Posts

soc 2 compliance

Why Your MSP Should Have SOC 2 Compliance: Securing Your Digital Trust

In an era where data security is paramount, the choice of a Managed Service Provider (MSP) hinges on their ability to safeguard sensitive information for their clients. This is where SOC 2 compliance, established by the American Institute of Certified Public Accountants (AICPA), becomes critical.

It’s not just a standard; it’s a necessity for MSPs to build trust and demonstrate a commitment to a strong data security posture. In this article, we explore the significance of SOC 2 compliance for MSPs and why it should be a key factor in your decision when choosing a provider.

Understanding SOC 2 and Its Relevance

SOC 2, developed by the American Institute of Certified Public Accountants (AICPA), is a framework for managing data security, specifically aimed at service organizations like MSPs. It focuses on five critical principles: Security, Privacy, Confidentiality, Processing Integrity, and Availability. These principles ensure that an MSP not only protects data from unauthorized access but also manages it responsibly throughout its lifecycle.

The relevance of SOC 2 in the MSP landscape is profound. It serves as a comprehensive measure of how well an MSP secures and handles client data, going beyond basic security protocols. This compliance is crucial in today’s data-driven world where businesses are increasingly vulnerable to cyber threats. By adhering to SOC 2 standards, MSPs demonstrate their commitment to data protection, a vital component in establishing trust with clients. For this reason, more and more businesses are asking that their MSP receive a SOC 2 attestation before engaging with their services – a smart move!

Why SOC 2 Compliance Matters for MSPs

SOC 2 compliance is pivotal for MSPs as it signifies a dynamic approach to data security and management. When MSPs undergo a SOC 2 audit, they validate their systems against stringent security standards, showcasing a deep investment in protecting their client’s data. This not only enhances their reputation but also fosters trust among current and potential clients who are increasingly vigilant about their data security.

In this way, SOC 2 compliance offers a competitive edge in building trust. In a market where clients are more informed and concerned about cybersecurity, being SOC 2 compliant distinguishes an MSP from its competitors, potentially attracting clients who prioritize security. Successfully passing this audit can also open doors to new market segments and clients who specifically seek out SOC 2-compliant providers.

soc 2 compliant

The Business Impact of SOC 2 Compliance

The business impact of SOC 2 compliance for MSPs extends far beyond just meeting a set of standards. It fundamentally enhances the way an MSP is perceived in the market. By achieving SOC 2 compliance, an MSP not only secures its systems but also solidifies its reputation as a trustworthy and secure service provider. This heightened trust can lead to increased client retention, a critical factor in the MSP business model.

Additionally, in the event of a data breach, non-compliant MSPs face significant reputational damage, potential loss of clients, and legal ramifications. Conversely, SOC 2 compliance can serve as a safeguard against these risks, ensuring business continuity and stability. It positions the MSP as a leader in security, potentially attracting more discerning clients who value stringent data protection measures.

SOC 2 compliance is not just about meeting a benchmark; it’s about building a resilient, trustworthy business that can thrive in a landscape where data security is a top priority for clients.

Key Benefits

  • Enhanced Data Security: Ensures that MSPs have dynamic systems to protect sensitive data.
  • Increased Client Confidence: Demonstrates a commitment to data protection, building trust with clients.
  • Market Differentiation: Differentiates the MSP from competitors who may not have SOC 2 compliance.
  • Risk Management: Reduces the risk of data breaches and the associated costs.
  • Regulatory Compliance: Helps in meeting other regulatory requirements, providing a comprehensive compliance strategy.
  • Long-term Business Growth: Attracts clients who value security, contributing to sustainable business growth.

soc 2

Achieving and Leveraging SOC 2 Compliance

A SOC 2 audit is designed to assess the risks associated with third-party interactions. It does this by examining the internal controls, policies, and procedures of an organization, ensuring they align with the Trust Services Criteria set by the AICPA. Essentially, a SOC 2 audit report zeroes in on how a service organization manages its internal controls in five key areas: security, availability, processing integrity, confidentiality, and privacy of its system.

Achieving SOC 2 compliance involves a rigorous audit conducted by a certified public accountant (CPA). MSPs can opt for either a Type 1 or Type 2 audit, with Type 1 evaluating the organization’s compliance at a specific point in time and Type 2 assessing compliance over a longer period. This process not only tests the MSP’s security controls but also demonstrates their commitment to maintaining high standards of data security.

Once compliant, MSPs can leverage this status as a powerful marketing tool, showcasing their commitment to security and differentiating themselves from competitors. SOC 2 compliance becomes a badge of trust and reliability, opening up new market opportunities and attracting clients who prioritize data security. This strategic use of SOC 2 compliance in branding and marketing can significantly enhance an MSP’s market position.

Takeaways

SOC 2 compliance is not just a regulatory framework but a cornerstone of trust in the MSP industry. It underscores an MSP’s dedication to security, boosts their reputation, and provides a competitive edge. For businesses seeking an MSP, choosing one with SOC 2 compliance ensures a partnership grounded in stringent data protection and reliability.

If you’re looking for an MSP that embodies these values, consider Coretelligent’s CoreComply service. CoreComply exemplifies the commitment to security and compliance that is essential in today’s digital landscape. Reach out to Coretelligent today to learn how CoreComply can elevate your organization’s data security and compliance.

by

Navigating the Rising Tide of Cyber Attacks: Insights for Small and Medium-Sized Businesses

As we look back on 2023, the surge in cyber attacks has emerged as a formidable challenge, particularly for small and medium-sized businesses (SMBs). With limited resources and often less sophisticated security measures, SMBs have become attractive targets for cybercriminals. 

On average, these incidents cost SMBs an alarming $25,000, a significant financial strain that can jeopardize their survival. The rise in cybercrime is not just a statistic; it’s a call for SMBs to fortify their digital defenses.

Understanding the Current Cybersecurity Landscape 

Common Types of Cyber Attacks: Among the myriad of cyber threats, certain types are more prevalent in targeting SMBs. Malware and ransomware, especially, stand out, with 18% of attacks on small businesses being malware-related.

The Financial Burden: The financial implications of these attacks are substantial. The average cost of a data breach for SMBs has escalated to $4.35 million, the highest on record, and the recovery from a ransomware attack can cost nearly as much. 

The Prolonged Response Time: Another critical aspect of the current landscape is the time it takes to identify and contain a breach. On average, it took about 277 days, approximately nine months, to identify and contain a breach in 2022. This prolonged response time can exacerbate the damage caused by a breach, both financially and in terms of customer trust. 

The Role of Human Error: It’s important to note that human error plays a significant role in the vulnerability of SMBs to cyber attacks. A significant portion of breaches, 43%, involve insider threats, either intentional or unintentional. Additionally, the fact that 94% of malware is delivered via email highlights the need for continuous employee education and vigilant email security practices . 

The Impact of Remote Work: The shift to remote work has introduced additional complexities. Remote work not only increases the attack surface for cybercriminals but also leads to higher costs per breach. Distractions at home contribute to employees falling prey to phishing scams, and breaches in remote work settings take longer to contain. 

The cybersecurity landscape for SMBs is characterized by a high frequency of targeted attacks, significant financial implications, and extended breach identification times. These challenges are compounded by factors such as human error and the increasing prevalence of remote work. Understanding these dynamics is the first step for SMBs in developing a strong cybersecurity strategy that can withstand the rising tide of cyber threats.

The Impact of Cyber Attacks on SMBs 

Cyber attacks on small and medium-sized businesses (SMBs) have wide-ranging and serious consequences, extending beyond immediate financial losses: 

  • Financial Strain: The average cost of a data breach for SMBs is around $4.35 million, and recovering from a ransomware attack can cost nearly $2 million. These costs can significantly strain an SMB’s finances, sometimes leading to bankruptcy. 
  • Operational Disruptions: Cyber attacks can cause extended operational downtimes due to the average breach detection and containment time of 277 days. This downtime disrupts business continuity, affects productivity, and can result in the loss of clients. 
  • Reputational Damage: A security breach can severely damage an SMB’s reputation, leading to a loss of customer trust and potentially long-term business relationships. 
  • Legal and Regulatory Consequences: Breaches can lead to legal and regulatory issues, especially if sensitive customer data is compromised, attracting fines and legal actions. 
  • Psychological Impact: The stress and anxiety associated with a cyber attack affect both business owners and employees, impacting morale and job security. 
  • Strategic Setbacks: Resources diverted to manage and recover from an attack can delay or cancel business growth or innovation initiatives. 
  • Increased Cybersecurity Costs: Post-attack, businesses often face increased spending on cybersecurity measures, adding to financial burdens. 

The multifaceted impact of cyber attacks underscores the necessity for SMBs to prioritize robust cybersecurity measures to safeguard their operations, finances, and reputation. 

Key Vulnerabilities in SMBs 

Small to medium-sized enterprises (SMEs) encounter numerous challenges in cybersecurity:

  • Scarcity of Resources: They often do not have enough budget or personnel to implement thorough cybersecurity measures.
  • Training Deficiencies Among Employees: There’s a lack of adequate cybersecurity awareness and training among staff, making them prone to email phishing and malware attacks.
  • Utilization of Obsolete Technologies: Reliance on outdated computers and software makes them more vulnerable to cyber attacks. Poor Access Management: Ineffective control over user access increases the likelihood of unauthorized access from within.
  • Absence of a Cybersecurity Incident Plan: Many SMEs do not have a specific strategy for managing cyber incidents, which can worsen the impact of breaches.
  • Underplaying Cyber Risks: SMEs might not fully recognize the extent of cyber threats, often adopting a wait-and-see approach to cybersecurity.
  • Dilemmas Posed by Remote Working: The shift towards more remote work broadens the potential for cyber attacks and makes managing breaches more complex.

It’s crucial for SMEs to address these security weaknesses to enhance their defense mechanisms against the continuously changing cyber threat environment.

Strategies for Enhanced Cybersecurity 

  1. Regular Updates and Patch Management: Ensure devices are configured for automatic updates and regularly check for installed updates. 
  2. Strong Password Policies: Implement policies for complex, unique passwords, and encourage using password managers. 
  3. Access Control & Multi-Factor Authentication: Employ strong access control and multi-factor authentication to prevent unauthorized access. 
  4. Data Backup and Recovery: Maintain reliable data backups and test backup procedures regularly, especially against ransomware threats. 
  5. Firewall and Endpoint Detection: Implement firewall security and endpoint detection systems to block suspicious traffic and identify unusual activities. 
  6. Data Encryption: Encrypt sensitive data both at rest and in transit. 
  7. Regular Security Audits: Conduct audits to evaluate cybersecurity controls and address vulnerabilities. 
  8. Incident Response Plan: Develop and regularly rehearse a detailed incident response plan. 
  9. Employee Education and Awareness: Train employees on cybersecurity best practices, including recognizing phishing attempts. 

Professional Cybersecurity Solutions 

Consider solutions like CoreArmor and CoreComply, which provide advanced threat detection, managed security services, and strategic planning tailored to SMB needs. CoreArmor, for example, bundles essential cybersecurity services into a comprehensive package, covering real-time monitoring, incident response, penetration testing, vulnerability scanning, and user awareness training. While CoreComply, strengthens compliance operations, aligning them with business processes and helping to identify and close gaps in current practices. 

Implementing these strategies and leveraging professional solutions like CoreArmor and CoreComply can significantly enhance an SMB’s cybersecurity posture, protecting against a broad spectrum of cyber threats and vulnerabilities. 

What You Can Do

In the face of evolving cyber threats, small and medium-sized businesses must prioritize robust cybersecurity. Coretelligent offers tailored solutions like CoreArmor and CoreComply, blending advanced threat detection, strategic planning, and compliance management. Protect your business with our comprehensive cybersecurity services. 

If you’re interested in learning what you can do to fortify your business’s defenses, watch our recent webinar, where we bring together a panel of experts, including an FBI special agent that that works on cybercrime cases, a cyber insurance specialist, and our very own team as they dive into trends, tips, and valuable insights you can use to understand the various threats at play.  

 

by
compliance for financial advisors

Staying Ahead of the Curve: Top Compliance Strategies for Financial Advisors

The landscape of financial compliance is ever-changing, with 2023 presenting a fresh set of challenges for financial advisors. As regulations evolve and technology advances, staying on top of compliance requirements is more critical than ever.

Cybersecurity: A Non-Negotiable Priority

In the digital age, cybersecurity is a cornerstone of the financial advisory sector. The year 2022 underscored the growing sophistication and variety of cyber threats, from high-profile ransomware attacks to stealthy phishing campaigns. Financial advisors, as custodians of sensitive financial data, face the daunting task of safeguarding against these risks while complying with an array of regulatory standards.

Here’s a deep dive into the current cyber threat landscape and the critical defensive strategies that can help protect your practice:

  • Ransomware: The Persistent Threat
    Ransomware continues to dominate the threat landscape due to its lucrative returns for cybercriminals and minimal risk. The trend of increasing ransomware attacks, which saw a significant rise in attack volume, demands that financial advisors maintain robust data backup systems and have a keen eye for suspicious activities that precede such attacks.
  • The Rise of SIEM Systems
    To combat the ever-present threat of ransomware, implementing a Security Information and Event Management (SIEM) system has become more prevalent. SIEM systems provide real-time visibility across an organization’s information networks, offering a sophisticated approach to threat detection and management. For many, SIEM-as-a-Service (SIEMaaS) has emerged as a cost-effective solution, outsourcing the complexities of cybersecurity monitoring to dedicated experts.
  • Navigating the Hybrid Work Model
    The shift towards remote and hybrid work models has expanded the attack surface for financial institutions. Effective endpoint detection and response (EDR) systems are crucial for monitoring the multitude of devices accessing network resources. EDR solutions stand as a bulwark against malware, isolating and neutralizing threats before they proliferate, especially critical for defending against zero-day exploits where no patch is available yet.
  • Cloud Vulnerabilities and Configurations
    As more infrastructure moves to the cloud, advisors must be vigilant about secure configurations to prevent breaches. Despite cloud platforms offering robust security features, misconfigurations remain a common entry point for attackers. Financial institutions are advised to promptly implement security patches and conduct due diligence when selecting cloud service providers.
  • Strategic Partnerships with MSSPs
    Collaborating with Managed Security Service Providers (MSSPs) who specialize in the financial sector can provide a layer of security and compliance expertise. These partnerships can strengthen IT systems’ integrity and assist in risk mitigation during and post-cloud migration processes.

By embracing these cybersecurity strategies and adopting tools and partnerships that enhance security posture, financial advisors can better protect their client data and adhere to compliance demands. It’s crucial to stay informed about emerging cybersecurity trends and implement lessons learned from past cyber events to reinforce your institution’s defenses.

A Comprehensive Approach to Compliance for Financial Advisors

In the swiftly changing world of financial services, compliance is as much about strategic foresight as it is about reacting to immediate challenges. Coretelligent stands at the forefront, offering a robust compliance platform coupled with expert advisory services tailored to the financial services sector.

CoreComply is designed as a force multiplier, streamlining the extensive compliance process and integrating technology with expertise to proactively manage and mitigate risks.

With CoreComply, financial advisors can expect:

  • A Unified Compliance Platform: CoreComply simplifies the discovery and validation of compliance gaps, integrating tools like Hyperproof and RiskRecon to provide a comprehensive overview of your compliance status.
  • Expert Advisory Services: Beyond technology, CoreComply extends the expertise of seasoned compliance professionals to navigate the regulatory landscape effectively.
  • Technical Remediation Support: CoreComply doesn’t just identify problems; it also assists with the technical remediation required, engaging directly with the necessary measures to correct issues.
  • Cost and Time Efficiency: By optimizing the compliance process, CoreComply offers significant cost savings compared to the in-house purchase of licensing and staffing a vCISO with specialized knowledge.

With regulatory challenges such as fraud prevention, audit response, and risk management growing in complexity, CoreComply’s platform serves as an invaluable ally to financial advisors. By employing CoreComply, advisors can benefit from:

  • Real-time Compliance Monitoring: Keeping pace with real-time changes in compliance requirements, ensuring advisors are always ahead of the regulatory curve.
  • Risk Assessment and Strategy: Conducting thorough risk assessments and providing a clear strategy and roadmap for compliance, aligned with business operations.
  • Incident Response Preparedness: Offering drill-based and discussion-based exercise resources for ransomware and other cybersecurity threats to prepare firms for potential breaches.

At the heart of CoreComply is the commitment to align compliance operations with business strategy, enabling advisors to pursue growth and innovation without the weight of compliance uncertainty.

Empower Your Practice with CoreComply

CoreComply is dedicated to ensuring that financial advisors are equipped with the tools and knowledge for a streamlined, secure, and compliant business practice. Embrace CoreComply’s platform to transform compliance from a task into a strategic asset.

Make the Call for Compliance Confidence

Learn more about CoreComply to see how we can support you in developing a comprehensive compliance strategy that not only meets but exceeds regulatory expectations. Don’t let compliance be your bottleneck—let it be your competitive advantage.

Reach out to us today and take the first step towards a comprehensive compliance solution that puts you in control.

by

AI-Driven Cyber Threats: A Guide for C-Suite Executives and IT Managers

AI-driven cyber threats are not just a fact; they are an ever-evolving issue for many industries. In the span of three years, Artificial Intelligence (AI) has evolved from a budding concept to a monumental force, revolutionizing industries and paving new pathways for innovation. However, with every digital stride we take, the underbelly of the cybersecurity world reveals more complexities. The same AI, which stands as a beacon of progress, is now being weaponized by nefarious minds, leading to the creation of threats more sophisticated than ever before.

ai-driven threats

 

The AI Threat Landscape:

The digital underworld is abuzz with cybercriminals harnessing the power of AI, amplifying their hacking prowess. Whether it’s the automation of cunning phishing schemes or the deployment of machine learning for relentless password attacks, the malicious use of AI is not just a concern—it’s an alarming reality. These AI-infused threats are not just multiplying; they evolve, learn, and outpace traditional defense mechanisms.

For a deeper understanding of defense against AI-driven threats and to equip your organization with the right tools and knowledge, explore this free Risk Assessment.

The Ripple Effect on Key Industries:

While the digital age offers boundless opportunities, it also brings unprecedented challenges, especially with AI-driven cyber threats. With its treasure troves of sensitive data, the Financial Services sector finds itself in the eye of the storm. The surge of AI in cyber warfare means these institutions are grappling with new threats daily.

Life Sciences entities, guardians of invaluable intellectual property, aren’t spared either. They, too, are prime targets for AI adversaries. Any entity handling confidential data, especially those with deep pockets, is in the line of fire. Life Sciences entities, guardians of invaluable intellectual property, aren’t spared either. They too are prime targets for AI adversaries. Simply, any entity handling confidential data, especially those with deep pockets, is in the line of fire.

Proactive Defense Strategies:

Over the past several years, the world has seen numerous case studies on how these AI-driven cyber threats can impact a business, even Fortune 500 companies. In the face of these threats, businesses must adopt a comprehensive and proactive defense strategy. Here are a few of the most recommended strategies and how companies could have better utilized them.

Continuous Monitoring and Real-time Threat Detection:

Implementing systems that continuously monitor network traffic and user behavior can help in early detection of any anomalies. Real-time threat detection can alert IT teams immediately, allowing them to act before significant damage occurs.

For example, T-Mobile experienced data breaches in May and January 2023. Had a more robust real-time threat detection system existed, the breaches might have been detected and mitigated sooner.

Advanced AI Defense Strategies:

Utilizing AI to counteract AI-driven threats can be an effective strategy, but too few companies are taking the time to implement these tools proactively. AI can predict potential attack vectors and strategies that hackers might use, preparing businesses for the next big attack.

In another case, Latitude Financial experienced a massive breach in March of 2023, compromising over 14 million records. Advanced AI defense strategies could have predicted the attack vectors used against the company.

Employee Training and Awareness:

Regularly training employees to recognize potential AI-driven cyber threats like phishing emails or suspicious links can prevent the most sensitive area of cybersecurity, the human element. While typos and grammatical mistakes were once a clear indicator of phishing, AI can quickly fix these issues and even make the phrasing more compelling to act. That’s why informed and vigilant employees are often the first line of defense.

Case in point: MailChimp faced a data breach in 2023. Hackers obtained employee credentials, allowing them access to Mailchimp’s support and admin platforms. Such breaches often start with a single employee clicking on a malicious link. However, social engineering tactics can be much more effective. Regular training could reduce such risks.

There are two other examples: MGM and Ceasar’s, who faced a similar breach that occurred earlier this year, both of which started with a simple phone call to the support desk.

State-of-the-art Cybersecurity Tools:

Employing the latest cybersecurity tools that offer multi-layered protection, including firewalls, intrusion detection systems, and encrypted/blockchain communication, can form a robust defense against some of the more common threats.

A lesson Verizon learned after having records of over 7 million users posted on a hacker forum in March 2023. Using state-of-the-art tools could have prevented unauthorized access since, according to their year’s report, 74% of breaches began through human error, social engineering or misuse.”

Incident Response Plan:

A well-documented and practiced incident response plan ensures that when a breach occurs, the organization can swiftly mitigate damage, communicate with stakeholders, and recover data.

Likewise, MOVEit, a File Transfer and Automation Software company faced a significant data breach in June of 2023. The breach impacted over 200 companies that utilized the platform, including the Department of Energy and schools across the US. The result is a security vulnerability in their software. These vulnerabilities can be impossible to predict. However, an effective incident response plan could have minimized the impact and duration of the breach.

Conclusion:

The integration of AI in cybersecurity is a double-edged sword. While it offers enhanced protection mechanisms, it also presents new challenges as cybercriminals harness its power for malicious intent. As we navigate this new frontier, the importance of continuous learning, adaptation, and proactive defense cannot be overstated.

Concerned about AI-driven cyber threats? Contact Coretelligent today and fortify your defenses.

by

Protecting Your Assets: Lessons from the MGM & Caesar’s Recent Cyberattack

In our rapidly evolving digital landscape, the significance of airtight cybersecurity is paramount. The recent incidents at MGM & Caesar’s highlight this urgency.

The Incident

MGM faced operational hiccups when slot machines and hotel room key cards went haywire. Likewise, Caesar’s experienced a breach, exposing sensitive data like driver’s license numbers and social security details of their loyalty program members. The shocking part? A phone call to the casino’s helpdesk was the entry point.

These establishments were seemingly on the radar of ransomware-as-a-service (RaaS) groups ALPHV/Blackcat and Scattered Spider. These groups adeptly used social engineering tactics to infiltrate, specifically targeting the company’s Okta platform, a popular identity and access management (IAM) provider for the cloud.

Their Tactics

The attackers claimed to have breached MGM’s systems by accessing the company’s Okta Agent, which connects to an organization’s Active Directory. After gaining access, they lurked around, collecting passwords, and subsequently launched ransomware cyberattacks on a massive scale. The ALPHV group has even threatened further action if their demands aren’t met.

Okta’s chief security officer, David Bradbury, acknowledged the cyberattack’s social engineering component. He emphasized that while the human aspect of the attack was straightforward, the subsequent stages were intricate. Bradbury also highlighted the importance of adding a visual verification step for high-access privilege users to prevent such breaches.

The MGM attack is resulting in daily losses of $8 million for the casino. This underscores that even seemingly secure organizations can still fall prey to cybersecurity breaches. The continued success of social engineering as a tactic demonstrates that humans are often the weakest link in the chain.

How to Fortify Your Defenses

This recent incident has left companies asking themselves if they are safe from similar attacks. Coretelligent emerges as a beacon of trust and reliability in this tumultuous cybersecurity climate. Episodes like this are more prevalent than ever, and we’re constantly making sure to analyze point by point where things could have been improved, even for victims who are not our clients. Learning and growing from every new event is part of what makes us a trusted organization in the cybersecurity space. That’s why we’ve outlined some of the solutions we offer to help prevent an attack like these for our clients.

Let us fortify your defenses with the following:

CoreArmor

  • Real-time Monitoring: Detect unusual IT system activities, thwarting unauthorized access.
  • 24×7 US-based SOC: Our cybersecurity experts are always on standby, ready to neutralize threats.
  • Incident Response: Swift actions to curtail and mitigate security breaches.
  • Penetration Testing & Reporting: Identify vulnerabilities proactively, ensuring they’re addressed before exploitation.
  • End-user Security Awareness Training: Arm your employees with the knowledge to sidestep potential cyber threats.

CoreComply

  • Managed Security Controls: A holistic approach to security controls, from access control reviews to ensuring no accounts are overprovisioned.
  • TPRM Program Development: Our team delves deeper than just compliance checkboxes, ensuring a comprehensive vendor categorization based on data criticality.
  • Hyperproof: A continuous compliance management tool.
  • RiskRecon: A vigilant eye on external cyber hygiene and third-party risks.
  • Risk Assessment: Comprehensive analysis and mitigation of potential compliance gaps.

Take Action

We’re offering a free Risk Assessment, your first step towards unparalleled security, compliance, and risk management. Join the ranks of thousands who’ve bolstered their defenses with Coretelligent.

risk assessment

by
what is third party risk management

What is Third-Party Risk Management?

As business operations become increasingly complex and interconnected, third-party risk management (TPRM) is no longer optional.

what is third party risk management

You Are Only as Safe as Your Vendors

Companies rely heavily on third-party vendors, suppliers, and partners to perform critical functions in today’s business landscape. A recent study reports that 71% of organizations have seen their third-party networks increase in the last three years. While these relationships can drive growth and efficiency, they also introduce potential risks that need to be carefully managed.

What is Third-Party Risk Management?

Third-Party Risk Management refers to the strategies and processes used to identify, assess, and mitigate risks from doing business with third-party entities. These external entities can include suppliers, vendors, contractors, affiliates, or any other organization your business interacts with.

The risks associated with third-party relationships can be varied, ranging from operational and financial risks to reputational and legal risks. For instance, if a vendor suffers a data breach, your company could be exposed to operational risks, financial losses, regulatory penalties, reputational damage, lawsuits, and even dissolution.

The Importance of TPRM in Today’s Business Environment

In recent years, high-profile incidents have highlighted the significant risks that third-party relationships can pose. 59% of organizations reported experiencing a data breach caused by a third party, with 54% reporting breaches within the last 12 months.

The consequences of not effectively managing third-party risks can be severe, from data breaches involving third-party vendors to operational disruptions caused by supplier failures.

Furthermore, regulatory bodies are increasingly focusing on third-party risk management. Data regulations like HIPAA, SEC, CCPA, and the New York Shield Act, among others, include requirements for data protection that require robust third-party risk management practices in place.

Implementing Effective TPRM: Key Steps for Business Executives

Effective third-party risk management requires a strategic and proactive approach. Here are some key steps that business executives should consider:

  1. Conduct Thorough Due Diligence: Before engaging with a third party, conduct a comprehensive due diligence process to understand their capabilities, reliability, and track record. This process includes assessing their financial stability, compliance status, and cybersecurity measures.
  2. Establish Clear Contracts: Ensure your contracts with third parties clearly outline roles, responsibilities, and expectations, including defining performance metrics, data protection requirements, and penalties for non-compliance.
  3. Regularly Monitor Third Parties: Continuous monitoring of your third parties is crucial for detecting and responding to potential risks promptly. Implement regular audits, performance reviews, and compliance checks.
  4. Develop a Response Plan: Have a contingency plan in place to respond to incidents involving third parties. This plan should include steps for mitigating damage, notifying stakeholders, and resolving the issue.
  5. Leverage Technology: Utilize technology solutions to streamline your TPRM processes. This can include a solution that will automate due diligence, monitor third-party performance, alert you to potential risks, as well as strategic guidance.
  6. Conduct a Risk Assessment: Regularly review your third-party relationships to identify any potential risks and address them promptly.

The reality of today’s digital ecosystem means that third-party risk management is a critical aspect of modern business strategy. By understanding the potential risks and implementing effective solutions, business executives can protect their organizations, enhance operational resilience, and drive sustainable growth.

DOWNLOAD THE FREE GUIDE → Comprehensive Guide to Third-Party Risk Management

 

by

Cost of Cyber Attacks: One Company’s Worst-Case Scenario

Cyber attacks are becoming increasingly common, and cybercriminals see small to medium-sized businesses as prime targets. The devastating consequences of a cyber attack can be long-lasting and far-reaching, as demonstrated by the chilling story of Expeditors, a logistics company that fell victim to a ransomware attack in 2022 and discovered the true cost of cyber attacks.

[ez-toc]

cost of cyber attacks

The Immediate Effects of Expeditors’ Cyber Attack

The ransomware that hit Expeditors left their data and infrastructure at risk, forcing them to halt operations. The immediate effects of the attack were catastrophic, resulting in $47 million in lost revenue, overages, and payouts to customers. Additionally, the company spent $18 million on remediation and recovery efforts, further impacting its bottom line.

Ongoing Impacts: The 2023 iRobot Lawsuit

The fallout from the cyber attack didn’t end with the initial shutdown. In February 2022, Expeditors CIO Christopher J. McClincy said, “The cyber-attack limited our ability to arrange shipments or manage customs and distribution activities, or to perform certain accounting functions, for approximately three weeks after the attack.” Later in the statement, he added, “We continue to navigate residual effects.”

Then in 2023, the company was hit with a lawsuit from iRobot, one of their biggest customers. The lawsuit claims “Expeditors’ own inattentiveness and negligence exposed its systems to attack, and Expeditors lacked and/or failed to implement the necessary business continuity plan to ensure that it could continue providing services to iRobot.”

This legal action added to the ongoing financial impact faced by the company and reignited news stories about the attack—likely impacting the company’s reputation with potential clients, current clients, partners, investors, and other stakeholders.

What’s Your Risk Exposure?

The story of Expeditors should serve as a stark example of the increasing threat that cyber attacks pose to all businesses, but especially to small and mid-sized companies. According to a recent report, 47% of all U.S. businesses suffered some kind of cyber attack in 2022. At the same time, another report found that companies with less than 1,000 employees are three times as likely to be the target of a cyber attack as larger businesses like Expeditors.

Cybersecurity experts say that it’s not if a company will be a target, but when. In fact, a study of penetration testing results found that cybercriminals can penetrate 93 percent of company networks.

Invest in Proactive Measures

Small to medium-sized businesses are seen as easy targets by criminals since they often invest less in cybersecurity and lack security expertise. Cybercriminals understand this and take advantage of these weaknesses, using techniques like phishing, malware, ransomware, and other malicious tactics to gain access to sensitive data or disrupt operations. As a result, it is essential for businesses to invest in robust cybersecurity solutions that can help protect them from cyberattacks.

However, according to the Cyberspace Solarium Commission, many “cybersecurity budgets at U.S. organizations are increasing linearly or flat” when they should be growing in response to the exponential growth of cyber threats.

Best Practices to Mitigate the Risk from Cyber Attacks

Investing in multi-layered cybersecurity is the surest way to keep you and your company out of the headlines. By implementing cybersecurity solutions utilizing best practices, businesses can significantly reduce the likelihood and severity of a cyber incident.

Some key strategies include:

  1. Investing in robust security solutions: Deploying firewalls, real-time monitoring, and intrusion detection systems can help identify and prevent unauthorized access to your network and data.
  2. Regularly updating and patching systems: Keeping software and systems up to date ensures protection against known vulnerabilities, making it more difficult for cyber criminals to exploit your systems.
  3. Implementing strong access controls: Restricting access to sensitive data and systems through multi-factor authentication and the principle of least privilege minimizes the risk of unauthorized access.
  4. Educating employees on cybersecurity best practices: Regular training on topics such as recognizing phishing emails and creating strong passwords can reduce the risk of employees inadvertently compromising your network.
  5. Developing a comprehensive incident response plan: A well-defined incident response plan outlines the steps to be taken during a breach, including containing the incident, assessing the damage, and recovering from the attack.

By learning from the Expeditors case study and prioritizing cybersecurity, businesses can better protect themselves from the devastating consequences of cyber attacks and ensure long-term success. Protect your business from cyber threats with a comprehensive security risk assessment that can help identify any areas of vulnerability and provide guidance on best practices to shield your organization.

by
Cybersecurity for RIAs

RIA Cybersecurity: Prepare for New SEC Cybersecurity Requirements (2023)

Last year the Securities and Exchange Commission (SEC) voted to implement new and amended SEC RIA requirements to the Advisers Act of 1940 for cybersecurity risk management for registered investment advisers (RIAs) and funds.

Is your firm ready?

[ez-toc]

sec ria cybersecurity requirements

The proposed SEC rule changes would oblige RIA firms to develop and implement written policies and procedures to reduce cybersecurity risks that could harm clients and fund investors. The proposed regulations would also force advisers to report cybersecurity incidents like data breaches involving client information to the SEC.

Additionally, the proposed changes call for publicly disclosing cybersecurity risks and significant incidents from the last two fiscal years in their marketing materials and registration statements.

“The proposed rules and amendments are designed to enhance cybersecurity preparedness and could improve investor confidence in the resiliency of advisers and funds against cybersecurity threats and attacks,” said SEC Chair Gary Gensler.

While comments initially closed in April 2022, comments were reopened on March 15, 2023. Once comments are fully closed, the finalized rules will most likely become effective later in 2023. We will be providing future updates once the final regulations are published.

What do the New SEC RIA Cybersecurity Requirements Entail?

The four significant proposed changes include the following:

  1. The proposal consists of new rule 206(4)-9 under the Advisers Act and new rule 38a-2 under the Investment Company Act. In addition, the proposed cybersecurity risk management rules require public companies to adopt and implement policies and procedures for identifying, assessing, and mitigating cyber risks.
  2. The proposal also includes a reporting requirement under new rule 204-6 mandating companies report significant cybersecurity incidents affecting the adviser, its fund, or private fund clients.
  3. The updated rules include changes to Form ADV Part 2A requiring advisers and funds to publicly disclose cybersecurity risks and significant cybersecurity incidents that occurred in the last two fiscal years in their brochures and registration statements.
  4. The proposal also includes new recordkeeping requirements under the Advisers Act and Investment Company Act Rule 204-2 to improve the availability of cybersecurity-related information and help facilitate the Commission’s inspection and enforcement capabilities.

RELATED CONTENT → Security vs. Compliance: Differences & Similarities

What Can You Do to Prepare for RIA Cybersecurity Enforcement?

Here are some expert tips on being ready for enforcement when the changes go into effect later this year.

  •  Develop and Implement Policies and Procedures

RIAs and funds must create comprehensive cybersecurity policies and procedures to mitigate cybersecurity risks per the proposed rules. Keep in mind that these policies and procedures must be both compliant and actionable.

  • Conduct a Risk Assessment

Evaluate cybersecurity risks by identifying, categorizing, and prioritizing cybersecurity risks related to your systems and operations. By conducting an effective risk assessment, you’ll have the necessary information to develop compliant policies and procedures to combat potential cybersecurity risks.

  • Prepare for Disclosure Obligations

When it comes to disclosures associated with cybersecurity risks or incidents, develop procedures for clear, accurate, and timely disclosures to the SEC, clients, investors, and other market participants.

  • Continuity Planning

In the event of a cybersecurity incident, you must be able to maintain system operations. So, test your incident response and business continuity plans through tabletop exercises to ensure compliance with the requirements.

  • Reporting and Documentation

Employing a governance, risk, and compliance (GRC) solution will ensure you have well-documented evidence that your cybersecurity program is compliant.

In addition to ensuring that your firm will align with the changes, these suggestions are also considered best practices for mitigating the risks from data breaches and other cyber attacks. Following these and other practices makes good sense whether your firm is required to or not.

To learn more about GRC, download our free guide →  Understanding Governance, Risk Management, and Compliance for Financial Services.

By employing these practices, you’ll be ready for any forthcoming changes to cybersecurity regulations and well-protected against potential security threats. One solution for preparing now or later is to work with an experienced and knowledgeable IT service provider. An IT partner experienced with RIA firms, and one employing robust cybersecurity and compliance solutions can reduce the time and resources it takes to comply with and implement these and other cybersecurity compliance standards.

by
security vs compliance

Security vs. Compliance: Differences & Similarities (2023)

Security and compliance are often used interchangeably in IT, but that is actually a misnomer as they are not equivalent. So, just what are the differences between security vs. compliance?

[ez-toc]

security and compliance

Security Vs. Compliance

In understanding security vs. compliance, it’s important to recognize that they are both equally important but for varying reasons. Whereas security drivers are related to mitigating business risks, compliance drivers are regulatory or legal in nature. Compliance and security have similar objectives around managing risks and securing sensitive data and systems. However, they have different processes and workflows to accomplish these goals.

Compliance involves applying regulatory standards to meet contractual or third-party regulatory requirements.  In contrast, security constitutes the implementation of adequate technical controls to protect digital assets from cyber threats.

Still, again, they are similar but not equal. So why is the distinction between security and compliance important? It is significant because implementing one without the other could lead to devastating consequences for your company.

Cybersecurity

That’s the motivation behind implementing cybersecurity—the desire to protect the confidentiality, integrity, and availability of company assets through security controls and best practices.

IT security is unique to each organization—the measures set by one entity may be entirely different from those of another. Security focuses on comprehensively mitigating any risk that may threaten an organization’s data confidentiality, availability, and integrity—it relates to all the electronic and physical data of an organization and not just those covered by compliance.

We don’t walk around with our bank account or social security numbers on our foreheads—that would be reckless. Instead, we do our best to secure sensitive information from individuals who want to steal it because securing valuable data is a prudent action to reduce the associated risks of identity theft and drained bank accounts.

Cybersecurity acts the same way. Recognizing the risks, smart business leaders choose to secure assets to protect their business from harm and keep their business. The fallout from inadequately securing business assets can lead to loss of business revenue, costly lawsuits and settlements, theft of intellectual property and proprietary information, reputational loss, inability to operate, and business shutdown.

Related Content →  Evaluate your security readiness with our  Cybersecurity Checklist.

Compliance

The confusion between the two functions arises because the outcomes from implementing compliance measures often overlap with implementing security measures. However, the motivation behind organizational compliance is to ensure that obligations and requirements are satisfied to avoid negative consequences and ensure business viability.

These external compliance requirements and standards include a range of often intersecting and complicated networks of government, industry, financial, and even customer requirements. Cybersecurity is often a small part of a greater set of requirements. Examples include:

  • Self-regulatory organizations like PCI Security Council (PCI DSS) and Financial Industry Regulatory Authority (FINRA)
  • Governmental bodies like the U.S. Securities and Exchange Commission (SEC)
  • Government regulations, including Gramm-Leach-Bliley Act (GBLA), FTC Safeguard Rule, Sarbanes-Oxley (SOX)
  • Privacy standards, including HIPAA/HITECH, GDPR, CCPA
  • Technical Standards and Certifications, including ISO27001, SOC2
  • Control frameworks, including NIST CSF, CIS Critical Security Controls
  • Client SLAs
  • Due Diligence requests (DDQ)
  • And more depending on your industry and other factors.

Looking at the worst possible outcomes, the legal and financial ramifications of non-compliance with these and other standards would lead to your organization paying hefty fines and penalties, facing costly lawsuits, being blocked from working in certain locations and industries, not being able to take payments, loss of financing and investors, not being able to acquire insurance, and more.

Related Content → What is Governance, Risk, and Compliance?

Security vs. Compliance the Big Picture

The reality is that neither IT security nor compliance lives in a vacuum. Instead, they are complementary—symbiotic even. They successfully function from a mutually beneficial association that enhances and reinforces the benefits of each other. One without the other would be like trying to make water without oxygen or hydrogen.

Being compliant with a specific set of standards is not the same as having an effective and robust information security system. Compliance simply measures whether your security protocols meet a given set of one-size-fits-all security standards at a given point in time.

A robust security system makes it easier for an organization to meet compliance standards since most of the needed controls will already be in place. All that would remain to attain compliance would be documentation work and adherence to industry-specific policies.

It’s All About Managing Risk

The real question every business leader should be asking is how to leverage both security and compliance to reduce exposure and risk. Compliance establishes a comprehensive baseline for covering an organization’s overall posture. At the same time, security practices build on that baseline to ensure that the business is protected from every angle.

It’s all about risk. Or, more accurately, reducing risk. And security combined with compliance is the one-two punch every business needs to minimize risk and protect assets.

For companies of any size, Governance, Risk, and Compliance (GRC) is about aligning cyber and information technology with business objectives, while managing risk and meeting regulatory compliance requirements. Therefore, an effective GRC strategy is essential because it pulls together the complexity of various risk, compliance, and governance functions into a single strategy.

Successful companies address cyber risk in a business context. From that point of view, avoiding fines and data breaches are preferable. In establishing and implementing compliance and security, smart leaders treat them as a risk-management concern and not just an “IT problem.” Integrating your security and compliance teams into your risk assessment program will lead to mutually assured success.

Additionally, certain industries, like financial services and life sciences, have overlapping requirements originating from a variety of sources which can make fore a complicated matrix to follow. Working with an IT vendor who specializes in your particular industry is ideal to ensure compliance across all regulations.

Choosing the right security and compliance solutions is also critical. Operating with a “checkbox” approach to either compliance or security will lead your organization toward a rocky future. Instead, focus on developing and adhering to robust policies and choosing the right solutions based on your industry needs, risk assessment, and business goals to satisfy and streamline your compliance and security activities.

by
Data Breach Detection

Breach Detection: Could You Detect a Data Breach?

With the increasing reliance on technology in today’s business world, the risk of data breaches is at an all-time high, making breach detection a crucial factor in protecting sensitive data.

Data Breach Detection

Detecting a data breach early on can help organizations limit the damages, preserve their reputation, and prevent further unauthorized access to their systems. Despite this importance, many businesses struggle to identify data breaches as they happen, only realizing something is wrong when it’s too late. We outline some helpful insights about the importance of breach detection and the strategies they can adopt to improve their breach detection capabilities to protect their business before, during, and after a data breach.

Causes of a Data Breach

A variety of factors can cause a data breach, including human error, malicious attacks, and software errors. Human error includes misconfiguring security settings or sending sensitive data to the wrong recipient. Malicious activities, such as ransomware attacks or phishing scams, are escalating and increasing in frequency and can lead to unauthorized access to sensitive information or data loss. Additionally, software system errors or vulnerabilities can provide entry points for attackers to exploit.

The growing reliance on third-party vendors and the complexity of supply chains have also increased the potential for supply chain attacks, where attackers target a third-party vendor’s systems to get access to valuable information. Therefore, understanding the causes of data breaches is vital for businesses to identify vulnerabilities and implement appropriate security measures to prevent them.

Data Breach Detection

The majority of data breaches are discovered by external sources, meaning that an external entity, rather than the affected business, was the first to recognize the breach. This makes it clear companies need to improve their data breach detection systems to monitor and detect potential breaches in real time.

With so many data breaches occurring every day, it’s critical for organizations to stay vigilant and invest in the latest technologies, and to detect potential breaches as soon as possible. By prioritizing breach detection and response, businesses can mitigate the damage caused by a breach, protect their customers’ data, and maintain their reputation.

Identifying High-Value Data

Identifying and securing high-value data is critical in protecting sensitive information from unauthorized access, loss, or theft. High-value data can include business trade secrets, intellectual property, financial information, personally identifiable information, and other sensitive information that could harm your business or customers if leaked or breached. To identify high-value data, a company must conduct a thorough inventory of data assets, categorize data based on sensitivity, and apply appropriate security controls to protect it from unauthorized access.

Effective security controls should include access controls, encryption, multi-factor authentication, and data loss prevention tools. Protecting high-value data may require additional resources and investment, but the potential cost of a data breach can be devastating. By prioritizing data protection for high-value data, businesses can minimize the risks associated with a data breach and build a trusted reputation with their customers.

Active Monitoring Processes

Active monitoring processes are essential for preventing data breaches and protecting sensitive information from unauthorized access. Active monitoring involves continuous monitoring of a system’s security posture to identify potential threats, suspicious activities, or vulnerabilities. By proactively monitoring networks, applications, and data usage, businesses can quickly detect and respond to security incidents before they become full-blown breaches.

Active monitoring processes can include but are not limited to, security information and event management (SIEM) solutions, intrusion detection and prevention systems, network and endpoint protection tools, and data analytics platforms. These tools provide a holistic view of the organization’s security posture and enable businesses to take timely action against probable security threats. Through active monitoring and timely response, organizations can prevent data breaches, protect sensitive information, ensure compliance, and maintain their reputation.

Rapid Remediation After a Data Breach

Rapid remediation is a crucial step in limiting the damage caused by a data breach. Once a breach has been detected, acting quickly and decisively to contain it and minimize the harm is essential. Rapid remediation strategies may include, among others, isolating affected systems, disabling breached accounts or systems, restoring from backups, identifying and removing malware or other malicious software, and conducting forensic analysis to determine the extent and root cause of the breach. The ultimate goal of rapid remediation is to lessen the severity of the breach and protect sensitive data from further exposure.

By responding to a breach quickly, businesses can reduce their financial and legal liabilities, safeguard their reputation, and mitigate operational disruptions. Effective remediation requires a well-defined incident response plan, including clear roles and responsibilities, thorough documentation, and continuous improvements in response to changing threat landscapes.

In conclusion, data breaches are becoming more sophisticated and prevalent, making breach detection an essential component of data protection strategies. Therefore, organizations must stay up to date with the latest technologies and adopt a multilayered approach to cybersecurity, including monitoring, training, and incident response planning.

Related Content

Looking to evaluate your organization’s current security coverage? Use our Cybersecurity Evaluation Checklist to help you appraise your firm’s cybersecurity readiness. This checklist is a jumping-off point to help your enterprise determine its ability to mitigate the risk of cyberattacks before it is too late.

Cybersecurity Checklist

 

Only by adopting a proactive, comprehensive approach can organizations hope to prevent significant breaches, mitigate their impact, and protect sensitive data. However, when it comes to data breaches, it’s not a matter of if but when. Therefore, businesses must continuously assess their IT security posture and adopt proactive measures to detect and respond to potential breaches. Only then can they safeguard sensitive data, ensure compliance, maintain operations, avoid liability, and avoid the headlines.

by