Cyber-Security: Proactively managing the cyber threat landscape

Transcription

1 Cyber-Security: Proactively managing the cyber threat landscape

2 Agenda Understanding the cyber threat landscape Building a resilient Cyber Risk capability An Internal Audit approach Closing thoughts

3 Understanding the cyber threat landscape

4 The evolving threat landscape Lilly scientists stole $55 million in trade secrets 1 Indianapolis Business Journal, October 8, 2013 Last year, over 800 million records were breached globally, up from 250 million in 2012 The Economist, July 2014 Target missed signs of a data breach (40 million credit card numbers compromised) 2 NY Times, March 13, 2014 On a scale of 1 to 10 American preparedness for a large-scale cyber attack is around a 3 3 Why? NY Times, July 2012 $55 million 800 million 40 million 3 Changing regulatory environment Regulatory changes continue to absorb resources and attention. Technology innovations that drive business growth also create cyber risk. New technology-enabled business models create new opportunities for malicious actors to exploit and higher likelihood of accidental vulnerabilities. Corporate change & innovation Evolving threat environment Cyber threats are asymmetrical risks. Cyber crime grows in sophistication, and attacks increase in speed and number, while time to respond decreases. Targeted attacks on operations, brand, and competitive advantage are more impactful than ever

5 Cyber risk High on the agenda Audit committees and board members are seeing cybersecurity as a top risk, underscored by recent headlines and increased government and regulatory focus Recent U.S. Securities and Exchange Commission (SEC) guidance regarding disclosure obligations relating to cybersecurity risks and incidents.. Registrants should address cybersecurity risks and cyber incidents in their Management s Discussion and Analysis of Financial Condition and Results of Operations (MD&A), Risk Factors, Description of Business, Legal Proceedings and Financial Statement Disclosures. SEC Division of Corporate Finance Disclosure Guidance: Topic No. 2 Cybersecurity Ever-growing concerns about cyber-attacks affecting the nation s critical infrastructure prompted the signing of the Executive Order (EO) 13636, Improving Critical Infrastructure Cybersecurity. The Executive Order highlights the focus on an improved cybersecurity framework and the rapid changes of regulatory agency expectations and oversight One of the foundational drivers behind the update and release of the 2013 COSO Framework was the need to address how organizations use and rely on evolving technology for internal control purposes 5

6 Cyber risk (cont d) Roles and responsibilities Effective risk management is the product of multiple layers of risk defense. Internal Audit should support the board s need to understand the effectiveness of cybersecurity controls. Roles and responsibilities 1 st Line of defense business and IT functions Incorporate risk-informed decision making into day-to-day operations and fully integrate risk management into operational processes Define risk appetite and escalate risks outside of tolerance Mitigate risks, as appropriate 2 nd Line of defense information and technology risk management function Establish governance and oversight Set risk baselines, policies, and standards Implement tools and processes Monitor and call for action, as appropriate Provide oversight, consultation, checks and balances, and enterprise-level policies and standards 3 rd Line of defense internal audit Independently review program effectiveness Provide confirmation to the board on risk management effectiveness Meet requirements of SEC disclosure obligations focused on cybersecurity risks Given recent high profile cyber attacks and data losses, and the SEC s and other regulators expectations, it is critical for Internal Audit to understand cyber risks and be prepared to address the questions and concerns expressed by the audit committee and the board 6

7 What are we seeing? 1 Attack vector shifting from technology to people. 2 Attack patterns are increasingly starting to look like normal behavior. Threats are increasingly hiding in plain sight. Some of the threats are adaptive and have the ability to go into dormant mode, making them difficult to detect. 3 Criminals, state actors and even Hactivists are building better intelligence, capability and have a wider network of resources than organizations (i.e., wideningcapability gap). 4 Supply chain and business partner poisoning or lateral entry are on the rise. 5 Advanced Threat Adversaries' Calling Card defy traditional signature-based approaches. 7

8 Incident patterns of incidents can be described by just nine basic patterns Card skimmers Cyber-espionage Physical theft/loss Point-of-sale intrusions Miscellaneous errors Web application attacks Everything else Insider misuse Crimeware Denial of service attacks of incidents in an industry can be described by just three of the nine patterns 8

9 It starts by understanding your organizational risk appetite Who might attack? What are they after and what key business risks must we mitigate? What tactics might they use? Cyber criminals Hactivists (agenda driven) Nation states Malicious insiders Rogue suppliers Competitors Skilled individual hacker Sensitive data Financial fraud (e.g., wire transfer, payments) Business disruption (building systems, etc.) Threats to health & safety Spear phishing, drive by download, etc. Software or hardware vulnerabilities Third party compromise Stolen credentials Control systems compromise Ultimately cyber is about brand and reputation with your tenants and investors 9

10 Cyber Crime Who Did it? Espionage What Did they see & take? Warfare When Do we fight back? Terrorism Why Did they do it? Security How Do we prevent it (again)? What is the actual threat? 10

11 New technologies, new threats What How Reconnaissance Gain intelligence and identify vulnerabilities Research the internet, call call-centers, trawl social media etc. Attack Target identified vulnerabilities Targeted attacks, unsuspecting downloads from malicious or compromised websites, exploit application or infrastructure software vulnerabilities etc. Exploit Gain broad deep access Escalate privileges, gain increased access, observe/control network or servers, increase sophistication of attacks, hide tracks, etc. Your business Strategic assets, financial assets, data & intelligence Fulfill objective Steal/damage/disrupt Encrypt then exfiltrate data being stolen, stay hidden for long periods of time, erase digital footprint Vulnerability Target 11

12 Speed of attack is accelerating Initial attack to initial compromise takes place within minutes (almost 3 of 4 cases) 72% 59% Containment (post-discovery) requires weeks or longer Data leaks occur within minutes (nearly half) 46% 72% Discovery takes weeks or longer Time is of the essence 12

13 Case study JP Morgan Chase & Co. News agencies report of FBI investigating the bank JP maintains the statement isn t seeing any unusual fraud activity JP reports to US- SEC, reveals details of cyberattack State attorneys seek information from JP about the breach JP learns of attack, closes all network access path JP says it isn't seeing unusual fraud Victim timeline Mid-June Mid-August Aug 27 Aug 28 Sept 11 Oct 2 Jan 08 Attacker timeline Attackers gain access to JP servers steals Personal information * 13

14 Building a resilient Cyber Risk capability 14

15 Build a resilient cyber security organization This means having the agility to prevent, detect and respond quickly and effectively, not just to incidents, but also to the consequences of the incidents Secure Vigilant Resilient Are controls in place to guard against known and emerging threats? Can we detect malicious or unauthorized activity, including the unknown? Can we act and recover quickly to minimize impact? Cyber governance Cyber threat intelligence Cyber threat mitigation Cyber incident response 15

16 Changes in threat landscape versus capability Cat A SIEM (Near real time analysis) Cat B Behavioral analysis and machine learning (mid term analysis) Cat C Cyber analytics (long term analysis) Signature based (e.g., correlation) Behavioral analysis and machine learning model Risk analytics (including BDSA) Conventional warfare Conventional (Conventional warfare, symmetric vectors) Guerilla (Hide among civilians (hide in plain sight)) Espionage (Seek, analyze and exfiltrate) Cyber warfare Infrastructure threats (Retail threats, open toolkits, general Botnet, Distributed denial of service) Targeted attacks (Hide within business traffic)) Cyber-espionage (Seek, analyze and exfiltrate) System 1 learning System 2 learning Effective Marginally effective In-effective 16

17 Building your defenses Options Insource Outsource Co-source 17

18 Operating model Benefits and challenges Insource Outsource Co-source Industry and business alignment Level one monitoring and management Industry and risk profile alignment Level one, two and three monitoring and management Business, industry and risk profile alignment Level one, two and three monitoring and management Maintain and enhance existing use cases Alignment of use cases to evolving threat landscape Alignment of use cases to evolving threat landscape Limited threat intelligence gathering Proactive cyber threat intelligence Proactive cyber threat intelligence Resourcing required to operate three shifts Round the clock monitoring, management and incident response Round the clock monitoring, management and incident response Hardware, build, run and maintain costs Cloud based service utility based costing Hardware, build, run and maintain costs Capex Opex Capex and Opex 18

19 An internal audit approach 19

20 Cyber risk Deloitte cybersecurity framework* An assessment of the organization s cybersecurity should evaluate specific capabilities across multiple domains Cybersecurity risk and compliance management Secure development life cycle Security program and talent management Secure Compliance monitoring Issue and corrective action planning Regulatory and exam management Risk and compliance assessment and mgmt. Integrated requirements and control framework Third-party management Secure build and testing Secure coding guidelines Application role design/access Security design/architecture Security/risk requirements Information and asset management Security direction and strategy Security budget and finance management Policy and standards management Exception management Talent strategy Identity and access management Evaluation and selection Contract and service initiation Ongoing monitoring Service termination Information and asset classification and inventory Information records management Physical and environment security controls Physical media handling Account provisioning Privileged user management Access certification Access management and governance Threat and vulnerability management Data management and protection Risk analytics Vigilant Incident response and forensics Application security testing Threat modeling and intelligence Security event monitoring and logging Penetration testing Vulnerability management Data classification and inventory Breach notification and management Data loss prevention Data security strategy Data encryption and obfuscation Records and mobile device management Information gathering and analysis around: User, account, entity Events/incidents Fraud and anti-money laundering Operational loss Crisis management and resiliency Security operations Security awareness and training Resilient Recover strategy, plans & procedures Testing & exercising Business impact analysis Business continuity planning Disaster recovery planning Change management Configuration management Network defense Security operations management Security architecture Security training Security awareness Third-party responsibilities * The Deloitte cybersecurity framework is aligned with industry standards and maps to NIST, ISO, COSO, and ITIL. As used in this document, Deloitte means Deloitte & Touche LLP, a subsidiary of Deloitte LLP. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. 20

21 Cyber risk Deloitte cybersecurity framework* (cont d) Certain cybersecurity domains may be partially covered by existing IT audits, however many capabilities have historically not been reviewed by internal audit Cybersecurity risk and compliance management Secure development life cycle Security program and talent management Secure Compliance monitoring Issue and corrective action planning Regulatory and exam management Risk and compliance assessment and mgmt. Integrated requirements and control framework Third-party management Secure build and testing Secure coding guidelines Application role design/access Security design/architecture Security/risk requirements Information and asset management Security direction and strategy Security budget and finance management Policy and standards management Exception management Talent strategy Identity and access management Evaluation and selection Contract and service initiation Ongoing monitoring Service termination Information and asset classification and inventory Information records management Physical and environment security controls Physical media handling Account provisioning Privileged user management Access certification Access management and governance Threat and vulnerability management Data management and protection Risk analytics Vigilant Incident response and forensics Application security testing Threat modeling and intelligence Security event monitoring and logging Penetration testing Vulnerability management Data classification and inventory Breach notification and management Data loss prevention Data security strategy Data encryption and obfuscation Records and mobile device management Information gathering and analysis around: User, account, entity Events/incidents Fraud and anti-money laundering Operational loss Crisis management and resiliency Security operations Security awareness and training Resilient Recover strategy, plans & procedures Testing & exercising Business impact analysis Business continuity planning Disaster recovery planning Change management Configuration management Network defense Security operations management Security architecture Security training Security awareness Third-party responsibilities * The Deloitte cybersecurity framework is aligned with industry standards and maps to NIST, ISO, COSO, and ITIL. SOX (financially relevant systems only Penetration and vulnerability testing BCP/DRP Testing 21

22 Cyber risk Assessment approach An internal audit assessment of cybersecurity should cover all domains and relevant capabilities, and involve subject matter specialists when appropriate Phase Phase I: Planning and scoping Phase II: Understand current state Phase III: Risk assessment Phase IV: Gap assessment and recommendations Key activities Activities: Identify specific internal and external stakeholders: IT, Compliance, Legal, Risk, etc. Understand organization mission and objectives Identify industry requirements and regulatory landscape Perform industry and sector risk profiling (i.e., review industry reports, news, trends, risk vectors) Identify in-scope systems and assets Identify vendors and third-party involvement Activities: Conduct interviews and workshops to understand the current profile Perform walkthroughs of in-scope systems and processes to understand existing controls Understand the use of third-parties, including reviews of applicable reports Review relevant policies and procedures, including security environment, strategic plans, and governance for both internal and external stakeholders Review self assessments Review prior audits Activities: Document list of potential risks across all in-scope capabilities Collaborate with subject matter specialists and management to stratify emerging risks, and document potential impact Evaluate likelihood and impact of risks Prioritize risks based upon organization s objectives, capabilities, and risk appetite Review and validate the risk assessment results with management and identify criticality Activities: Document capability assessment results and develop assessment scorecard Review assessment results with specific stakeholders Identify gaps and evaluate potential severity Map to maturity analysis Document recommendations Develop multiyear cybersecurity/it audit plan Deliverables Deliverable: Assessment objectives and scope Capability assessment scorecard framework Deliverable: Understanding of environment and current state Deliverable: Prioritized risk ranking Capability assessment findings Deliverables: Maturity analysis Assessment scorecard Remediation recommendations Cybersecurity audit plan 22

23 Cyber risk Assessment maturity analysis Maintaining and enhancing security capabilities can help mitigate cyber threats and help the organization to arrive at its desired level of maturity Recognized the issue Ad-hoc/case by case Partially achieved goals No training, communication, or standardization Secure Vigilant Resilient Stage 1: Initial Stage 2: Managed Stage 3: Defined Stage 4: Predictable Cybersecurity domain Cybersecurity risk and compliance mgmt. Third-party management Secure development life cycle Information and asset management Security program and talent management Identity and access management Threat and vulnerability management Data management and protection Risk analytics Crisis management and resiliency Security operations Security awareness and training Process is managed Responsibility defined Defined procedures with deviations Process reviews Defined process Communicated procedures Performance data collected Integrated with other processes Compliance oversight Defined quantitative performance thresholds and control limits Constant improvement Automation and tools implemented Managed to business objectives Maturity analysis Initial Managed Defined Predictable Optimized Stage 5: Optimized Continuously improved Improvement objectives defined Integrated with IT Automated workflow Improvements from new technology Current state CMMI maturity* *The industry recognized Capability Maturity Model Integration (CMMI) can be used as the model for the assessment. Each domain consists of specific capabilities which are assessed and averaged to calculate an overall domain maturity. 23

24 Cyber risk Assessment scorecard A scorecard can support the overall maturity assessment, with detailed cyber risks for people, process, and technology. Findings should be documented and recommendations identified for all gaps Secure Vigilant Resilient Cybersecurity domain Cybersecurity risk and compliance mgmt. Third-party management Secure development life cycle Information and asset management Security program and talent management Identity and access management Threat and vulnerability management Data management and protection Risk analytics Crisis management and resiliency Security operations Security awareness and training Assessment scorecard People Process Technology Threat and vulnerability management Penetration testing Area Findings Ref. Recommendations Ref. People Process Technology The organization has some resources within the ISOC that can conduct penetration testing, but not on a routine basis due to operational constraints and multiple roles that those resources are fulfilling The organization has limited capability to conduct penetration testing in a staged environment or against new and emerging threats The organization lacks standard tools to perform its own ad-hoc and onthe-spot penetration tests to confirm or support potential vulnerability assessment alerts and/or incident investigation findings. Capability assessment findings and recommendations The organization may find it of more value and cost benefit to utilize current resources to conduct internal penetration testing on a routine and dedicated basis since they do have individuals with the necessary skills to perform this duty. The organization should expand its penetration testing capability to include more advance testing, more advanced social engineering, and develop greater control over the frequency of testing Either through agreement with a third-party vendor, or through technology acquisition, develop the technology capability to perform out of cycle penetration testing : Initial 2: Managed 3: Defined 4: Predictable 5: Optimized 24

25 A cybersecurity assessment can drive a risk-based IT internal audit plan. Audit frequency should correspond to the level of risk identified, and applicable regulatory requirements/expectations. Internal Audit FY 2015 FY 2016 FY 2017 Notes (representative) SOX IT General Computer Controls External Penetration and Vulnerability Testing X X X Annual requirement but only covers financially significant systems and applications X X X Cover a portion of IP addresses each year Internal Vulnerability Testing X Lower risk due to physical access controls Business Continuity Plan/Disaster Recovery Plan Data Protection and Information Security X Cyber risk Representative internal audit plan X X Coordinate with annual 1 st and 2 nd line of defense testing Lower risk due to Third-party Management X Lower risk due to Risk Analytics X X X Annual testing to cycle through risk areas, and continuous monitoring Crisis Management X X Cyber war gaming scenario planned Social Media X Social media policy and awareness program Data Loss Protection (DLP) X Shared drive scan for SSN/Credit Card # 25

26 Closing thoughts 26

27 Key considerations 1. Know your crown jewels not just what you want to protect, but what you need to protect 2. Know your friends contractors, vendors and suppliers can be security allies or liabilities 3. Understand the threat landscape and assess incremental threat scenarios that expose your organization to risk 4. Assess controls and Identify gaps in policies, standards, processes, metrics and reporting, etc. 5. Maintain cyber security as an organizational priority and standing agenda item in audit committee updates 6. Apprise the Audit Committee of key risks, enterprise level risk trends related to cyber security 7. Make awareness a priority within every internal department and among external partners 8. Fortify and monitor situational awareness, diligently gather intelligence, build, maintain and proactively monitor 9. Prepare for the inevitable Test your incident management process 27

28 For more information If you would like more information on cyber security or how Deloitte can help your organization, please contact one of the following professionals: Nick Galletto Americas Cyber Risk Leader Deloitte Michael Juergens Managing Principal IT Internal Audit Deloitte

29 Cyber risk Deloitte IT internal audit Leading cybersecurity risk management services Specifically suited to collaborate with you The right resources at the right time Deloitte has provided IT audit services for the past 30 years and IT audit training to the profession for more than 15 years. Our professionals bring uncommon insights and a differentiated approach to IT auditing, and we are committed to remaining an industry leader. We have distinct advantages through: Access to a global team of IA professionals, including IT subject matter specialists in a variety of technologies and risk areas A responsive team of cyber risk specialists with wide-ranging capabilities virtually anywhere in the world, prepared to advise as circumstances arise or as business needs change A differentiated IT IA approach that has been honed over the years in some of the most demanding environments in the world, with tools and methodologies that help accelerate IT audit Access to leading practices and the latest IT thought leadership on audit trends and issues Number 1 provider of cyber risk management solutions The only organization with the breadth, depth, and insight to help complex organizations become secure, vigilant, and resilient cyber risk management projects in the U.S. alone in 2014 executed cross industry 11,000 risk management and security professionals globally across the Deloitte Touche Tohmatsu Limited network of member firms Contributing to the betterment of cyber risk management practices Assisted National Institute of Standards and Technology in developing their cybersecurity framework in response to the 2013 Executive Order for Improving Critical Infrastructure Cybersecurity Third-party observer of the Quantum Dawn 2 Cyber Attack Simulation, conducted by the Securities Industry and Financial Markets Association in July 2013 Working with government agencies on advanced threat solutions Named as a Kennedy Vanguard Leader in cyber security consulting: [Deloitte] continually develops, tests, and launches methodologies that reflect a deep understanding of clients cyber security and help the firm set the bar. Source: Kennedy Consulting Research & Advisory; Cyber Security Consulting 2013; Kennedy Consulting Research & Advisory estimates 2013 Kennedy Information, LLC. Rreproduced under license. Deloitte s ability to execute rated the highest of all the participants Forrester Research, Forrester Wave TM : Information Security Consulting Services Q1 2013, Ed Ferrara and Andrew Rose, February 1,

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