9 Cyber Risk Questions Every Board Should Ask
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
When a data breach or other cyber event occurs, the damages can be significant, often resulting in lawsuits, and serious financial losses. What’s more, cyber exposures impact businesses of all kinds, regardless of their size, industry, or status as a private or public entity.
In order for organizations to truly protect themselves from cyber risks, corporate boards must play an active role. Not only does involvement from leadership improve cyber security, it can also reduce liability for board members. To help oversee their organization’s cyber risk management, boards should ask the following questions:
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Does the organization utilize technology to prevent data breaches?
Every company must have robust cyber security tools and anti-virus systems in place. These systems act as a first line of defense for detecting and preventing potentially debilitating breaches.
While it may sound obvious, many organizations fail to take cyber threats seriously and implement even the simplest protections. Boards can help highlight the importance of cyber security, ensuring that basic, preventive measures are in place.
These preventive measures must be reviewed on a regular basis, as cyber threats can evolve quickly. Boards should ensure that the management team reviews company technology at least annually, ensuring that cyber security tools are up to date and effective.
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Has the board or the company’s management team identified a senior member to be responsible for organizational cyber security preparedness?
Organizations that fail to create cyber-specific leadership roles could end up paying more for a data breach than organizations that do. This is because, in the event of a cyber incident, a fast response and clear guidance is needed to contain a breach and limit damages.
When establishing a chief information security officer or similar cyber leadership role, boards need to be involved in the process. Cyber leaders should have a good mix of technical and business experience. This individual should also be able to explain cyber risks and mitigation tactics at a high level so they are easy to understand for those who are not well-versed in technical terminology.
It should be noted that hiring a chief information security officer or creating a new cyber leadership role is not practical for every organization. In these instances, organizations should identify a qualified, in-house team member and roll cyber security responsibilities into their current job requirements. At a minimum, boards need to ensure that their company has a go-to resource for managing cyber security.
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Does the organization have a comprehensive cyber security program? Does it include specific policies and procedures?
It is essential for companies to create comprehensive data privacy and cyber security programs. These programs help organizations build a framework for detecting threats, remain informed on emerging risks and establish a cyber response plan.
Corporate boards should ensure that cyber security programs align with industry standards. These programs should be audited on a regular basis to ensure effectiveness and internal compliance.
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Does the organization have a breach response plan in place?
Even the most secure organizations can be impacted by a data breach. What’s more, it can often take days or even months for a company to notice its data has been compromised.
While cyber security programs help secure an organization’s digital assets, breach response plans provide clear steps for companies to follow when a cyber event occurs.
Breach response plans allow organizations to notify impacted customers and partners quickly and efficiently, limiting financial and reputational damage.
Board members should ensure that crisis management and breach response plans are documented. Specific actions noted in breach response plans should also be rehearsed through simulations and team interactions to evaluate effectiveness.
In addition, response plans should clearly identify key individuals and their responsibilities. This ensures that there is no confusion in the event of a breach and your organization’s response plan runs as smoothly as possible.
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Has the organization discussed and formalized a cyber risk budget? How engaged is the board in terms of providing guidance related to cyber exposures?
Both overpaying and underpaying for cyber security services can negatively affect an organization. Creating a budget based on informed decisions and research helps companies invest in the right tools.
Boards can help oversee investments and ensure that they are directed toward baseline security controls that address common threats. Boards, with guidance from the chief security officer or a similar cyber leader, should also prioritize funding. That way, an organization’s most vulnerable and important assets are protected.
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Has the management team provided adequate employee training to ensure sensitive data is handled correctly?
While employees can be a company’s greatest asset, they also represent one of their biggest cyber liabilities. This is because hackers commonly exploit employees through spear phishing and similar scams. When this happens, employees can unknowingly give criminals access to their employer’s entire system.
In order to ensure data security, organizations must provide thorough employee training. Boards can help oversee this process and instruct management to make training programs meaningful and based on more than just written policies.
In addition, boards should see to it that education programs are properly designed and foster a culture of cyber security awareness.
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Has management taken the appropriate steps to reduce cyber risks when working with third parties?
Working alongside third-party vendors is common for many businesses. However, whenever an organization entrusts its data to an outside source, there’s a chance that it could be compromised.
Boards can help ensure that vendors and other partners are aware of their organization’s cyber security expectations. Boards should work with the company’s management team to draw up a standard third-party agreement that identifies how the vendor will protect sensitive data, whether or not the vendor will subcontract any services and how it intends to inform the organization if data is compromised.
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Does the organization have a system in place for staying current on cyber trends, news, and federal, state, industry and international data security regulations?
Cyber-related legislation can change with little warning, often having a sprawling impact on the way organizations do business. If organizations do not keep up with federal, state, industry and international data security regulations, they could face serious fines or other penalties.
Boards should ensure that the chief information security officer or similar leader is aware of his or her role in upholding cyber compliance. In addition, boards should ensure that there is a system in place for identifying, evaluating and implementing compliance-related legislation.
Additionally, boards should constantly seek opportunities to bring expert perspectives into boardroom discussions. Often, authorities from government, law enforcement and cyber security agencies can provide invaluable advice. Building a relationship with these types of entities can help organizations evaluate their cyber strengths, weaknesses and critical needs.
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Has the organization conducted a thorough risk assessment? Has the organization purchased or considered purchasing cyber liability insurance?
Cyber liability insurance is specifically designed to address the risks that come with using modern technology—risks that other types of business liability coverage simply won’t cover.
The level of coverage your business needs is based on your individual operations and can vary depending on your range of exposure. As such, boards, alongside the company’s management team, need to conduct a cyber risk assessment and identify potential gaps. From there, organizations can work with their insurance broker to customize a policy that meets their specific needs.
How We Can Help
Asking thoughtful questions can help boards better understand the strategies management uses to prevent, detect and respond to data breaches. When it comes to cyber threats, organizations need to be diligent and thorough in their risk prevention tactics, and boards can help move the cyber conversation in the right direction.
Cyber exposures impact organizations from top to bottom, and all team members play a role in maintaining a secure environment. However, managing personnel and technology can be a challenge, particularly for organizations that don’t know where to start. Contact us today to learn more about cyber risk mitigation strategies you can implement today to secure your business.
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Mitigating BYOD and E-discovery Risks
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
The prevalence of employee-owned smartphones and other devices in workplaces across the country has grown considerably in the last few years and shows no sign of stopping.
A recent study by Bitglass found that 85% of organizations surveyed allowed their employees to use their personal devices for work functions. If it wasn’t obvious already, the “bring your own device” (BYOD) era is here to stay.
While there are numerous benefits of implementing a BYOD policy at your workplace, it can be problematic from an e-discovery standpoint, should your company enter litigation.
E-discovery Basics
Electronically stored information, or ESI, can be subject to discovery, which means it can be requested as evidence in court cases.
ESI is a category of discoverable information separate from print documents, and includes both structured and unstructured data such as emails, instant message logs, Word® documents, PowerPoint® presentations and scanned documents.
In litigation, e-discovery is the process of identifying, collecting, preserving, reviewing and producing relevant electronic data or documents as evidence. Determining which ESI is relevant is not simple due to the lack of precedence and established standards; however, it is important to be able to quickly access the right ESI.
While failing to produce all required ESI can be considered negligence, handing over too much data could mean disclosing privileged competitive information and jeopardizing corporate strategy or product plans.
BYOD’s Skyrocketing Popularity
Allowing employees to use their personal phones, laptops, tablets or other devices for work purposes has quickly become the new norm. Employees enjoy being able to use their own devices for several reasons:
- They can get more work done on their own devices with a more flexible schedule.
- They may prefer the operating systems of their own devices.
- Company-provided devices may lack the functionality that employees desire.
- Bringing personal activities into their work lives can lead to happier employees and more productivity.
Employees aren’t the only satisfied party. Employers can save money by not having to buy company-owned devices for employees to use, including technical support costs associated with diagnosing problems employees may have.
In addition, many employers can save on telecommunication costs, as employees are often willing to self-fund their own mobile plans.
BYOD Litigation Risks
Allowing employees to bring their own devices can seem like a pretty good deal for both sides. However, there are inherent risks with the practice, especially from a legal standpoint.
Employers must consider the following risks that may hinder the e-discovery process:
- Since you do not own employees’ devices, you do not have total control over the devices and how they’re used.
- There are many different types of data on devices, depending on the operating system, applications used, etc., and separating personal data from business data may be difficult.
- Data on devices can be stored in several locations.
- It is difficult to protect data on employees’ devices from harm, including theft and hacking.
- Employers cannot just seize an employee’s device for discovery—they need consent from the employee.
Best Practices for BYOD Policies and the E-discovery Process
If you have a BYOD policy at your workplace, or are planning to implement one, consider the following to ensure it is comprehensive and e-discovery-friendly:
- Have employees sign an agreement that lets them know how e-discovery requests will be handled, should the need arise.
- Consider using Mobile Application Management (MAM), which allows employers to control how applications perform on employee devices. It can control application encryption and even wipe sensitive data off the phone of a former employee.
- Consider purchasing and implementing one of the many applications capable of separating business data and personal data, making it easy for employers to locate discoverable data.
- Mandate that employee devices be configured to save certain information directly to the company servers.
- Create an acceptable use policy that lets employees know how you want them to handle company data on their personal devices.
- Prohibit employees from uploading sensitive company data to any third-party cloud storage system, such as Dropbox, Google Drive or Box.
- Sync data between employee devices and company servers regularly.
- Educate employees on best practices for keeping all data on their devices safe—the devices may contain sensitive company information.
- Mandate that employee devices be password-protected.
- Ensure that your BYOD policy is forthright and outlines the exact process for e-discovery, including a clear chain of custody.
- Ensure your IT and legal teams are on the same page. Your IT team should be able to advise the legal team on exactly what kinds of data are stored on employee devices and the best way to retrieve the data. The legal team, whether employed or contracted, should be familiar with the e-discovery process to advance the procedure as quickly as possible.
- Require compliance with your BYOD policy. In addition, keep the policy flexible to keep up with the ever-changing data landscape.
- Determine how you will handle the data on phones of former employees. Some companies remotely wipe former employees’ devices, but that can bring up questions about the ethics of deleting personal data from a device.
- Carefully decide which employees can use their own devices. BYOD may not be relevant or useful for all employees.
- Consider listing what devices are and are not acceptable. BYOD does not mean employees are free to use whatever device they wish. Employers may not want to offer support for certain devices due to the particular operating system or inherent security issues.
- Always put data security ahead of employee device security. Your company’s data should always be your number one concern.
Contact RISQ Consulting today for more ways to help make sure your BYOD policy properly protects your company’s data.
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Smishing Explained
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
Most businesses and individuals are familiar with phishing, a cyberattack technique that entails cybercriminals leveraging fraudulent emails to manipulate recipients into sharing sensitive information, clicking malicious links or opening harmful attachments. While these email-based scams remain a pressing concern, a new form of phishing—known as smishing—has emerged over the years, creating additional cyber exposures for businesses and individuals alike.
Smishing relies on the same tactics as phishing. The sole difference between these two cyberattack techniques is that smishing targets victims through text messages rather than emails. As a growing number of individuals utilize their smartphones for both personal and work-related purposes (e.g., interacting with colleagues and clients on mobile applications), smishing has become a rising threat. In fact, recent research found that nearly three-quarters (74%) of organizations experienced smishing incidents in the past year, while just 23% of the workforce recognizes this term.
With these numbers in mind, it’s evident that businesses need to address smishing exposures within their operations. The following article provides an overview of smishing and offers best practices for businesses to protect against this emerging cyberattack technique.
What Is Smishing?
Smishing follows the same format as phishing, using deceiving messages to manipulate recipients. These messages are generally sent via text, but can also be delivered through mobile instant messaging applications (e.g., WhatsApp). In these messages, cybercriminals may implement a wide range of strategies to get their targets to share information or infect their devices with malware. Specifically, they will likely impersonate a trusted or reputable source and urge the recipient to respond with confidential details, download a harmful application or click a malicious link. Here are some examples of common smishing messages:
- A message claiming to be from a financial institution, saying the recipient’s bank account is locked or experiencing suspicious activity and asking them to click a harmful link to remedy the issue
- A message impersonating a well-known retailer (e.g., Amazon, Target or Walmart), encouraging the recipient to download a malware-ridden application to receive a gift card or similar prize
- A message claiming to be from an attorney or law enforcement, saying the recipient is facing legal trouble or criminal charges and urging them to call an unknown number for more information
- A message impersonating the government, asking the recipient to click a suspicious link for details on their taxes or participation in a federal loan program
- A message claiming to be a research organization, requesting the recipient download a malicious application to complete an informational survey
- A message impersonating a delivery service, informing the recipient that they are receiving a package and providing them with a fraudulent link for tracking the item
If a recipient is tricked into doing what a smishing message asks, they could end up unknowingly downloading malware or exposing sensitive information, such as login credentials, debit and credit card numbers or Social Security numbers. From there, cybercriminals may use the information they obtained from smishing for several reasons, such as hacking accounts, opening new accounts, stealing money or retrieving additional data. Since individuals may use their smartphones for work-related tasks, smishing has the potential to impact businesses as well. For example, an individual who falls for a smishing scam could inadvertently give a cybercriminal access to their workplace credentials, allowing the criminal to collect confidential data from the victim’s employer and even steal business funds.
The nature of smishing has made this cyberattack technique a significant threat. This is because individuals are typically not as careful when communicating on their smartphones compared to their computers, often engaging in multiple text conversations at a time (sometimes while distracted or in a rush). After all, research from Experian found that individuals between ages 18-24 exchange around 4,000 texts each month. Considering these findings, individuals may be less wary or observant of a text message from an unknown number than an email, making them more likely to interact with a malicious text.
Furthermore, many individuals falsely assume that their smartphones possess more advanced security features than computers, thus protecting them from harmful messages. However, smartphone security has its limits. Currently, these devices are unable to directly safeguard individuals from smishing attempts, leaving all smartphone users vulnerable. That’s why it’s important for businesses to take steps to protect against smishing.
How to Protect Against Smishing
To effectively minimize smishing exposures and prevent related cyberattacks, businesses should:
- Conduct employee training—First, businesses should educate employees on what smishing is and how it could affect them. Additionally, employees should be required to participate in routine training regarding smishing detection and prevention. This training should instruct employees to:
- Watch for signs of smishing within their text messages (e.g., lack of personalization, generic phrasing and urgent requests)
- Refrain from interacting with or responding to messages from unknown numbers or suspicious senders
- Avoid clicking links or downloading applications provided within messages
- Never share sensitive information via text
- Utilize trusted contact methods (e.g., calling a company’s official phone number) to verify the validity of any request sent over text
- Report any suspicious messages to the appropriate parties, such as a supervisor or the IT department
- Ensure adequate bring-your-own-device (BYOD) procedures—Apart from providing smishing training, businesses should establish solid BYOD procedures to ensure employees act accordingly when utilizing their personal smartphones for work-related purposes. Such procedures may include using a private Wi-Fi network, implementing multifactor authentication capabilities, conducting routine device updates and logging out of work accounts after each use. These procedures can help deter smishing attempts and decrease the damages that may ensue from smishing incidents.
- Implement access controls—Another method for limiting smishing exposures is the use of access controls. By only allowing employees access to information they need to complete their job duties, businesses can reduce the risk of cybercriminals compromising excess data or securing unsolicited funds amid smishing incidents. To further protect their information, businesses should consider leveraging encryption services and establishing secure locations for backing up critical data.
- Utilize proper security software—Businesses should also make sure company-owned smartphones are equipped with adequate security software. In some cases, this software can halt cybercriminals in their tracks, stopping smishing messages from reaching recipients’ devices and rendering harmful links or malicious applications ineffective. In particular, smartphones should possess antivirus programs, spam-detection systems and message-blocking tools. Security software should be updated as needed to ensure effectiveness.
- Purchase sufficient coverage—Finally, it’s vital for businesses to secure proper cyber insurance to protect against potential losses stemming from smishing incidents. Businesses should reach out to their trusted insurance professionals to discuss specific coverage needs.
Conclusion
In summary, smishing is a serious cyber threat that both individuals and businesses can’t afford to ignore. By staying aware of smishing tactics and implementing solid mitigation measures, businesses can successfully protect against this rising cyberattack technique, deterring cybercriminals and minimizing associated losses.
For more risk management guidance, contact us today.
- Published in Blog
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