How the Financial Services Industry Is Preparing to Avoid and Respond to Systemic Cyberattacks

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Recently, leading up to a major U.S. holiday, cybercriminals targeted a number of payment and credit card companies. These companies received notice that if they didn’t each pay a ransom in bitcoin, a cyberattack would be launched against the payment industry on the holiday, which happens to be a major shopping day. Financial services players and law enforcement soon massed to respond to this systemic cyberattack on the industry.

In the Financial Services Industry, a Data Breach Is Everyone’s Problem

Until recently, financial services firms focused almost entirely on preventing data breaches that would impact their own organizations. They sought to detect security risks such as phishing emails, malware, stolen databases and remote access to networks, and to stop them before the boom — the moment a cyberattack is discovered. But more and more, financial services and other industries are starting to recognize that it’s not a matter of if they’ll be breached, but when. In light of this realization, the sector’s efforts must shift to response, not simply detection and prevention, and acknowledge that these attacks run the risk of becoming systemic in nature, impacting the entire financial services industry.

Left and Right of the Boom in Incident Response

Given the interconnectedness that has developed within financial services, no one company can operate in a vacuum, either to prevent an attack or to respond to one. If there’s a breach within a bank, for example, that incident will soon extend to ATM networks, payment providers, clearing and settlement entities, and third-party services. The financial services industry is preparing for the likelihood of a systemic cyberattack and coming together in an effort to create runbooks that define the parameters of a coordinated response.

Industry Leaders Battle-Test Their Incident Response

This change has prompted competitors to collaborate for the good of the financial services industry. In October 2018, for example, the companies of the P20 Cyber Working Group and Board visited the IBM X-Force Command Cyber Range in Cambridge, Massachusetts, for a “war game” exercise. The global electronic payments industry, along with law enforcement and U.S. Department of Treasury representatives, came together for a cyberattack response challenge based on the aforementioned holiday scenario. Traditional cyberthreat preparedness focuses on evaluating technology controls and the completeness of incident response plans. However, a cyber war game exercise provides an opportunity to model attacks and practice response and resilience in a controlled environment.

The objective for phase one of the exercise was to test incident response communications, decision-making effectiveness and stakeholder notification during a data breach. This resulted in a strengths, weaknesses, opportunities and threats (SWOT) analysis that showed more weaknesses than strengths.

On the plus side, there was good organizational coordination among leadership and cross-functional teams. That said, it was clear that the industry still lacks a common taxonomy around crisis management, including what even constitutes a crisis. No processes or liaisons were in place for engaging government or law enforcement. Most chief information security officers (CISOs) lacked media training, and therefore didn’t know who to contact or what to communicate in media statements. Challenges were rife in detection, investigation and response. Finally, there was no commander’s intent to direct what a successful outcome would look like.

Commander’s Intent Is Crucial to a Systemic Response Plan

In many ways, a cyberattack is similar to a military attack, according to Lieutenant Colonel Hise Gibson, a visiting scholar at Harvard Business School. Gibson specializes in applying the lessons learned on the battlefield to cyberattacks in the business world. When command is decentralized — whether in military coalitions or financial services firms — building cohesive teams depends on mutual trust.

The team must create a shared understanding that results in a clear commander’s intent, or a “description and definition of what a successful mission will look like,” according to Harvard Business Review. In a business context, CEO intent empowers subordinates and guides initiative and improvisation in the event of a chaotic event, such as a cyber crisis.

Phase two of the war game exercise involved creating a customized, high-fidelity incident response simulation for the financial services industry. The simulation enabled participants to work together to develop an iterative playbook to respond to incidents, which requires a framework for partner and peer collaboration and data sharing.

A consistent “break-the-glass” response plan depends on individuals being empowered to act. Rather than ask for funds, the leader must be allowed to spend what’s needed; rather than worrying about stepping on toes, he or she must be empowered to make customers whole. Meanwhile, the team must practice the response plan until it becomes as natural as muscle memory.

Create a Workflow That Enables Incident Response Orchestration

In phase three of the exercise, the financial services industry participants will create a workflow that details response to a systemic cyberattack. Intelligent orchestration will support a guided response to complex attacks with agile playbooks that can adapt to incident details in real time and lay out roles, responsibilities and deadlines. This preparation will ultimately enable financial services firms to effectively contain incidents and prevent a domino effect that brings down the industry.

Financial services firms must continue to collaborate with their industry peers, create industry response exercises and runbooks, and rigorously test their plans at facilities such as the IBM X-Force Command Center. Learn more about the IBM X-Force Command Center and how companies are working to prepare for their worst day.

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