APRA CPS 234 – Regulator warns a significant cyber breach is only a matter of time
APRA CPS 234, the new Australian Prudential Regulatory Authority (APRA) Prudential Standard came into effect on 1st July 2019. The prudential regulator has warned businesses not to be complacent; 36 breach notifications have been received in the first four months of the new regime.
APRA CPS 234 – the impact
There is no doubt that the financial services organisations would have been targets of a much greater number of attempted cyber-attacks. APRA board member Geoff Summerhayes comments that:
“These are just the ones that succeeded – and that we know about. With some cyber incidents taking years to detect, it’s entirely possible that one of the banks, insurers or super funds has been compromised and we simply don’t know about it”.
Improve your cyber resilience and meet regulatory obligations
Here are some key steps to simplify the enormous task of improving your organisation’s cyber resilience.
Step 1 – Benchmark your current compliance level
In order to develop a plan to build and maintain cyber resilience, organisations must first baseline their current status and establish any “compliance gaps”.
Worryingly, APRA noted that 70 per cent of regulated entities self-reported their “compliance gaps” against the new regulation. This is a big number, particularly given the subjective nature of any self-assessment.
The Australian National Audit Office (ANAO) found a similar level of cyber resilience across 14 non-corporate Commonwealth entities: only four entities (29 per cent) had complied with mandatory government requirements for information security. You can read the full report here:
Why is the task so difficult?
The cyber security landscape is changing all the time, an environment can be compliant one day and exposed the next.
The number of breaches evidenced across the almost 600 APRA CPS 234 regulated entities in the past four months is not alarming in itself. However, as Mr Summerhayes says, it reveals “areas of common weakness” many of which APRA had “called out repeatedly”. “For example, we have identified basic cyber hygiene as an ongoing area of concern” he said.
Choosing a policy framework you can implement
APRA CPS 234 states that entities must maintain an information security policy framework and controls commensurate with the criticality and sensitivity of information assets and their exposure to vulnerabilities and threats.
A chosen framework needs to be both effective and practical; if you can’t implement it or monitor compliance with it, you won’t fulfil regulatory obligations. A systematic means of regularly measuring compliance against an effective security framework or set of controls is a good basis upon which to start.
The Essential Eight security controls
The Essential Eight Framework, created by Australian Government, is a prioritised list of just eight key security controls organisations can implement to better protect their systems against a range of adversaries. The Australian Signals Directorate (ASD) found that when assessed to be operating effectively, the top four alone mitigate 85% of targeted cyber-attacks.
Step 2 – Test control effectiveness
The APRA CPS 234 standard requires that an organisation must test the effectiveness of its information security controls through a systematic testing programme. It must escalate and report to the Board or senior management any testing results that identify information security control deficiencies that cannot be remediated in a timely manner. By utilising a recognised set lead indicators or security controls like the ACSC Essential 8 Framework your level of resilience can be regularly tested against your regulatory obligations.
Regulatory Technologies (RegTech) have emerged and evolved to monitor and report on the efficacy of important security controls. They can operate automatically and continuously to alert upon any changes in security controls status to provide your security team with the time critical information they need to investigate and resolve incidents. You can read more on RegTech in our blog post here: https://www.huntsmansecurity.com/blog/regtech-and-cyber-security-compliance/
Step 3 – Execute objective, accurate internal audits
The demands of the new standard don’t end with step 2. Entities are required to undertake audit activities that include reviews of the design and operating effectiveness of information security controls, including those maintained by related parties and third parties. This is an enormous task for any organisation; that is why a systematic methodology for the measurement and reporting of resilience is so important.
As with step 2, testing of control effectiveness, RegTech can assist your organisation in fulfilling its requirements. The technology operates as an excellent tool for your security team to execute a systematic and objective cyber risk audit. The business can dynamically measure and understand its own cyber risk and free up enough time to do something about it. Moreover, you can use RegTech to audit the resilience of third party suppliers and establish a cyber trust index to identify resilient supply chain partners.
RegTech and digital transformation
Your business’s cyber resilience can change quickly. It is no coincidence that regulatory bodies around the world are seeking greater transparency and timely risk information as to the cyber posture of regulated entities.
Cyber risk is becoming ubiquitous. By automating the monitoring and reporting of security control effectiveness organisations, particularly those operating critical infrastructure, can clearly visualise and report on their current cyber risk exposure while simultaneously targeting resources to resolve cyber issues that matter.