How Financial Institutions Should Prepare For and Respond to a Cybersecurity Incident
Cybersecurity incidents and data compromises continue to plague financial institutions on a seemingly daily basis. Without a proper response plan in place, financial institutions risk significant damage to their reputation and operations, as well as serious potential liability from regulators and class-action litigation. This guide outlines the procedures financial institutions should implement to prepare for and respond to a cybersecurity incident.
It is crucial that financial institutions adopt a response policy to mitigate the harm of a cybersecurity incident. This policy should establish a response team, including an executive officer and technical and operational personnel, charged with handling all cybersecurity incidents.
Time is of the essence during any cybersecurity incident, and communication is vital to the response team’s effective handling and investigation of the situation. Each employee should know how to report an incident. Notification processes, responsible personnel, and other elements of the communications plan should be as seamless as possible to enable the cybersecurity response team to immediately investigate the potential incident and determine whether an incident actually occurred. As soon as the incident is confirmed, the team must immediately respond.
Determine the severity of the incident. The response team should first determine the severity of the harm and the type of incident that occurred. This will help determine the scope of response necessary to appropriately address the incident. The team should be sure to create a detailed record of all investigations and responses.
Mitigate the harm. The response team next should work to mitigate the harm on its systems. For example, the team can quarantine or isolate the compromised system, install security patches to prevent further incidents, update anti-virus signatures, and conduct a vulnerability analysis to identify elements of the system potentially at risk of a similar incident.
Establish lines of communication. Pre-determined and clear lines of communication, both internal and external, are critical to responding to an incident. The response team should also be in communication with appropriate auxiliary teams in the financial institution. For example, if the cybersecurity incident led to customer information being compromised, the response team should coordinate with the customer relations team to facilitate customer notification. Senior management should also inform the board of directors of the incident so that the directors can assist in developing a response strategy as appropriate.
When deemed necessary, the response team should also be in contact with third-party advisors, such as legal counsel or forensics experts. If the response team determines an incident has potentially compromised personally identifiable information or other legally protected information, the team should immediately contact legal counsel and the institution’s insurance carrier (unless instructed otherwise by legal counsel).
Review and repair vulnerabilities. After a financial institution has experienced a cybersecurity incident, it should evaluate system vulnerabilities by identifying the incident’s source and method. The financial institution should rectify or mitigate the risk of the vulnerabilities as soon as possible.
After addressing the incident, the financial institution should also evaluate its response team’s efficiency and effectiveness. Are there aspects of the plan that can be improved? Were the communication lines clear and efficient? How long did it take for the team to spring into action? How long did it take to implement the mitigation? Was the response team appropriately staffed? Answers to these and other probing questions will serve to better prepare the institution for the next incident and should provide the basis for improvements to policies and procedures.
Preparing in advance for a cybersecurity incident can mean the difference between quarantining the release of sensitive data and having the sensitive data released to the public; and because preparations help control damage even if a breach happens, they can also make the difference between a small, manageable cybersecurity incident and a large, cumbersome data breach that could severely damage the reputation and operations of the company.
Link to article
- Mandatory Deposit of Foreign Exchange Export Proceeds Deriving from Natural Resources
- Financial Matters Amendment Bill with Amendments to the Insolvency Act Published – Financial Market Participants Have Until 8 February to Comment
- JP Morgan Goes Crypto, Argo Blockchain Exits
- The Supreme Court Remains Steadfast in Favor of Arbitration
- Dinsmore Among Top State, National Counsel in 2018 Bond Buyer Rankings
- Four Dinsmore Attorneys Named Top in Trademark Law
- High-Profile Litigators Join Dinsmore
WSG Member: Please login to add your comment.