A large section of the asset management business is comprised of hedge funds, and they, along with many other sectors of the financial services industry, are being challenged by the present macroeconomic situation.
Profits across the board are declining due to the oil crisis, declining consumer confidence, and rising inflation. Opportunities to make profits from investments are becoming increasingly scarce. These conditions necessitate that hedge funds, who are notorious for their bullish, risk-seeking mindset, boost the ante and be prepared to seize every opportunity at a moment’s notice.
So what happens if your technology breaks at that precise moment? A few seconds of downtime may be devastating to revenues, with millions of dollars lost each second – and that’s without counting the opportunity costs incurred when a system breakdown prevents you from closing a lucrative contract at the optimal moment. Despite the expense, IT disruptions continue to plague businesses all too frequently.
There is nothing new for hedge funds to utilize technology; in fact, the vast majority of businesses have adopted technology in their typical aggressive style. Nonetheless, many organizations have failed to guarantee that their end-to-end operations are sufficiently resilient to prevent system disruptions.
How then can you ensure that your technology systems are operating at peak efficiency in order to maximize the likelihood of earning returns?
To effectively minimize risks, businesses must always have complete visibility into their infrastructure. Thus, ‘observability’ rather than monitoring is the operative term. It focuses on unknown-unknowns as opposed to known-unknowns. Observability addresses the issue of why a system is not operating, whereas monitoring indicates whether or not the system is operational. Real-time observability of all relevant structured and unstructured data is crucial; by utilizing technology to achieve this, hedge funds may significantly minimize mean time to resolution (MTTR) – the amount of time required to address problems if they arise. In addition, the necessity of early disclosure of possible problems helps funds to identify and resolve problems before they escalate. Simply put, events that affect systems have an effect on income.
Using technology to provide better control of capacity levels may also contribute to the efficiency and sustainability of IT systems. Frequently, hedge fund technology is unique, and the management tool that supports this must be purpose-built. Monitoring the most intricate and linked IT estates necessitates a platform that is versatile and configurable, allowing you to develop your own scripts to monitor your vital infrastructure at scale.
Technology and system failures have repercussions that extend beyond the immediate inability to trade and exploit market opportunities; investor trust is also at risk. Investors entrust their capital’s growth not just to a fund’s strategy, but also to the operational infrastructure that supports the fund’s models. Educated investors conduct Due Diligence on the company’s whole activities; IT performance is of major and rising relevance to investors in the present day. Thus, it is crucial that businesses have solutions in place to ensure that they remain “always on,” regardless of what is occurring in the outside world.
In a world where the macroeconomic storm has little chance of abating in the near future, it is imperative that businesses take charge of the controllable and ensure that they provide themselves with the best potential to succeed. And although technology cannot solve every problem, putting the correct mechanisms in place assures that you – and your bottom line – will perform well when the time comes.