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MSPs Identified as Integral to the Digital Transformation of the Alternative Investment Industry

As the alternative investment industry tackles a rapidly changing threat landscape, increased regulation and a continuous need to innovate, firms are increasing their digital transformation and security budgets and cite security as critically important to their transformation initiatives.

Commissioning IDC to produce its latest whitepaper, the results of which were published this week, Eze Castle Integration (ECI) has identified where cybersecurity meets digital transformation, specifically for alternative investment institutions.

Alternative investment institutions include private equity, venture capital, hedge funds, commodity and derivatives trading houses.

ICD surveyed senior leaders from 400 global alternative investment institutions in the US, Canada, France, the UK and Germany to gauge the current state of digital transformation and cybersecurity, identify key barriers and benefits of an aligned strategy and explore the growing role of consulting services as strategic partners.

Divulged throughout its whitepaper, the Boston-headquartered managed service provider (MSP) detected that these firms are increasing their budgets for security and digital transformation against a backdrop of increasing threats and regulation.

In-house, out-house

Investment in cybersecurity and digital transformation is growing, but execution in-house is decreasing with outsourcing trends increasing.

Eighty-nine per cent of surveyed institutions are increasing their digital transformation and security budget this year; with nearly half increasing spending by at least 10 per cent.

The whitepaper also indicates that institutions are increasingly outsourcing consulting services and MSPs to support the management and execution of their digital transformation initiatives.

On this note, around a third plan to outsource to MSPs in the next two years, more than double the current usage of 12 per cent.

Fifty-one per cent will either heavily outsource to managed security service providers (MSSPs) or use a mix of MSSPs and managed threat detection and response providers in the next two years.

In addition to specific project work, 67 per cent listed staff augmentation as a core reason to leverage consulting services.

The driving force behind digital transformation

Fifty-seven per cent of respondents identified security and privacy as their top concerns regarding the implementation of digital transformation, while 35 per cent were equally concerned about policy development and investigations.

Defining figures pulled from the whitepaper include:

  • Sixty-one per cent had undertaken security-focused digital transformation projects in 2021
  • Forty-seven per cent indicated that risk assessment management was also a top priority for their digital transformation efforts
  • Forty-two per cent ranked security strategy and road mapping as a priority

The company’s CEO David Andrade describes the findings of the whitepaper as a lightbulb moment for the alternative investment market, which has come to recognise the value of coupling digital transformation and cybersecurity strategies.

David Andrade, CEO of ECI
David Andrade

“Firms are prepared to invest in such efforts,” explains Andrade, “but struggle with execution due to obstacles outside of their control like staffing shortages.”

Andrade emphasises the opportunity this presents for third-party vendors, allowing consulting firms and MSPs to “step into more of a strategic partnership with these institutions and help enable lasting change.”

Time-intensive processes, emerging technologies and outside expertise

The industry-wide skills gap identified in the whitepaper indicated that institutions are exploring vendor-managed security solutions as a more cost-effective approach to mitigating the time-consuming activities of threat monitoring, alerting and response.

Outsourcing in this way is affording in-house teams the time to focus on routine business and digital transformation efforts.

Key figures include:

  • Eighty per cent of institutions in North America and 81 per cent in Europe indicated that cybersecurity consulting services are critical to digital transformation efforts
  • The cybersecurity attributes outsourced most often include security operations centre (SOC) presence and management (51 per cent) and advanced threat detection technology (50 per cent)
  • Forty-four per cent indicated that utilising emerging tools and technologies are critical for enabling turn-key modernisation in their enterprise

Philip Harris, director of cybersecurity risk management services at IDC, the company commissioned to produce the whitepaper, reiterated the importance of embedded cybersecurity within the initiatives of a digital transformation journey, and the significant role it plays within a company’s profitability, growth and ability to manage risks.

Philip Harris, director of cybersecurity risk management services at IDC
Philip Harris

“With security taking a critical role, companies are turning to outsourced resources to both scale initiatives and build or maintain a strong security posture in the process,” he comments.

The whitepaper demonstrates that most institutions recognise the value of digital transformation with embedded security and are actively investing in these projects.

Leveraging outsourced experts is a leading trend to ensure organisations are taking full advantage of digital transformation opportunities and security is only increasing in significance to these projects and organisational success.


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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