Cybersecurity Risk Management for Financial Services
How Cybersecurity Asset Management Improves Risk Management
In the financial services industry, cybersecurity risk management is paramount to safeguarding sensitive data and preserving the integrity of financial systems. Financial institutions face a myriad of risks, including data breaches, ransomware attacks, and system vulnerabilities. There are also regulatory risks in getting it wrong. In 2022, the U.S. Securities and Exchange Commission (SEC) fined more than a dozen banks almost $2 billion for cybersecurity shortcomings.
Effective cybersecurity risk management in this sector requires a proactive approach, incorporating robust security measures, employee training, and continuous monitoring. Regulatory compliance and adherence to industry standards further enhance resilience against evolving cyber threats, ultimately fortifying the financial sector against potential breaches and disruptions.
This white paper will cover how cybersecurity asset management improves cybersecurity risk monitoring, creates a foundation for business continuity and disaster recovery planning, and enables compliance with common cybersecurity and risk frameworks and regulations.
What is cybersecurity asset management?
The primary goal of cybersecurity asset management is to help you gain a comprehensive understanding of your organization's assets in order to improve security and reduce risk. Effective cybersecurity asset management solutions enhance your organization's overall cybersecurity posture by providing a solid foundation for risk assessment, vulnerability management, access control, and incident response. It helps you make informed decisions about resource allocation and prioritization, ultimately contributing to better security operations.
The primary components of a cybersecurity asset management solution include:
Asset discovery & inventory
Cybersecurity asset management solutions are designed to automatically discover and inventory all of the connected assets within your organization's network. This includes computers, servers, routers, switches, mobile devices, and other IT, IoT, and OT assets. These solutions use methods such as network sensor-based data collection to identify and catalog assets as well as to map dependencies between assets and between assets and critical business functions.
Critical business function identification
Cybersecurity asset management solutions use AI and data science to identify critical business functions. These functions are the core activities that keep an organization running smoothly and generating revenue. Identifying and prioritizing critical business functions is crucial for you to build cyber resilience, allocate security and IT resources, and develop effective business continuity and disaster recovery plans.
Real-time monitoring
Cybersecurity asset management solutions provide real-time monitoring of assets on your network. Continuously monitoring and tracking assets allows your organization to detect changes or anomalies in its IT environment, aiding in the early identification of potential security incidents.
Incident response
In the event of a cybersecurity incident, cybersecurity asset management provides a foundation for incident response teams to quickly identify affected assets and take appropriate action to contain and mitigate an incident.
Compliance & audit
Effective cybersecurity asset management is essential to prove that security policies and compliance requirements are met. Maintaining an accurate inventory of assets is often required to comply with regulatory requirements and for audit purposes. Additionally, understanding the location of sensitive data and its interaction with various assets is essential for data protection and compliance with data privacy regulations.
Vulnerability management
Vulnerability scanning tools identify and assess vulnerabilities present in your organization's environment. This includes software vulnerabilities, misconfigurations, and other weaknesses that could be exploited by attackers. Cybersecurity asset management allows your security teams to focus on addressing the most critical issues first by prioritizing vulnerable assets. It does this by evaluating the impacted asset’s connection to critical business functions and their interdependencies with other assets.
Business continuity & disaster recovery
Understanding the full scope of your organization's digital assets allows for effective risk assessment. It is integral to developing robust continuity and recovery strategies, ensuring that essential assets are prioritized, protected, and efficiently restored in the event of a cybersecurity incident or disaster.
Risk management
Accurate and constantly updated asset information, including known vulnerabilities and dependencies, enables your organization to assess potential risks associated with specific assets. You can prioritize security efforts, allocate resources effectively, and implement targeted measures to mitigate risks, enhancing your overall cybersecurity resilience.
Effective cybersecurity asset management enhances an organization's overall cybersecurity posture by providing a solid foundation for risk management, vulnerability management, and incident response. It helps organizations make informed decisions about resource allocation and prioritization, ultimately contributing to better security and more efficient IT operations.
How cybersecurity asset management improves risk management
Cybersecurity risk monitoring involves the continuous surveillance and assessment of your organization's digital environment to identify, evaluate, and respond to potential threats and vulnerabilities. It encompasses the ongoing observation of security events, detection of anomalous activities, and analysis of potential risks to information systems, networks, and sensitive data. The goal of cybersecurity risk monitoring is to proactively manage and mitigate cybersecurity risks, ensuring the protection of critical assets and maintaining the overall security posture of your organization.
Real-time cybersecurity risk monitoring typically requires dedicated security monitoring solutions, such as security information and event management (SIEM) systems, intrusion detection systems (IDS), intrusion prevention systems (IPS), and other threat detection and response mechanisms. However, those tools focus on detecting possible threats; they have a blind spot when it comes to understanding the holistic environment from both an IT point of view as well as a line of business point of view. Additionally, security monitoring solutions are noisy. The sheer quantity of alerts, many of which may be false positives, diminishes your analyst’s ability to effectively respond to genuine threats. Alert fatigue can lead to reduced attentiveness, slower reaction times, and an increased risk of overlooking or ignoring critical security alerts, undermining the effectiveness of your organization's cybersecurity defenses.
Cybersecurity asset management solves this issue. It understands your IT environment and how it connects to and serves your critical business functions. It contextualizes the alerts from security monitoring solutions, allowing you to prioritize alerts by risk.
Prioritize security alerts
A cybersecurity asset management solution catalogs and tracks your assets, collecting and maintaining information about each asset and identifying vulnerabilities that need to be addressed. It understands the connection between your IT infrastructure and your critical business functions. This allows analysts to prioritize alerts generated by security monitoring solutions based on their impact on critical business functions and prioritize response efforts.
Assess & mitigate risks more effectively
With a complete inventory of assets, you can conduct thorough risk assessments to identify and prioritize cybersecurity risks. By understanding the criticality of assets and their potential impact on business operations, you can allocate resources more effectively to mitigate high-risk areas and prioritize security measures accordingly.
Discover & identify third-party risks
Cybersecurity asset management gives you complete visibility into the true extent of your environment, including third-party vendors and contractors whose systems are connected to, or communicating with, assets in your environment. This comprehensive list of external vendors allows you to accurately understand your third-party dependencies and measure your third-party risk.
Demonstrate compliance with regulatory requirements
Maintaining an accurate inventory of assets is often required for regulatory compliance and audit purposes. Cybersecurity asset management helps you demonstrate compliance with regulatory requirements by providing evidence of asset inventory, configuration management, and security controls. This is discussed in more detail later in this paper.
Automatically monitor changes to your risk profile
Cybersecurity asset management continuously monitors your environment in order to detect changes in your IT technology and vulnerabilities. This is an ongoing process to ensure a dynamic and up-to-date understanding of your organization's security posture.
How cybersecurity asset management improves business continuity & disaster recovery planning
Financial institutions are highly dependent on their data and IT systems to function effectively, and the consequences of disruptions, whether due to natural disasters, cyberattacks, or other incidents, can be severe. Business continuity and disaster recovery (BCDR) planning is a specialized application of risk management that specifically addresses the risks related to business continuity and disaster recovery, ensuring that financial institutions can continue to function in the face of unexpected disruptions.
Cybersecurity asset management significantly improves BCDR planning through several key mechanisms:
Reducing & mitigating risk
Cybersecurity asset management provides complete visibility into your entire IT environment. It continuously monitors and assesses all points where your organization's assets are exposed to potential cyber threats. By identifying and mitigating vulnerabilities and weaknesses, your organization can proactively reduce the risk of successful cyber attacks that could disrupt business operations. Cybersecurity asset management also provides visibility into your third-party risks by identifying the third-party assets that are connected to your environment and helps you prioritize those that are connected to your critical business functions.
Enhancing resilience
Understanding the entirety of your IT environment helps you build a more resilient infrastructure. By identifying critical business functions, the assets they depend on, dependencies between assets, and potential points of failure, your cybersecurity team can develop and implement strategies to ensure that key functions remain operational during and after a cyber incident, contributing to overall business continuity.
Optimizing incident response
In the event of an incident, cybersecurity asset management provides real-time visibility into your entire IT infrastructure, allowing your incident response team to quickly identify affected assets and assess the impact on critical business functions. This allows teams to prioritize incident response efforts, quickly and efficiently containing the incident and minimizing downtime.
Business impact analysis
Cybersecurity asset management helps you conduct a comprehensive business impact analysis by identifying your critical business functions and the associated assets that support those functions. It helps you connect potential cyber threats to the specific critical business functions and assets they could impact. This analysis informs disaster recovery plans, allowing you to prioritize resources and efforts based on asset criticality and their contribution to business continuity.
Proactive planning
By continuously monitoring changes in your IT environment, including new assets and vulnerabilities, cybersecurity asset management enables you to proactively update and refine your organization’s BCDR plans. This proactive approach ensures that plans remain effective and aligned with the evolving threat landscape.
Regulatory compliance
Many regulatory frameworks require organizations to have robust BCDR plans. Cybersecurity asset management assists by providing the necessary visibility and risk management practices to ensure that digital assets critical to compliance are adequately protected.
Overall, cybersecurity asset management contributes to business continuity and disaster recovery planning by reducing risks, enhancing resilience, optimizing incident response, conducting impact analysis, enabling proactive planning, and supporting regulatory compliance efforts.
How cybersecurity asset management enables common frameworks and regulations
Please note that this section is meant to be an overview of a handful of recently updated financial services-related regulations. This is not a comprehensive list of all cybersecurity regulations and their requirements. There are links to the full text of the regulations provided if you would like to perform a deeper investigation.
New York State Department of Financial Services
On November 1, 2023, the New York State Department of Financial Services (NYDFS) updated its cybersecurity regulations. A copy of the updated regulations is available here. This update includes several net new additions to the regulations including vulnerability management, asset management, and business continuity and disaster recovery.
Asset management
NYDFS cybersecurity regulations have added the requirement that organizations create and maintain a complete and accurate asset inventory.
A cybersecurity asset management solution creates and maintains this asset inventory for you, updating itself automatically as your environment changes. Having a real-time understanding of your most important assets, internal or external, as well as knowing the connections between them, is a critical foundation for risk management, as well as maintaining your cybersecurity compliance.
Vulnerability management
While vulnerability assessments were already required under the previous version of the NYDFS cybersecurity regulations, the guidelines have been expanded. They now include the requirement that you know which assets your current vulnerability management solution is capable of scanning, that you perform a manual inspection of assets that cannot be automatically scanned, and that you prioritize vulnerabilities based on their risk to your organization.
A cybersecurity asset management solution allows you to meet these guidelines. It contains key data on each asset, including vulnerability data. In addition to measuring the severity, potential impact, and likelihood of exploitation of a given vulnerability, it helps you to prioritize vulnerable assets based on their connections to your critical business functions.
Business Continuity & Disaster Recovery Plan
The NYDFS cybersecurity regulations have added the requirement that organizations have a business continuity and disaster recovery (BCDR) plan as part of their wider incident response plan.
A cybersecurity asset management solution gives you the data about your IT infrastructure you need to create an effective BCDR plan and perform successful tests of the plan. It gives you the critical information you need to build an effective BCDR plan and be truly resilient.
Download the white paper “Achieve NYDFS Compliance” to learn more.
EU Digital Operational Resilience Act
The Digital Operational Resilience Act (DORA) is the European Commission's effort to address the existing country-by-country patchwork of digital operational resilience regulations on an EU-wide level. DORA was passed on January 16, 2023, and the regulation will be enforceable 24 months later. You can find the complete text of DORA on EUR-Lex here.
Broadly speaking, the parts of DORA that can be addressed by cybersecurity asset management are covered in Chapters 2 through 5. Among other things, these chapters cover risk management, incident management, business continuity, and managing third-party risk.
Risk Management Framework
According to DORA, financial entities must establish a robust risk management framework. Cybersecurity asset management helps you do this by creating a comprehensive inventory of all digital assets and resources within an organization. It then identifies your critical business functions and the assets that those critical business functions are dependent upon. Cybersecurity asset management also scans your organization's assets to identify and assess vulnerabilities based on their severity, the criticality of the asset affected, and the effectiveness of existing controls. Overall, cybersecurity asset management helps you make informed decisions to manage or mitigate risks and achieve optimal operational resilience.
Incident Management
According to DORA, financial entities must establish and implement an incident management process. Before an incident happens, cybersecurity asset management helps you create incident response plans by providing complete visibility into your IT environment. In the event of a cybersecurity incident, cybersecurity asset management provides a foundation for incident response teams to quickly identify affected assets and take appropriate action to contain and mitigate the incident. After an incident, it supports comprehensive forensic analysis so that lessons learned can be documented and incorporated into improving procedures and policies.
Business Continuity
According to DORA, financial entities must establish a business continuity policy conducting business impact analyses and testing business continuity plans yearly. In addition to a comprehensive asset inventory, cybersecurity asset management can identify your critical business functions and identify interconnected assets, providing you with the knowledge you need to create an effective BCDR plan and perform successful testing.
Managing Third-Party Risk
As part of their risk management framework, financial entities are required to adopt and regularly review a strategy on third-party risk. In addition to complete visibility into your environment, cybersecurity asset management gives you complete visibility to third-party vendors and contractors whose systems are connected to, or communicating with, assets in your environment. This comprehensive view allows you to accurately understand your third-party dependencies and measure your third-party risks.
Download the white paper “Ensure EU Digital Operational Resilience Act Compliance” to learn more.
The Federal Financial Institutions Examination Council
The FFIEC develops and issues uniform guidelines, standards, and reporting forms. These guidelines cover a wide range of areas, including information security, cybersecurity, risk management, and business continuity planning. Cybersecurity asset management plays a crucial role in addressing FFIEC standards by providing a systematic approach to managing and securing digital assets. You can find the FFIEC Cybersecurity Assessment Tool, as well as supporting documentation, on the FFIEC’s website.
The FFIEC Cybersecurity Assessment Tool consists of two parts: an Inherent Risk Profile Assessment, and a Cybersecurity Maturity Assessment. First, we will explore how cybersecurity asset management helps you more accurately assess your Inherent Risk Profile, then the Cybersecurity Maturity assessment tool.
Meeting the Inherent Risk Profile Assessment guidelines
Of the five categories assessed to determine an organization’s Inherent Risk Profile, a cybersecurity asset management solution gives you the data you need to address the Technologies and Connection Types category. This part of the assessment focuses on your ability to identify things such as the number of network devices you have, the number of internet service provider connections you have, or the number of third parties with access to internal systems, just to name a few.
The cybersecurity asset management capability that provides you with the bulk of the data you need to accurately measure where your organization falls in this category is asset discovery and inventory. It automatically discovers and inventories all of the assets within your organization's network. This data helps you identify the data points required to complete a large portion of this section of the assessment.
Meeting the Cybersecurity Maturity Assessment guidelines
The Cybersecurity Maturity Assessment measures an organization’s cybersecurity maturity on a 5-step scale ranging from ‘basic’ to ‘innovative’. This section of the assessment has five domains. Of these five domains, cybersecurity asset management contributes to helping you accurately gauge your organization’s maturity in four:
Cyber Risk Management and Oversight
Cybersecurity Controls
External Dependency Management
Cyber Incident Management and Resilience
Cyber Risk Management and Oversight
A cybersecurity asset management solution helps you meet the requirements of the IT Asset Management and Risk Management Program sections.
The requirements for the IT Asset Management section that a cybersecurity asset management solution helps you meet include, among other things, having an asset inventory, prioritizing assets, and having automated tools to maintain the asset inventory. Cybersecurity asset management helps you fulfill these guidelines through its ability to discover assets, create an inventory, identify critical business functions, map assets to critical business functions as well as dependencies between assets so that assets can be accurately prioritized, and monitor any changes in your asset environment to automatically update the inventory.
The requirements for the Risk Management Program section that a cybersecurity asset management solution helps you meet include, among other things, the requirement that a risk management function exists, that the risk management program incorporates cyber risk, and that cybersecurity metrics are used to facilitate strategic decision-making and funding. Cybersecurity asset management helps you fulfill these guidelines through its ability to continuously and accurately assess and mitigate asset-related risks, including known vulnerabilities and dependencies.
Cybersecurity Controls
A cybersecurity asset management solution helps you meet the requirements of the Threat and Vulnerability Detection section. The requirements it addresses include, among other things, that independent testing is conducted according to the risk assessment for external facing systems and the internal network and that weekly vulnerability scanning is rotated among environments to scan all environments throughout the year or even performed weekly across all environments. Cybersecurity asset management helps you fulfill these guidelines through its ability to identify and prioritize vulnerabilities, including the ability to prioritize vulnerable assets for remediation.
External Dependency Management
A cybersecurity asset management solution helps you meet the requirements of the Connections section. The requirements it addresses include, among other things, that the critical business processes that are dependent on external connectivity have been identified; that a network diagram is in place and identifies all external connections; and that a validated asset inventory is used to create comprehensive diagrams depicting data repositories, data flow, infrastructure, and connectivity. Cybersecurity asset management helps you fulfill these guidelines through its ability to give you complete visibility into the true extent of your environment, including identifying connections with third-party vendors and contractors.
Cyber Incident Management and Resilience
A cybersecurity asset management solution helps you meet the requirements of the Incident Resilience Planning and Incident Resilience Response and Mitigation sections.
The requirements for the Incident Resilience Planning section that a cybersecurity asset management solution helps you meet include among other things, that the institution plans to use business continuity, disaster recovery, and data backup programs to recover operations following an incident; that the remediation plan and process outlines the mitigating actions, resources, and time parameters; and that plans can range in sophistication up to a plan where multiple systems, programs, or processes are implemented into a comprehensive cyber resilience program to sustain, minimize, and recover operations from an array of potentially disruptive and destructive cyber incidents. Cybersecurity asset management helps you fulfill these guidelines through its ability to help you create effective business continuity and disaster recovery plans. It gives you the ability to understand the full scope of your organization's digital assets, ensuring that essential assets are prioritized, protected, and efficiently restored in the event of a cybersecurity incident or disaster.
The requirements for the Incident Resilience Planning section that a cybersecurity asset management solution helps you meet include among other things, that a process is in place to contain incidents and restore operations with minimal disruption, an analysis of security incidents is performed in the early stages of an intrusion to minimize the impact of the incident and that the technology infrastructure has been engineered to limit the effects of a cyber attack on the production environment from migrating to the backup environment. Cybersecurity asset management helps you fulfill these guidelines through its ability to provide a foundation for incident response teams to quickly identify affected assets and take appropriate action to contain and mitigate the incident.
Download the white paper “Ensure FFIEC Compliance” to learn more.
Conclusion
Cybersecurity risk management is crucial for safeguarding sensitive data and maintaining the integrity of financial systems within the financial services industry. Cybersecurity asset management is a critical component to effectively manage cybersecurity risks, offering a comprehensive understanding of organizational assets to enhance your security posture, streamline risk assessment and vulnerability management, and facilitate regulatory compliance and audit requirements.
By automating asset discovery and inventory, identifying critical business functions, providing real-time monitoring, facilitating incident response, ensuring compliance, managing vulnerabilities, and supporting business continuity and disaster recovery planning, cybersecurity asset management enables financial organizations to strengthen their cybersecurity resilience and effectively mitigate cyber threats. Ultimately, integrating cybersecurity asset management into risk management strategies empowers financial institutions to make informed decisions, prioritize resources efficiently, and maintain robust cybersecurity defenses in an ever-evolving threat landscape.
