Cyber and Operational Risk: Building Cyber Resilience
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RiskMindsOperational Risk:Building Cyber Resilience
Copyright © 2015 Accenture All rights reserved. 2
• 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
Copyright © 2015 Accenture All rights reserved. 3
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.
Copyright © 2015 Accenture All rights reserved. 4
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
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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
Copyright © 2015 Accenture All rights reserved. 7
• 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
Copyright © 2015 Accenture All rights reserved. 8
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
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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
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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
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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
Copyright © 2015 Accenture All rights reserved. 15
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
Copyright © 2015 Accenture All rights reserved. 16
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
Option 0 – IT Centric
Option 1 – Dedicated Function
Option 2 – Cyber Czar
Option 3 – Risk Led
Copyright © 2015 Accenture All rights reserved. 17
Operating Model Analysis Each option should consider the tradeoffs with the firm’s ability to Prevent and Detect Threats.
Ability to Prevent and Detect Threats Low
High
High
Valu
e to
Cus
tom
er
Option 0 – IT Centric
Option 1 – Dedicated FunctionOption 2 – Cyber Czar
Option 3 – Risk Led
Copyright © 2015 Accenture All rights reserved. 18
Operating Model Analysis Each option should consider the tradeoffs with the firm’s ability to Prevent and Detect Threats.
Ability to Prevent and Detect Threats Low
High
High
Spe
ed to
Exe
cute
Option 0 – IT Centric
Option 1 – Dedicated Function
Option 2 – Cyber Czar
Option 3 – Risk Led
Priority #5 – Resilience
Copyright © 2015 Accenture All rights reserved. 20
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?
Copyright © 2015 Accenture All rights reserved. 21
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
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 358,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com
Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
Rights to trademarks referenced herein, other than Accenture trademarks, belong to their respective owners. We disclaim proprietary interest in the marks and names of others.
Learn more about cyber risk and resilience:www.accenture.com/CyberRisk
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