In a world where a single compromised Slack account can bring trading operations to a halt - and where regulators are cracking down on the casual use of WhatsApp for sensitive discussions - hedge funds are facing a hard truth in 2025: secure, resilient communication was never optional.
Out-of-Band (OOB) communication refers to secure channels that exist separately from your organisation’s primary IT and communications infrastructure. These platforms are designed for worst case scenarios - major cyber incidents, infrastructure failures, and insider threats - where traditional systems are either unavailable or untrustworthy.
With regulatory pressure increasing and threat actors growing more sophisticated, CTOs, CISOs, and COOs must recognise that resilience isn’t just about system uptime or backup generators. It’s about ensuring leadership and crisis teams can communicate securely when it matters most.
The communication stack in most hedge funds typically includes collaboration tools like Microsoft Teams or Slack, corporate email systems, mobile messaging, and possibly encrypted apps like Signal or WhatsApp for sensitive discussions.
But all of these channels are increasingly viewed by regulators and attackers alike as points of weakness:
Since 2021, the SEC fined dozens of financial institutions more than $2.5 billion in total for failing to maintain records of off-channel communications. Similar enforcement actions are underway in the UK and EU. Regulators no longer accept the “informality” of encrypted consumer apps when it comes to material business decisions.
Put simply: hedge funds must ensure they can communicate in ways that are secure, resilient, and provable. And that’s where Out-of-Band comes in.
Hedge funds are among the most lucrative targets for cybercriminals. The combination of valuable intellectual property, lean operational teams, and fast-moving capital makes them uniquely exposed to digital threats.
In 2025, the most pressing threat vectors include:
These risks are amplified by the fact that in a crisis scenario, core communications infrastructure may be inaccessible, untrusted, or actively compromised.
One of the most overlooked aspects of communications risk is the cross-jurisdictional reach of regulatory frameworks.
In 2025, regulators don’t just expect firms to manage communications securely - they expect them to do so with demonstrable controls, and they don’t care where your headquarters is located.
If you operate in a regulated market - whether the UK, US, or EU - you are subject to that region’s rules:
In all jurisdictions, the message is clear: ad-hoc messaging apps and undocumented workarounds are no longer defensible. Hedge funds must build robust, policy-aligned communication channels that hold up under forensic scrutiny.
Out-of-Band communication isn’t just a cybersecurity tool box - it’s a resilience enabler.
When your primary systems go down - or worse, when you suspect they’ve been compromised - OOB platforms act as a digital war room. They allow crisis teams to coordinate, access critical documents, initiate action plans, and communicate externally, all while preserving security and auditability.
Use cases include:
An effective OOB platform is far more than a simple messaging app. It must be separate, secure, auditable, and rapidly accessible - ideally from smartphones, tablets, and personal devices with built-in security controls.
When evaluating OOB solutions, hedge funds should ensure the platform aligns with technical needs and regulatory expectations. Key features to prioritise:
OOB is not about reinventing your daily workflow - it’s about giving you a secure fallback that can function when everything else fails.
To be effective, OOB communications cannot live in isolation or only be tested once a year. They must be integrated into day-to-day resilience planning, security architecture, and governance frameworks.
OOB isn’t a last resort. It’s a first-class tool in maintaining continuity, control, and compliance under pressure.
The regulatory landscape has changed. The threat landscape has evolved. And hedge funds - often agile, fast-moving, and reliant on lean digital infrastructure - are under growing pressure to show they can weather disruption without exposing clients, strategies, or compliance posture.
Out-of-Band communication is no longer a luxury for hedge funds. It is a critical pillar of resilience and a visible marker of maturity.
In 2025, the question is not “do you have a backup channel?” It’s “is your backup channel ready when the regulators, attackers - or both - come knocking?”