Blog: Credit Union

Cybersecurity budgets for financial institutions are continuing to increase in an effort to keep pace with advances in technology. CoNetrix conducted a survey to gain insights into cybersecurity and how institutions are using their funds to support their cybersecurity program. 

Cybersecurity Budget for Financial Institutions

Here is some of the information you will find in the report concerning IT and Cybersecurity budgets for financial institutions.

  • 52% of all respondents indicated their IT budget for 2019 will exceed the allotted amount for 2018.
  • 31% reported they will neither increase nor decrease their IT budget for 2019.
  • Institutions with a larger asset size are more likely to increase their IT budget in 2019.
  • 52% of respondents reported they plan to increase Network Infrastructure making it one of the top priorities in 2019.
  • 41% of financial institutions will be increasing their cybersecurity budget in 2019.
  • 44% will maintain the same cybersecurity budget.
  • Institutions with higher confidence in their Board's understanding of cybersecurity posture results in a higher likelihood the budget will increase.
  • 66% of institutions have a shared budget with IT with no designated line item for cybersecurity.
  • 19% have a shared budget with IT with a designated line item for cybersecurity.

Find out more about how institutions are managing their IT and Cybersecurity budget by downloading our report on The State of Cybersecurity in the Financial Institution Industry. https://conetrix.com/cyber-report


 

In 2018, the NCUA began piloting the use of the Automated Cybersecurity Examination Tool (ACET) based on the FFIEC's Cybersecurity Assessment Tool (CAT) to review credit unions.  While the ACET mirrors the CAT in content, ACET provides additional features and details to help credit unions and the NCUA examine and benchmark the industry's cybersecurity preparedness. 

What are the additional features of the ACET as compared to CAT?  Let's take a look…

ACET is a spreadsheet

While the FFIEC Cybersecurity Assessment Tool (CAT) was called a tool, it was released in the form of a PDF download.  This forced financial institutions to complete the tool manually on paper, to develop their own mechanism to electronically complete the assessment, or to use third-party software such as Tandem to complete the assessment.  The ACET was released by the NCUA as a spreadsheet, partly, to provide credit unions a functional option for completing the CAT.

ACET includes a dashboard

The first sheet in the ACET spreadsheet is a dashboard.  The dashboard provides summary information of the credit union, a completion status for the inherent risk profile and cybersecurity maturity, and inherent risk levels.  The dashboard is helpful to let the credit union and their examiner see the completion status of the assessment. 

ACET has an Admin sheet for NCUA examination use

ACET was primarily designed to be used during NCUA examinations; therefore, the NCUA included an Admin sheet to be used by NCUA examiners.  This sheet is primarily used to calculate and track review hours used during the examination process.

ACET contains a document request list

Since ACET is used as an examination tool, or work program, a document request list was added.  The current version (v032618) of the ACET does not have a hyperlink from each document request to any inherent risk questions or maturity statements. However, validation text added to these statements, in many cases, does reference back to the requested items.

ACET adds validation text to inherent risk statements

Answers to the inherent risk profile statements help institutions determine their overall cybersecurity inherent risk.  ACET expanded these statements to include "Validation Approaches" for each inherent risk statement.  The validation approaches language describes what an institution or examiner should review to answer, or validate the answer to, an inherent risk statement.  In many cases, these validation approaches reference back to documents you can review from the document request list.

ACET summarizes maturity in a Maturity Details sheet

The ACET includes a sheet called "Mat. Details." This table provides a summary of the institution's maturity.  Percentages of "Yes" answers are displayed by Component for each maturity level.  This view provides a snapshot of the intuition's cybersecurity maturity across all of the Components.

ACET provides additional reporting fields for declarative statements

The ACET includes additional columns to help institutions document evidence or additional information related to each cybersecurity maturity declarative statement in the "Domain" sheets.  The first additional column, Comment [Required for Yes(c)], was added for credit unions to have a place to explain the "Yes with compensating controls" answer. Two additional columns, Reviewed and Suggested Edits, were added to help examiners when reviewing the ACET.

ACET incorporates a guide with additional commentary and mappings

The ACET includes a sheet named "Guide" with additional commentary and mappings to help an institution or examiner understand and answer the cybersecurity maturity declarative statements.  The additional columns include:

  • Comment: commentary with additional details describing what is expected from the declarative statement and what value the control has on cybersecurity.
  • Examination Approaches: describes what an institution or examiner should review to answer or validate the answer to a declarative statement.
  • Baseline Mapping: mapping declarative statements to the FFIEC IT Examination Handbooks. These are the same mappings in the CAT Appendix A.
  • NIST Mapping: mapping declarative statements to NIST.

ACET and Tandem

When the FFIEC Cybersecurity Assessment Tool (CAT) was first released, Tandem developed an application to aid in its use. Now Tandem has updated the tool to include the additional ACET features and to allow Credit Unions to complete the assessment through Tandem and download the results in the ACET spreadsheet format.  The Tandem SaaS comes in both a free and paid version.  Join more than 1,000 other financial institutions and sign up for the free Tandem Cybersecurity Assessment Tool today by visiting conetrix.com/tandem/cybersecurity-assessment-tool-ffiec.


 

By: (CISA, CISSP)

Early this year the tech world was rocked with the announcement of two unprecedented vulnerabilities named Meltdown and Spectre.

These two vulnerabilities are a big deal because they are hardware vulnerabilities affecting any device with a silicon chip. This includes microprocessors on workstations and servers, mobile phones, tablets, cloud services, and other platforms.

Understandably there was a rush from three main industries, processor companies, operating system companies, and cloud providers to provide solutions. However, as a result of the urgent response, there were unanticipated update incompatibilities which crashed systems. This created a dilemma for IT professionals. "Do we install updates which may cause our systems to crash?" or "Do we sit-tight and remain vulnerable?"

Even in the weeks of uncertainty, there were calm voices of seasoned reasoning. Their message reminded us that basic security standards remain our first line of defense. No matter how bad an exploit may be, its impact can be limited if:

  • The vulnerability doesn't have access to your systems
  • Operating system or application weaknesses are patched
  • Security software is installed (advanced end-point protection software with artificial intelligence is a game changer)

So how do you do achieve these standards? Here are some fundamental best practices:

  1. Monitor availability of operating system and application updates. Be sure you find and establish good sources to inform you about the patches and updates for your systems and applications. Then, monitor the sources or subscribe to notifications.

  2. Test updates to ensure compatibility. It is best if your update and patching process includes a test environment where non-production systems are updated first in order to test functionality and compatibility. This allows you to postpone or avoid updates which might crash systems or applications.

  3. Apply updates and patches on a regular schedule. As a best practice, you should implement a schedule (at least monthly) to evaluate, test and install updates for systems and critical applications. In this way, your schedule can coincide with schedules of operating system and application vendors (e.g., Microsoft has "Patch Tuesday, the second Tuesday of each month).

  4. Install and maintain security software (e.g., antivirus software, endpoint security software, etc.). If possible, explore and utilize behavior based end-point protection software. This genre of software "watches" system behavior to notice and stop suspicious action.

  5. Prevent malicious code execution. The goal is to keep malicious code out of your network and systems. This is best accomplished with layers of security including Internet filtering, phishing detection, and security awareness training for system users. Security awareness is essential to help prevent users from falling prey to malicious emails.

 

By: (Security+)

Ideally, reviewing a SOC Report will take you 15 minutes or less (once you get the hang of it). If you are a financial institution and you have vendors, then you have plenty of SOC Reports to review every year.

This blog will tell you what to review in SOC Reports, and nothing more.

You Don't Have to Know It All

I could tell you all sorts of information about SSAE 18 and SOC Reports! Here's one: SSAE 18 is the rule book and SOC is the engagement and report name, so you don't get a SSAE 18 from your vendor, you get a SOC Report. But what you actually want/need is a quick way to get your job done, not a dissertation on the inner working of SOC audits.

Other people may try to make the SOC Report review process seem big and complex so that you will rely on them to do the reviews for you… Don't let them scare you. You are capable of reviewing a SOC Report just as well as any expert. Really! I believe in you.

Admittedly, SOC Reports are complex and they are full of important information, but finding the information you need from it is really quite simple.

You Just Need the Important Parts

Think about this: If your vendor has a SOC Report, then that means an outside party has reviewed the vendor on your behalf. The outside party has verified the vendor is operating effectively. Thanks to this outside party, you don't have to comb over every detail of a SOC report. This means you can primarily read the cliff-notes version in the "Auditor's Report" section and trust the outside party's judgment.

SOC reports are completely standardized. They share a basic structure and even include some of the exact same sentences. This means you can grab what you need from a few specific places, then be on your way.

Let's Get To It

Here is a quick list of the information you need to find in a vendor's SOC report and note in your review. Section names won't be exact, but they're pretty close.

Look at the Cover Page to compile a profile for this SOC report. Find the company being reviewed, the auditing firm, SOC #, and Type #.

Look at the Scope subsection of the Auditor's Report section to find when the audit was done.

Now, this is one of the two most important parts of your review, so focus with me here. Look at the Scope subsection of the Auditor's Report section to see if complementary user entity controls are employed. If so, go to the Description of Systems section to find all of the details about the complementary user entity controls. And obviously, make sure you are doing those things.

Look at the Scope subsection of the Auditor's Report section to see if subservice provider controls are employed. If so, go to the Description of Systems section to find out what the vendor is doing to monitor the subservice provider controls.

Look at the Limitations subsection of the Auditor's Report section to see if anything happened during the audit that limited the auditor's ability to check everything.

This is the other of the two most important parts of your review. Look at the Opinion subsection of the Auditor's Report section to see if the auditor found anything problematic. Also note their official "opinion." If the auditor noted significant issues, find the Other section. Management should provide some kind of response to the significant issues found.

If this was a Type 2 engagement, look at the Test Results section to find any and all exceptions encountered during testing. This may include some that were not considered significant enough for the auditor to mention in the Opinion subsection.

And that's it. While it's pretty simple, why not make it easier? We created a downloadable PDF with the above checklist so that you can easily and efficiently review your SOC reports.


 

In September 2016, the Federal Financial Institutions Examination Council (FFIEC) released an updated Information Security Booklet as part of the IT Examination Handbook. Among other contemporary concepts, the FFIEC placed an increased emphasis on the role of Information Security Officers (ISOs) in financial institutions. In section I.B Responsibility and Accountability (Page 5), the FFIEC provides a list of six key qualities of the ISO role. Here are the six qualities and a brief interpretation of how this can be applied in your organization.

1. Sufficient Authority

Each ISO should have sufficient authority to perform their assigned tasks. While the ISO ultimately reports to the board or senior management, they must also be a trusted employee (or group of employees) who is authorized to make organization-altering decisions on their own. In short, your ISO should be someone you can, and will, trust.

2. Stature within the Organization

Each ISO should have stature within the organization to perform their assigned tasks. In addition to being a trustworthy part of the organization, the ISO should also be a respected part of the organization. The role of the ISO is a position that should be held with esteem. This is a tone that is set from the top. If the board and senior management respect the role of the ISO, the organization's employees will respect it, as well.

3. Knowledge

Each ISO should have knowledge to perform their assigned tasks. The ISO is tasked with oversight of the information security program. This is a broad-scoped topic which requires knowledge of the physical, technical, and administrative functions of the organization. If no one employee has sufficient knowledge to make decisions for each of these areas, it may be wise to consider appointing multiple individuals to fill the organization's ISO role as a committee.

Click here to find out more about a 6 part webinar training series created specifically for ISOs.

4. Background

Each ISO should have background to perform their assigned tasks. Similar to knowledge, the ISO should have a history that involves information security. An employee can be trustworthy, respectable, and have knowledge of information security, but be lacking a foundation of experience. Information security is an ever-changing field. Appointing an ISO who does not have experience in the field is a risk to the organization's information security.

5. Training

Each ISO should have continued training to perform their assigned tasks. Since the field is ever-changing, it should not be assumed that the ISO has all the training required to perform their duty. As the threat environment changes, as new controls are implemented, as the industry advances, the board and senior management should expect the ISO or members of the ISO team to further their education through training.

6. Independence

Each ISO should have independence to perform their assigned tasks. It would be best to avoid conflicts of interest when selecting an ISO. For example, while knowledge of information technology (IT) is important, the ISO should not be the person responsible for implementing the organization's IT function. For community financial institutions, this is not always practical. So, if your organization finds independence difficult, it may be beneficial to appoint individuals from various departments to fill the organization's ISO role as a committee.

In Summary…

While the FFIEC may not be very prescriptive when it comes to appointing an ISO, by ensuring your organization's ISO is trustworthy, respectable, knowledgeable, experienced, interested in learning, and independent of other functions in the organization, your organization can lay the foundation for an effective information security program.


 

Yesterday, during a webinar titled "Cybersecurity - The Basics", the NCUA provided information on a new Fraud and Cyber Security Initiative grant of up to $7,500 for low-income designated (LID) credit unions.[more] The grant, which must be applied for by June 30, 2015, is designed to help LID credit unions with building and enhancing cyber security to help protect member information.

In order to assist credit unions with their information and cyber security needs, CoNetrix has created a webpage with information about the grant, including a few bundled offerings centered on cyber security.  Additionally, CoNetrix is sponsoring several free webinars to educate about the grant and our offerings.  You can register for the webinars and learn more at www.conetrix.com/ncuagrant/  


 

This month, the New York State Department of Financial Services ("the Department") released results from a survey conducted in 2013 on cyber security.  154 institutions completed the survey, representing 60 community and regional banks, 12 credit unions, and 82 foreign branches and agencies.  The survey asked questions regarding information security framework; corporate governance around cyber security; use and frequency of penetration testing and results; budget and costs associated with cyber security; the frequency, nature, cost of, and response to cyber security breaches; and future plans on cyber security. [more]

In conclusion, the Department states:

"As part of its continuing efforts in this area, the Department plans to expand its IT examination procedures to focus more fully on cyber security.  The revised examination procedures will include additional questions in the areas of IT management and governance, incident response and event management, access controls, network security, vendor management, and disaster recovery.  The revised procedures are intended to take a holistic view of an institution's cyber readiness and will be tailored to reflect each institution's unique risk profile.  The Department believes this approach will foster smarter, stronger cyber security programs that reflect the diversity of New York's financial services industry."

This report comes on the hills of the FFIEC webinar, Executive Leadership of Cybersecurity: What Today's CEO Needs to Know About the Threats They Don't See in which the FFIEC introduced expectations of new examination procedures.

To read the full Report on Cyber Security in the Banking Sector by the New York State Department of Financial Services can be found here - http://www.dfs.ny.gov/about/press2014/pr140505_cyber_security.pdf