Cyber and Operational Risk: Building Cyber Resilience

RiskMindsOperational Risk:Building Cyber Resilience

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• People are often the weakest link – employees, vendors, customers

• Attacks span the traditional defenses – physical security, manipulation of staff, fraud, application security, malware

• Digital assets create more entry points

• It is not a matter of IF but to WHAT EXTENT you are compromised

Building Cyber ResilienceWe have heard from multiple #RiskMind2015 presentations that this is a growing problem


Global Regulatory LandscapeThe Regulatory Landscape is changing rapidly to address these concerns.

(FFIEC)Pilot

Cybersecurity Assessment

(FINRA)Equities Trading Initiatives and

Securities trader Registration

Q4 2014 Q1-3 2015 Q4 2015 2016

(SEC)Cyber Exams,

Issues Risk Alert

(FFIEC)Cybersecurity Assessment

Tool(CFTC)

Cybersecurity Requirements

(Fed)Cybersecurity Information Sharing Act

(SG CSA)National Cyber

Security Masterplan 2018

(SEC)IM Cybersecurity

Guidelines

Future/Proposed Rules

Current Rules

(NIST) Cybersecurity

Framework

Q3 2014 2016

(CFTC)High Speed

Trading Rules

(SEC)High Frequency Trading Rules

(HKMA)Cybersecurity

Risk Management

Circular

(BoE)CBEST

Vulnerability Testing

Framework

Source: Accenture analysis based upon publicly available data.


1. Training and Risk Culture – Taking your unique organization and infusing the right cyber risk behaviors

2. Controls – Where are the weak points – build robust set of controls across operations, business and IT

3. Measurement with a Purpose – What is going on without you knowing it – creating metrics which expose the risks

4. Operating Model – How do you work with the rest of the organization - assigning clear lines of accountability and ownership

5. Resilience – At some point it will go wrong, be prepared

The Top 5 Priorities to Get Right We will discuss 5 priorities and determine as a group if these are the top priorities

Priority #1 – Training and Culture


Cyber Risk CultureView of the OrganizationHow does your organization’s culture span these quadrants?

High Sociability

Low Sociability

High SolidarityLow Solidarity

Networked Cohesive

Fragmented Task Masters

The “Investment Bank”

The “Outsourced” Bank”

The M&A growth “Regional Bank”

The Organic growth “Retail Bank”

Influence of relationships

Influence of the “drive” to meet common goals


• Dynamic• Ideas flow freely• Metrics driven• Centralized

Cyber Function

• Decompose and define approaches

• No single solution

• Identify problem segments

High Sociability

Low Sociability

High SolidarityLow Solidarity

Networked Cohesive

Fragmented Task Masters The “Investment Bank”

The “Outsourced” Bank”

The M&A growth “Regional Bank”

The Organic growth “Retail Bank”

Influence of relationships

Influence of the “drive” to meet common goals

Training and CultureCultural View of the OrganizationHow does your organization’s culture span these quadrants?

• Consensus driven• Proud of brand• Emulate role

models• Tone from the top

• Individual accountability

• Incentives distort risk and culture

• Based on strong controls

• Clear metrics


Cyber Risk Pulse Check A highly engaging and dynamic diagnostic that rapidly assesses employee understanding of Cyber Security best practices and provides data-driven insights and benchmarking for your firm.

E N G A G E

M O T I VAT E

A N A LY Z E

Designed with advanced learning methods and game mechanics to create an immersive experience

First ever NYSE benchmark on Cyber Security that will allow for comparative analysis against cross-industry participants

Dynamic diagnostic environment that highlights the critical importance of Cyber Security, driving behavioral and cultural change

http://pages.s6.exacttarget.com/page.aspx?QS=c76003443ff9837d8ef9974a19a99cfa5f994776888b6bfc6115f9e9e82e4c33&campaign=701E0000000xb2E

NYSE





Priority #2 – Controls


Controls (Cyber Risk Enhancements Requirements) Traditional control frameworks evaluate effectiveness through an operational risk approach focused on residual risk.

1. Business / IT Process

2. Risk Identification and

Inherent Risk

3. ControlIdentification and Rating

Impact

Frequency | Severity

Risk Type

4. Residual

Risk Scoring

Process

Control Effectiveness

AttributesKey, Type

Control Layer

BusinessDomains

Scorecard

Dependencies

Applications

Cyber Scenarios and Trigger Events Active | Passive Risk

New Focus Renewed focus

Key Risk Indicators

Target Residual Risk

Value

Control Assessment Types Risk Control Self Assessment | Third Party | Applications | Infrastructure | Regulatory


Scenario: • Disgruntled employee

with access to customer data

• Employee working during non-working hours

• Downloading of files which vary from peer group

• It is month end and high IT usage is expected

Example ControlsUse case: Identifying insider threats based upon system and physical access to firm-wide assets with privacy data. Controls to Mitigate:

• Security – Abnormal physical access records vs normal patterns

• HR –Poor recent performance from supervisors, LinkedIn® resume updated

• IT – Alerts with network, server or database patterns which are historically misaligned to normal business operations

• Business – Correlate data usage by peer group for high impact activities related to reporting/extracts

• IT – Abort or suspend reporting when thresholds are reached for exporting or querying data

C1

C2

C3

C4

C5

Risk Score:

68/100

67/100

35/100

75/100

45/100

Investigate

Priority #3 – Measurement with a Purpose


Measurement with a PurposeCommon categories to consider for Cyber Risk Reporting

1. Board Level Reporting 2. IT Risks 3. Operational 4. Advanced

Analytics

Infrastructure

Third Parties

SoftwareInternal

Employee Training

Data Loss Prevention

Employee Monitoring

External

Vulnerabilities

Surveillance

Funding

Risk/Reward Decisions IT Operations

Fraud

Target Residual Risk

Access Management Physical Security High Crimes and

Investigation

New Focus Renewed focus

Priority #4 – Operating Model


Embed the first line of defense within technology organization. Create a centralized office with technology control officers across business lines which just focus upon IT.

Cyber Risk Operating Models An operating model defines the organization’s accountability for doing the work, supporting the right decisions and measuring effectiveness.

Centralize an entire department as 2nd line of defense with examinations across the lines of business. Build highly specialized team and track similar to compliance function.

Policy setting organization and influencer similar to data and privacy. Develop risk frameworks around IT, data integrity, and operations and run as 2nd line of defense.

Create an enterprise-wide risk function dedicated to identify, measure and respond to threats.

Option 1 – Dedicated Function

Option 0 – IT Centric

Option 2 – Cyber Czar

Option 3 – Risk Led


Operating Model Analysis Each option should consider the tradeoffs with the firm’s ability to Prevent and Detect Threats.

Effi

cien

cy

Ability to Prevent and Detect Threats Low

High

High








High

High

Valu

e to

Cus

tom

er


Option 1 – Dedicated FunctionOption 2 – Cyber Czar





High

High

Spe

ed to

Exe

cute





Priority #5 – Resilience


A Comprehensive Approach Helps Protect the Full Breadth of Entry Points and Operations which Underpin Financial Services Organizations

Detect

IdentifyRespond

Prevent

Detection and Identification – Tools and metrics to identify and log aspects to manage operations

Operational Monitoring – Aligning the tools to identify and detect threats along with their escalation and oversight

Event Response Plan – Structureto identify and manage action plans

Business and IT Controls – Oversight of the controls and their testing programs and how to leverage COBIT®, ISA, ISO/IEC, NIST controls

Operating Model – Specifying the structure with people, organization, roles, tools and processes to govern

Crisis Management – Structure to manage incidents and notify impacted parties

Risk Events - Scenarioswhich can impact the organization specific to Cyber threats

Risk Identification – Aggregated set of typical risk associated with Cyber Risk

How do we respond?

What is the impact?

How do we organize?

How do we monitor?


Resilience The ability to operate the business processes in normal and adverse scenarios without adverse outcomes

Intgerated: Identify, P

revent, Detect

Res

pons

e:E

very

sce

nario

GlossaryCBEST: Bank of England vulnerability testing framework

CFTC: U.S. Commodity Futures Trading Commission

COBIT: Control Objectives for Information and Related Technology. COBIT® is a trademark of ISACA® registered in the United States and other countries.

IEC: International Electrotechnical Commission

ISA: Information Society of Automation

ISO: International Organization for Standardization

Fed: Federal Reserve System

FFIEC: Federal Financial Institutions Examination Council

FINRA: Financial Industry Regulatory Authority

HKMA: Hong Kong Monetary Authority

NIST: National Institute of Standards and Technology

SEC: Securities and Exchange Commission

SG CA: Cyber Security Agency of Singapore

RiskMinds Operational Risk:Building Cyber ResilienceDisclaimer:

This presentation is intended for general informational purposes only and does not take into account the reader’s specific circumstances, and may not reflect the most current developments. Accenture disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and completeness of the information in this presentation and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professionals.

About Accenture

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Learn more about cyber risk and resilience:www.accenture.com/CyberRisk

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