Canada: Cyber Security: OSFI Issues Self-Assessment Questionnaire

Last Updated: November 1 2013
Article by Bernice Karn and Miho Felicio

For financial and sometimes political reasons financial institutions are appealing targets for cyber attackers. Earlier this year TD Canada Trust was hit by a cyber attack1 whereby one or more hackers used a brute force "denial of service" attack to disable the bank's website and mobile application. This attack was reminiscent of the September 2012 attack in the U.S.2 in which the websites of Bank of America, JPMorgan Chase, Wells Fargo, U.S. Bank and PNC Bank were all subject to similar attacks that slowed down website operations and caused many bank sites to be inoperative for a significant portion of their customers. Mindful of this very real threat and the need to manage risk, on October 28, 2013, the Office of the Superintendent of Financial Institutions ("OSFI") released a memorandum to federally regulated financial institutions ("FRFIs") discussing the measures that FRFIs should be taking to prevent, manage and remediate cyber attacks. The memorandum states that cyber security is growing in importance because: (i) FRFIs increasingly rely on technology; (ii) the financial sector is interconnected; and (iii) FRFIs play a critical role in our economy.

While OSFI does not plan to issue any official guidance for controlling or managing cyber security risks at present, OSFI is aware that this is an issue with which many FRFIs are grappling and is offering a self-assessment template in the memorandum that FRFIs can follow in order to control and manage their cyber security risks.

The template is divided into the following six major areas covering 89 recommendations:

  • Organization and Resources
  • Cyber Risk and Control Assessment
  • Situational Awareness
  • Threat and Vulnerability Risk Management
  • Cyber Security Incident Management
  • Cyber Security Governance

The OSFI memorandum lists prudent best practices for how to prevent, manage and remediate cyber attacks. However, its application will pose challenges for FRFIs. For example, the memorandum suggests that the threats of cyber attacks should be managed on an enterprise-wide basis. While a laudable goal, as a practical matter, implementation of all of the recommendations for all systems in a large FRFI may pose a costly challenge, especially for an enterprise that relies on legacy systems.

Cost issues of enterprise-wide compliance aside, the memorandum encourages FRFIs to look at the current state of their cyber security policies and practices to ensure that they remain appropriate and effective in light of changing circumstances and risks. Taken at face value this could mean that FRFIs must ensure that its cyber security programs are always on the leading edge of technology, which is expensive, not always effective and is sometimes merely reactive to attacks. To use an example from the payment card industry, in 2008 Hannaford Grocery in the U.S. suffered a data breach in which 4.2 million credit and debit card numbers were stolen over three months, even though Hannaford was apparently in compliance with the industry-standard Payment Card Industry Data Security Standard3. Notwithstanding this compliance, the hackers were able to gain access to the valuable credit card data. Therefore, following best practices is not always a guarantee that attacks can be prevented.

While threats from cyber criminals might be headline grabbers, the reality is that most data breaches are not actually due to external hacks. In a recent study4 on the cost of data breaches by the Ponemon Institute, 64% of data breach incidents surveyed were caused either by human error or system glitches. Although the OSFI memorandum refers to automatic deployment of security patches and updates and cyber security training for employees, it does seem to be focused on external threats rather than problems that emanate from within the organization due to ignorance or sloppy procedures. Therefore, one wonders how effective the recommended measures will be in safeguarding customer data.

OSFI's memorandum will also have a ripple effect on other operational areas of FRFIs beyond strictly information technology. For example:

  • Enhanced background and security checks are recommended for "cyber security specialists", which will have ramifications from a human resources perspective in respect of those employees who are resistant to permit enhanced screening; 
  • FRFIs are encouraged to implement tools to prevent unauthorized data from leaving the enterprise. This will have implications for employee surveillance and privacy rights in the workplace; 
  • FRFIs will need to re-examine material outsourcing arrangements within the scope of OSFI Guideline B-10 to ensure that the outsourced services provider(s) are taking the appropriate steps to mitigate cyber risk. Material outsourced service providers may be primarily providing technology solutions or technology may be incidental to the service offered. In either case, the new OSFI memorandum may require that the parties renegotiate the terms of the outsourcing deal;  
  • FRFIs will also have to look beyond their material outsourcing agreements to manage cyber risk. Even contracts with critical IT service providers are to be assessed to determine what measures are necessary to mitigate the risks arising from the products and services purchased from those service providers. In "Software as a Service" contracts (which OSFI has pointed out in previous correspondence could constitute material outsourcings)5, FRFIs will need to revisit those contracts to determine whether or not the promised measures against cyber attacks are sufficient; and 
  • Cyber security awareness and information are to be provided to customers and clients, presumably as part of a larger communication strategy to stakeholders, which is also recommended. These requirements will need to be addressed by the public relations and marketing specialists at FRFIs.

These are just a few of the issues that FRFIs will need to consider when implementing the 89 points in OSFI's memorandum. While the memorandum does not constitute official "guidance", we may well expect guidance at some point in the future as FRFIs deal with these recommendations and respond to them when undergoing OSFI audits. We will continue to monitor this situation and advise as new developments arise.


1"TD hit by DDoS attack", IT World Canada (21 March 2013) online: IT World Canada>.

2 Nicole Perlroth, "Attacks on 6 banks frustrate customers", The New York Times (30 September 2012) online: The New York Times>.

3 Linda Tucci, "PCI Compliance a Good Start, but Not Enough" in PCI DSS Compliance Overview and Best Practices, online:

4 Ponemon Institute LLC, 2013 Cost of Data Breach Study: Global Analysis (Traverse City, MI: Ponemon Institute LLC, May 2013) online: Symantec>.

5 Memorandum from Mark Zelmer, Assistant Superintendent, Regulation Sector, Office of the Superintendent of Financial Institutions Canada, to Federally Regulated Financial Institutions re: "New Technology-based Outsourcing Arrangements" (29 February 2012) , online: Office of the Superintendent of Financial Institutions Canada <>.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Bernice Karn
Miho Felicio
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.