FSB is consulting on a toolkit of effective practices to assist financial institutions in their cyber incident response and recovery activities. The toolkit lists 46 effective practices that have been structured across seven components. These components are governance, preparation, analysis, mitigation, restoration, improvement, and coordination and communication. FSB welcomes comments and responses, by July 20, 2020, to the questions set out in the consultation. This consultation report was sent to G20 Finance Ministers and Central Bank Governors for their virtual meeting on April 15.
Efficient and effective response to and recovery from a cyber incident by organizations in the financial ecosystem is essential to limiting any related financial stability risks. The toolkit draws from survey responses by national authorities, international organizations, and external stakeholders; a review of the existing standards and case studies of cyber incidents; engagement with external stakeholders at workshops and bilateral meetings; and insights drawn from national authorities based on their supervisory work. The toolkit is structured across the following seven components:
- Governance—This component frames the way in which cyber incident and recovery is organized and managed. It aligns cyber incident and recovery activities with goals set for continuity of business operations. It sets the organizational structures and roles required to coordinate response and recovery across internal functions, business lines, firms, jurisdictions, or even sectors. Governance involves defining the decision-making framework and allocates responsibilities and accountabilities to ensure that the right stakeholders are engaged when a cyber incident occurs.
- Preparation—The aim should be to establish and maintain capabilities to respond to cyber incidents and to restore critical functions, processes, activities, systems, and data affected by cyber incidents to normal operations. While preparation is a phase before an incident, it significantly and directly influences the effectiveness of cyber incident and recovery activities.
- Analysis—Analysis is conducted to ensure effective response and recovery activities, including forensic analysis, and to determine the severity, impact, and root cause of the cyber incident to drive appropriate response and recovery activities.
- Mitigation—Activities related to mitigation are performed to prevent the aggravation of the situation and eradicates cyber threats in a timely manner to alleviate their impact on business operations and services.
- Restoration—Organizations repair and restore systems or assets affected by a cyber incident to safely resume business-as-usual delivery of impacted services.
- Improvement—Organizations establish processes to improve response and recovery capabilities through the lessons learned from past cyber incidents and from proactive tools such as cyber incident and recovery exercises. Necessary changes are made to cyber incident and recovery policies, plans, and playbooks to improve the overall process as well as any necessary training and testing. Lessons learned are used in the selection and implementation of additional controls and mitigation measures.
- Coordination and communication—The aim should be to coordinate with stakeholders to maintain good cyber situational awareness and enhance cyber resilience of the ecosystem. Progress and outcomes from the cyber incident analysis are shared with internal and external stakeholders to take actions to contain, mitigate, recover, or prevent a cyber incident and to ensure that no misunderstandings or rumors arise from lack of information. A common, secure, and trusted communication channel enhances the efficiency and security of information-sharing.
Enhancing cyber incident response and recovery at organizations is an important focus for national authorities. National authorities are in a unique position to gain insights on effective cyber incident response and recovery activities in financial institutions from their supervisory work and from their observations across multiple organizations and peer analyses that can help suggest areas that both authorities and organizations can enhance. The final toolkit, taking on board the feedback from this public consultation, will be sent to the October meeting of G20 Finance Ministers and Central Bank Governors.
Keywords: International, Banking, Insurance, Securities, Cyber Incident, Governance, Response and Recovery, Toolkit, Operational Risk, Cyber Risk, FSB
Previous ArticleMAS Announces Additional Relief Measures Amid COVID Crisis
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.
At the global level, supervisory efforts are increasingly focused on addressing climate risks via better quality data and innovative use of technologies such as generative artificial intelligence (AI) and blockchain.
The finalization of the IFRS sustainability disclosure standards in late June 2023 has brought to the forefront the themes of the harmonization of sustainability disclosures
The European Banking Authority (EBA) recently issued several regulatory publications impacting the banking sector.
The Basel Committee on Banking Supervision (BCBS) launched a consultation on revisions to the core principles for effective banking supervision, with the comment period ending on October 06, 2023.
The U.S. banking agencies (FDIC, FED, and OCC) recently proposed rules implementing the final Basel III reforms, also known as the Basel III Endgame.
The Financial Stability Board (FSB) recently published the second annual progress report on the July 2021 roadmap to address climate-related financial risks.
The recognition of climate change as a systemic risk to the global economy has further intensified regulatory and supervisory focus on monitoring of the environmental, social, and governance (ESG) risks.