Last week MCO participated in the Stockbrokers and Financial Advisers Annual Conference, a virtual event in 2020 due to COVID-19.
We set out to discuss how to manage emerging risks such as cyber security, social engineering and to deliver a successful business. The level of scrutiny as to how advice businesses manage these risks is increasing dramatically. How do you keep on top of the demands?
Kelly-Ann was joined by James Astley of the Australian Federal Police, Paul Black of KPMG Forensics and Calissa Aldridge of ASIC.
Kelly-Ann asked the audience at the beginning whether the audience could describe their feelings towards Technology in the Stockbroking & Financial Services Industry, the results were pretty positive, with most in the room feeling like technology was efficient, some saying it was room for improvement, and a small proportion feeling like it was better than paper.
We moved on quickly to really set the scene of the Technology industry, with a number of high profile Cyber-Crimes & recent attacks, both in the FS industry and outside it, it was timely to highlight the challenges firms have in protecting their clients, and themselves from these mostly external threats.
Some examples shared by James, Paul and Calissa included:
Meanwhile, we also heard how the NZX was suffering its worst cyber attack (DDOS) the very week of the conference, with some participants having to halt trading due to the attack.
What are some of the key causes of these incidents? Paul, a Partner at KPMG Forensics went on to discuss how in many instances it came down to a People problem. Criminals are using Ransomware as a distraction, so technology teams focus on the Ransom and the crime, meanwhile the criminals are gaining access to other data and information in the process. James from the AFP also noted that Remote Access Trojans are using tools like Keylogging to facilitate access to passwords and systems, which therefore mean the crimes can go undetected for a long time. The AFP recommends visiting www.afp.gov.au/rats for more information on this attack.
Both during the session and in the preparation session, we discussed the challenges firms have in monitoring security risks and issues. In one very large cyber crime case with a large Retail Firm, it was discovered that after a bad year of Revenue, the firm had made cuts to its Technology Staff, in particular the Security team, and with this, this meant reduced budget for monitoring security weaknesses. In this case, the logging & security tools had identified that there was a breach, but no one with the skills was monitoring the tools which did in fact detect the anomalies. Thus, a people problem!
Firms must review their technology controls to ensure there are adequate protections for their client and employee’s data. There were a few key technologies discussed including:
Training & Education
Training should not be provided to employees on a once-off basis. Education and awareness for Cyber-Crime risk is an important element of a control framework. Phishing education can be easily rolled out to firms, to test their staff on how easy it would be to click and be vulnerable to business email crimes.
Two-Factor Authentication
Firms should endeavor to enable two-factor authentication wherever they can, and the one take away was for individuals to enable 2FA on all of their email accounts asap. It is well known that 2FA can reduce the risk of business email compromise significantly, and as such, it is highly recommended to be implemented. With a lot of cloud services now available, this should be an easy win for firms. At least AUD$500,000 has been taken in Australia where Superannuation accounts have been compromised, where 2FA would have prevented such loss.
Disaster Recovery & Contingency Planning
Firms should ensure they test their DR Plans adequately on an annual basis, as we have seen with Ransomware attacks, businesses can be taken down in their entire production environment, with no access to easily invoke backups, or to discover at an actual event that their backups are lost or don’t actually exist! Testing a full recovery is critical to your information security controls.
Outsourcing
ASIC will be reviewing and updating their Regulatory materials with relation to Outsourcing, in particular Consultation Paper 314 was released in 2019 with regards to Market Integrity Rules for technological and operational resilience to promote resilience of critical systems. Do watch out for updates with regards to the final guidance. Businesses should review technology vendors regularly (at least once a year) to ensure information security controls are being tested and reviewed where they are outsourced.
Encryption
Where possible, one critical control of data within your database, is database level encryption. If you can afford to control production and sensitive data in your database with encryption, do review and implement.
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