private equity clients use Microsoft Office 365 or G-Suite as their email system, both of which have inherent security features and add-ons to ensure they are compliant with FCA data protection and information security regulations. Additional security layers that scan emails for anomalies provide additional data protection, and multifactor authentication forms an important part of firms’ identity and access management solutions. Microsoft doesn’t enforce out of the box multi factor authentication on Outlook web access or Teams for example, so we recommend that as a simple first step to embedding further security into the toolset.
For meeting recording and transparency requirements as set out in regulations such as MiFID II, there are integrations that can provide an auditable trail of communications across any electronic communication platform, including instant messages. Some clients have gone even further and worked with our custom development team to integrate Outlook with their order and portfolio management systems ensuring that all communications with investors are automatically recorded in a centralised location.
What other technology solutions could PE firms use to improve or streamline operations?
Making sense of data while staying secure and keeping on top of compliance requirements is a big issue for private equity firms. RFA has responded to that by developing a set of managed data services, which cover data warehousing, data governance, data recovery and DR, data ingestion and analytics. Offered as a set of managed services, RFA’s private equity clients can now store, manage, retrieve and analyse their structured and unstructured data sets, safe in the knowledge that they are compliant with all data protection regulations. A key part of the managed data services portfolio is Compliance Park. Essentially, it’s a workflow tool and secure document vault for policies and procedures which sits outside of our clients’ and our own infrastructure, for absolute autonomy and security. It has been designed to help clients meet their regulatory requirements, prompting on contract end dates and key dates throughout the year. COO’s within our PE customer base have found it particularly useful as it prompts them to do regular reports, such as AIFMD Annex IV reporting.
In addition, our data management services support our private equity and hedge fund clients as they strive to mine data for intelligence that will help them optimise internal processes and improve deal decision making. Because private equity firms are heavily regulated and their data science capabilities are limited, they need specialists to help them make sense of their structured and unstructured data but may not feel the in-house investment is justified. RFA leverages a secure and compliant data warehouse which ensures data governance for their pool of disparate data. Using integrated data ingestion tools to pull data in from different sources, such as Bloomberg, Salesforce, Factset, Dealcloud, SS&C and many more, RFA enables firms to use advanced business intelligence tools to analyse their data sets. When AI and machine learning capabilities are applied, the data becomes even more useful and firms can use it to model and predict how investments might grow or how investors behaviour might change and impact their business. As a complete managed service, our clients need no advanced programming or data science skills inhouse and the costs are regular, manageable and predictable.
We pride ourselves on not only responding to our clients’ needs, but to anticipating them based on our knowledge of the marketplace, changing conditions and insights into the most innovative technology out there. We develop solutions that our clients need to be secure, efficient, profitable and competitive, sometimes, before they even know that they need them.
Managing Director, RFA
George Ralph CITP, has successfully founded three technology firms along with C-level advisory services include M&A to numerous firms. George is a true leader and has been managing teams internationally, and leading technology transformation projects for over 20 years. A certified GDPR, Cyber assessor, Auditor, Architect and widely experienced cybersecurity and RegTech professional, George has extensive technical experience in network and server architecture, large scale migrations utilising leading technology brands, and IaaS offerings.