When reading news and statistics about Cyber Security incidents, it is easy for executives to become immune to the information overload. We have all seen the headlines such as "Billions of dollars in losses" However, how those incidents may affect your specifc organisation is often unclear.
What is clear, is that Cyber Security incidents can affect all organisations; from the large hedge fund administrator to small businesses with few employees. Caribbean nations are not immune and incidents are happening at a startling rate.
Cyber Security has become an executive level issue. Gone are the days when the responsibility lay solely with Information Systems personnel or on the third party IT firm. Customers, business partners and investors are asking management tough questions and seeking comfort that their data is secure. Will you be able to answer those questions the next time a customer or shareholder asks?
THE GAP AT THE TOP
In the spring of 2017, KPMG offices in 28 countries (mainly in Europe and the Caribbean) conducted a survey of over 800 annual reports of publicly traded companies. The goal of the survey was to evaluate the presence of Cyber Security information within the annual reports.
The overall results, especially in the Caribbean, were quite disappointing. Across the organisations surveyed within the Caribbean, only 11% of them had any mention of Cyber Security in their annual reports. In the Cayman Islands, the result was sadly 0%. Does this mean that organisations in the Caribbean and in the Cayman Islands pay no attention to Cyber Security? Of course not! However, it shows that management does not seem to make securing confidential data a priority. One must remember that Cyber Security budgets and staffing levels start with senior management.
One thing that will get management's attention is regulators. In 2016, the Cayman Islands Monetary Authority (CIMA), issued a Cyber Security circular.
CIMA stated that they will be performing reviews of licensees' approaches to data security. More specifically, they said that "...the Authority will also consider licensees' ability to protect the Confidentiality, Integrity and Availability of sensitive customer and other information."
In a nutshell, these principles ensure that data is protected from unauthorised use (confidentiality); is complete and accurate (integrity); and available for use and processing (availability).
Have you told your technology personnel that these elements are critical and that any regulatory inspection must be passed with flying colors? Although CIMA Cyber Security inspections will only affect Cayman Islands entities, readers should expect other regulators to follow this global trend, which was initiated by the United States Securities and Exchange Commission (SEC) in 2014. Organisations with European Union (EU) operations also need to be ready for the General Data Protection Regulation (GDPR), which becomes enforceable in 2018. Fines for non-compliance to GDPR are nothing short of breathtaking.
EMPLOYEES ARE A KEY PART OF YOUR DEFENSES
As part of any Cyber Security programme, Employee Awareness training is an essential component. Employees need to be trained to recognise, and more importantly to thwart some of the most common Cyber-attacks. Cyber-attacks are often enabled by ill-informed employees who unbeknownst to them, facilitate the compromise of critical data. For example, in a 2016 study, researchers at the University of Illinois dropped 297 USB sticks around campus; 48% of the devices were inserted into a computer by individuals who were unaware of the risks.
Had this been a targeted attack against a company, the hacker would have likely succeeded in achieving the goal, which may have been to infect the systems with a Ransomware or to gain access to systems. Employee IT Security Awareness training has become a key component of Cyber Security.
It takes many different forms; classroom or online training, periodic educational communications, etc. Further, simulated phishing attacks, where employees receive a suspicious (yet harmless) email, is often an eye opening exercise for management when the results are obtained as to the number of employees who fell for the ruse.
DO YOU WIRE TRANSFER?
In the last few months, we have witnessed a flurry of attacks which resulted in fraudulent wire transfers being sent; the consequences were obviously devastating since they generally involved large sums. The main vulnerability needed for this type of scam to be successful is weak or inefficient control mechanisms. Typical deficiencies are: accepting client wire requests via email; accepting management approvals for wire transfers via email; lack of validation of wire instructions and accounts; and lack of segregation of duties and/or dual approval mechanisms. If your organisation processes any kind of bank transfers, I highly recommend that the entire process be reviewed as soon as possible.
COVER THE BASICS
Once the employees are trained, technology remains a critical component of your organisation's defenses. Assuming basic network protection has been implemented, one area where organisations have failed a lot recently is with system updates. Case in point: the May 2017 WannaCry global Ransomware attack to which thousands of organisations fell victim.
All of them neglected to update (patch) a Microsoft Windows vulnerability. Sadly, the update had been available for a full month before the attack, thus the attack was preventable. Further, organisations should have their systems tested periodically; both inside and outside networks, so any weakness can be detected before an attacker finds them.
THE BOTTOM LINE
With major hacking incidents and data breaches being reported almost weekly, organisations and their executives need to ensure they are prepared for the onslaught of attacks affecting organisations large and small. Also, executives need to understand that a failure to properly address regulatory requirements may result in fines as well as publically available records indicating lax Cyber Security. Simply relying on the traditional controls such as a firewall is no longer sufficient. Companies should regularly test their internal and external networks for vulnerabilities and ensure proper updates are applied. Employee Awareness training is a key element of data protection – employees play a vital part in protecting your confidential data.
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.