Regulators Unveil Cyber Resilience Best Practices for Financial Firms

In a concerted effort to bolster cyber resilience in the financial sector, the UK's Financial Conduct Authority (FCA), Bank of England, and Prudential Regulation Authority (PRA) have released a comprehensive set of guidelines highlighting good practices for firms to adopt. The initiative underscores the regulators' commitment to enhancing operational resilience and fortifying the financial system against cyber threats.

Operational Resilience and CBEST Program:Operational resilience, defined as the ability to absorb and adapt to shocks and disruptions, has become a top priority for regulators in recent years. The Cyber and Business Resilience Testing (CBEST) program plays a pivotal role in assessing the cyber resilience of systemically important firms and financial market infrastructures (FMIs). CBEST employs an intelligence-led penetration testing approach, mirroring the tactics of cyber attackers aiming to compromise critical business services and disrupt associated technology assets, people, and processes.

The live tests conducted under CBEST assess the detection and response capabilities of systemic financial institutions through simulations of relevant cyber scenarios. The program aims to provide firms and FMIs with a prioritized assessment, enabling them to identify and address weaknesses, thus enhancing their overall resilience and contributing to the robustness of the broader financial system.

- Thematic Findings and Guidance:The regulators have released thematic findings from the latest CBEST assessments, covering banks, insurers, asset and investment managers, and FMIs. The collaboration with the National Cyber Security Centre (NCSC) is evident in the publication, which includes links to relevant NCSC guidance without introducing new regulatory requirements.

- Objectives and Intended Audience:The publication is intended to benefit a range of roles within financial firms, including SMF24, CISO, CIO, COO, CRO, and Cyber specialists. Its primary objectives are to encourage firms to consider threat intelligence observations, raise awareness at the senior executive level, and inform the work of risk and internal audit functions.

- Thematic Process and Threat Intelligence:The findings are derived from penetration testing, detection and response assessments, and observations about threat intelligence generated through CBEST. The publication emphasizes the importance of threat intelligence in enhancing an organization's understanding of the specific threat environment it operates within. Threat actors involved in CBEST scenario simulations include state actors, organized criminal groups, and insider threats, each with diverse motivations such as financial gain, information theft, operational disruption, and reputational damage.

- NCSC Perspectives and Thematic Findings:The publication delves into various thematic findings related to identity and access management, staff awareness and training, secure configuration, network security, incident response and security monitoring, and data security. It offers insights into positive examples and common gaps observed during testing, providing practical guidance for firms to enhance their cyber resilience.

- Encouraging Industry-Wide Resilience:The release of these guidelines aims to make lessons learned through regulatory programs widely available, fostering resilience across the entire UK financial sector. Firms are encouraged to utilize the findings to address weaknesses, enhance their security posture, and contribute to the collective effort of safeguarding the financial industry against cyber threats.

The comprehensive set of guidelines stands as a testament to the regulators' commitment to proactively addressing cybersecurity challenges and ensuring the resilience of the financial ecosystem in the face of evolving cyber threats.

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