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Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.

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September 4, 2018


The First Step in Risk Management

One of the main objectives of information security is having a solid risk management strategy, which involves several areas: policy, compliance, third-party risk management, continuous improvement, and security automation and assessment, to name a few. This diagram illustrates at a high level the full cycle of a risk management strategy: adopting and implementing a framework or standards, which leads to conducting effective risk assessments, which then leads to maintaining continuous improvement.

Chart-image

One of the main objectives of information security is having a solid risk management strategy, which involves several areas: policy, compliance, third-party risk management, continuous improvement, and security automation and assessment, to name a few. This diagram illustrates at a high level the full cycle of a risk management strategy: adopting and implementing a framework or standards, which leads to conducting effective risk assessments, which then leads to maintaining continuous improvement.

There are more than 250 different security frameworks globally. Examples include the National Institute of Standards and Technology's (NIST) Framework for Improving Critical Infrastructure Cybersecurity, the Capability Maturity Model Integration (CMMI)®, and the Center for Information Security's Critical Security Controls. (In addition, many industries have industry-specific standards and laws, such as health care's HIPAA, created by the Health Insurance Portability and Accountability Act.) Each framework is essentially a set of best practices that enables organizations to improve performance, important capabilities, and critical business processes surrounding information technology security.

But the bad news is that, on average, 4 percent of people in any given phishing campaign open an attachment or click a link—and it takes only one person to put a company or even an industry at risk. Does your overall strategy address that 4 percent and have a plan in place for their clicks? The report also found that the more phishing emails someone has clicked, the more they are likely to click in the future.

So, outside of complying with legal and regulatory requirements, how do you determine which framework or frameworks to adopt?

It depends! A Tenable Network Security report, Trends in Security Framework Adoption, provides insight into commonly adopted frameworks as well as the reasons companies have adopted them and how fully. Typically, organizations first consider security frameworks that have a strong reputation in their industries or for specific activities. They then look at compliance with regulations or mandates made by business relationships.

This chart shows reasons organizations have adopted the popular NIST Cybersecurity Framework.

Improving-critical-infrasture-cybersecurity-graph

The study found that there is no single security framework that the majority of companies use. Only 40 percent of respondents reported using a single security framework; many reported plans to adopt additional frameworks in the short term. Close to half of organizations (44 percent) reported they are using multiple frameworks in their security program; 15 percent of these are using three or more.

This year, the Federal Reserve System's Secure Payments Taskforce released Payment Lifecycles and Security Profiles, an informative resource that provides an overview of payments. Each payment type accompanies a list of applicable legal, regulatory, and industry-specific standards or frameworks. Spoiler alert: the lists are long and complex!

Let me point out a subsection appearing with each payment type that is of particular interest to this blog: "Challenges and Improvement Opportunities." Scroll through these subsections to see specific examples calling for more work on standards or frameworks.

Organizations need choices. But having too many frameworks to choose from, coupled with their constantly changing nature and the fluid payments environment, can complicate the implementation of a risk management strategy. With so many choices and so much in flux, how did you manage with step one of your risk management strategy?

Photo of Jessica Washington By Jessica Washington, AAP, payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed

September 4, 2018 in consumer protection , cybercrime , cybersecurity , payments risk , risk management | Permalink

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