Three Things I’ve Learned About Credit Union Risk Management

I have been working with Credit Unions for more than 20 years and have done a wide variety of information security and risk management work over that time. I’ve worked with technical teams, management and boards over the span of more than two decades. Here are three things I’ve learned about how CUs manage risk during that time. 

1) Most credit unions that I’ve worked with care just as much, if not more, about information security than most of the regional size banks they often compete with.

I’ve heard more than one CU leader tell me that they have to be better than the banks, because when a bank gets hacked – that bank makes the news and feels the impact. However, he said, when a credit union gets hacked – all credit unions suffer from the bad press. I am not sure the data supports his claim, but it’s an example of how CUs often focus on working together to solve big problems, and put a lot more attention to detail into it.

2) Many of the credit unions I have worked with look at information security and threat awareness as something that they can offer to their members (“customers, in bank speak”).

More than a few of the CUs have engaged so deeply with their customers on phishing and identify theft, that they include them in discussions about what products and services the CU buys. They do trials, include members in beta-tests and I’ve even seen them do onsite training for how to use new multi-factor authentication tools – even ones that weren’t in use at the CU – just to help make the members more secure and reduce the threat of password re-use across personal sites.

3) The board is often more involved in the risk management process at my CU clients than my banking clients.

The NCUA has taken a lot of steps to increase board member awareness about information security, and it often shows at credit unions. Several times a year, I am asked to present threat updates or review the information security program of a CU, specifically with a presentation to the board in mind. I am often engaged as a third party, to spend a couple of days looking at a security program and reporting to the board on it’s maturity and areas of potential improvement.

During these board sessions, it is not uncommon for the board questions to last more than an hour, after the presentation has completed. The point is, most CU boards that I have worked with are deeply engaged in thinking about risk management at the credit union.

For those of you interested in more about risk management at credit unions, here are some of the best sources, which I refer to often in my presentations:

  • Credit unions also face such internal risks as internal fraud, legal and regulatory noncompliance, data breaches, and injuries to staff and visitors. (boardeffect.com)
  • The bottom line: Figuring out the risk appetite will help guide credit unions to create realistic and measurable risk guidelines. (visibleequity.com)

  • We have helped Credit Unions develop risk appetite statements and risk frameworks and can work with your Credit Union to develop the documentation you require. (creditunionupdate.com)

If you’d like to learn more about MSI and our work with credit unions, just drop us a line (info@microsolved.com) or give us a call (614-351-1237) and we’d be happy to talk about how we might be able to help your credit union excel in IT risk management.

Auto Dealerships: is Your Private Information Safe?

When you think about it, automobile dealerships can have a lot of very detailed and private information about you. For example, when you buy a car, the dealer may collect your identity and location information (name, address, telephone number, email address and even information about family members and pets). If you finance the vehicle through them, they also may collect a great deal of financial information about you (Social Security Number, credit history, bank(s) you use, account numbers and credit rating). And, of course, they have detailed information about at least one of your vehicles such as make, model, accessories, vehicle identification numbers, etc. All of this information is very desirable to cyber-criminals and hackers.

Not only do auto dealerships have a lot of your private information, the nature of the business gives online and on-site attackers numerous opportunities to access and compromise this information. Employees and customers move about a great deal in automobile dealerships often leaving their work areas unattended. There are numerous workstations around a dealership from the parts department to the service department to the finance department to the sales departments. If users share their passwords with fellow employees for convenience sake or leave their computers active when they are away from them, compromise of private information is made easy. In addition, auto dealership networks are usually connected to numerous service providers, partners and information systems. If these systems are compromised, then compromise of the dealership system could soon ensue. There are also liable to be paper documents containing private information that could be left exposed on desks or in unlocked drawers.

Luckily, auto dealerships that extend credit to someone, arrange for someone to finance or lease a car for personal, family or household use, or that provide financial advice or counseling to individuals are identified as financial institutions and are regulated by the Federal Trade Commission (FTC) under the Gramm-Leach-Bliley Act of 1999 (GLBA). These businesses therefore are required to comply with the FTC Privacy Rule and the FTC Safeguards Rule. Auto dealerships may also be subject to state or local ordinance, or some private regulatory body such as the PCI DSS. This is a good thing for the consumer.

Under the FTC Privacy Rule, dealerships are required to protect private customer financial information, and are required to provide customers with a number of written notices detailing their rights under the Privacy Rule. Under the FTC Safeguards Rule, dealerships must protect physical, paper and electronic customer information. They are also required to have an information security program designed to protect the confidentiality, integrity and availability of private customer information. Since dealerships are considered to be financial institutions, these security requirements are much the same as those your bank must adhere to. There are fines in place for failure to comply with these regulations, and lawsuits may also be filed against dealerships that fail to adequately protect your private information.

Although these regulations don’t guarantee your private information won’t be compromised, they do put a big roadblock in the path of information thieves. Plus, auto dealers know that 84% of those surveyed said they wouldn’t do business with a dealership that has had a customer data breach incident. That surely helps inspire dealers to take information security seriously.

The New MicroSolved 80/20 Rule of Information Security

In 2009, there was a big effort on the Federal level to establish a consensus among a varied group of information security experts from all sectors as to which information security controls were most effective in the modern computing and networking environment. This was driven by the perception that the Federal Information Security Management Act (FISMA) was ponderous and unable to effectively protect the confidentiality, integrity and availability of private information.

This effort initially led to the publication of the 20 Most Important Controls for Continuous Cyber Security Enforcement: Consensus Audit Guidelines. It also stimulated thinking among organizations and information security professionals about possible variations and adaptations of this guidance. One such effort was the MicroSolved 80/20 Rule of Information Security (2009). While very similar to the Consensus Audit Guidelines, the focus of the 80/20 Rule was to establish a group of security control projects that provided the most “bang for the buck” for the small and medium-sized organizations that don’t typically have the resources of the Federal Government or other large organizations.

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Phishers Continue to Capitalize on Covid 19 Emergency

They say that every cloud has a silver lining. That has certainly been true for cyber-criminals during the Covid 19 emergency! While the country as a whole is experiencing 20% unemployment and general hardship, these folks continue to reap the rewards chaos inevitably brings to the larcenous. Here are some of the shenanigans that have darkened the news this week:

One article this week talks about “Hack for Hire” groups in India that are spoofing World Health Organization (WHO) emails to steal access credentials from businesses around the world (including the U. S.). These hacking emails come from hosted websites that are crafted to look like the official WHO website, and claim to provide direct notification from the WHO on Covid 19-related announcements. They are targeting financial services, consulting and healthcare organizations.

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Proper Network Segmentation & Configuration Control Keys to Resisting Ransomware

In the news this week was an article about a successful ransomware attack. It detailed how network access was achieved using email phishing and then went on to explain how the attackers leveraged this low-level network access to compromise the entire network. It was done by breaking password hashes in an attempt to gain access to local admin accounts, then trying these passwords on other hosts and domain administrator accounts. Compromise of a domain admin account then allowed the attackers to take control of the domain, which led to game over. This kind of attack scenario has been around for years and continues to work for a variety of reasons, two of which are inadequate network segmentation and configuration control.

Many of the networks we see are “flat.” In other words, there is no appreciable network segmentation in place. This woeful state of affairs allows any user on the network to see the entire setup, including “server space.” It also provides cyber criminals with many attack surfaces and helps them maneuver around the network. Such network implementations make it very difficult indeed to meet two of the hallmark principles of information security: need to know and least privilege.

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Crisis Highlights Need for MFA

Since World Password Day is the big news this week, there are a ton of study reports about password woes in the news. According to a Balbix study report, 99% of enterprise users reuse passwords either across work accounts, or between work and personal accounts. The report goes on to give statistics about password sharing, and states that the rapid uptick of remote working due to the Covid19 crisis has shifted the balance of control away from IT and towards employees.

Another report, released by SecureAuth, shows that management is worse than junior staff at practicing good password hygiene. Their survey states that 53% percent of people admitted to reusing passwords across multiple accounts. Among respondents using the same password, 62% said that they are using it across three to seven accounts; 10% said that they are using over 10 accounts with the same password. The article also highlights that people are so bad about this simply because keeping track of a number of different passwords is difficult and time consuming. Not to mention the fact that users need to change all those passwords regularly!

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Uptick in Covid19 Related Attacks Makes Strong Security Measures and IR Planning Even More Important

Every week during the last couple of months I have seen an ever-increasing number of cyber-attacks designed to exploit the present Covid19 crisis. Some recent instances include:

Fake websites that promise to provide vital information about Covid19 include videos that contain the Grandoreiro Trojan. Attempting to play the videos leads to a nasty and sophisticated payload being installed on visitor devices. A variety of techniques such as keystroke logging, blocking access to websites, unwanted restarts, access credential thefts and more are possible. This trojan is also very difficult to detect and remove.

Phishing emails supposedly from popular package carriers such as FedEx and UPS claim to be notifying customers about delivery delays due to a variety of reasons. These emails ask the recipient to open an attachment to fill in missing details or to follow links, but they actually contain the Remcos RAT or Bsymem Trojan.

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Security Measures Need to Tighten During a Pandemic

One thing that cyber-criminals love to see is businesses operating outside of their normal routines. Non-routine operations can cause confusion and chaos. New ways of operating must be developed and fielded on the fly. Personnel are often required to work from remote locations and may need to undertake duties that are new and unfamiliar to them. This is almost sure to cause IT personnel to become overwhelmed, which can cause delays that can seriously affect business operations.

And when it becomes a question of providing services or maintaining security, most businesses will opt for continuing services and dealing with security matters later. Such situations not only greatly increase the number of attack surfaces and vectors available for cyber-criminals to exploit, it also increases their chances of success in any given attack. The current pandemic situation has them all licking their chops!

Outside of war, I can’t think of more widespread and disruptive disaster scenario than a pandemic response of this magnitude. Unlike earthquakes or hurricanes or floods or most other catastrophes, pandemic interruptions are anything but localized; they affect virtually every business and person on the planet.

People are afraid of getting the flu, and of course they are also afraid of losing income and not being able to pay their bills. They fear that perhaps their employer companies will fold, and that they won’t be able to catch up once things settle back down. Such fears can lead to mistakes and security failures. That is why businesses should be increasing their security efforts, not letting them fall along the wayside.

Businesses should ensure that all their systems have logging enabled, and that monitoring of those logs is being undertaken. If possible, the number of employees dedicated to security monitoring should be increased. This effort will be much easier to implement if cross-training of personnel and full written operating procedures are in place; a lesson that should be learned from the current emergency and implemented in written pandemic planning.

In addition, businesses should ensure that secure mechanisms for remote working are in place. It is important that not only secure connection mechanisms are in place, but that multipart authentication techniques are used to the greatest extent possible. Whitelisting of authorized devices, tokens, digital certificates and biometrics should all be considered.

Just as important as technical security, businesses should ensure that all personnel are receiving security and awareness training. They should be fully trained in how to secure their laptops and home computers, how to connect to business assets securely and how to respond if they suspect they are vulnerable or being hacked. Responding to incidents quickly and correctly are key factors in minimizing damage from a security event.

Pandemic Planning Webinar Materials

John Davis and David Rose held a pandemic planning webinar on the 17th of March.

Here are the materials from the event, in case you were not able to attend.

PDF of slide deck: https://media.microsolved.com/Pandemic.pdf

MP4 recording of event: https://media.microsolved.com/2020-03-17%2010.00%20Pandemic%20Planning%20Update.mp4

Event Description:

MicroSolved’s John Davis and Dave Rose will explore pandemic plan updates in the age of the COVID-19 outbreak. They will discuss lessons learned, from  building a basic plan to updating existing plans. They will share the latest advice from our consulting practice, from State, Local and Federal resources and point out a variety of resources that are now available to assist organizations.

We hope this help folks and of course, if we can be of any assistance, please let us know. We are all in this together, and MSI is here to help wherever and whenever we can. Stay safe out there!