Disruptive Technologies Present Opportunities for Risk Managers, Study Finds

PHILADELPHIA–Disruptive technologies are used more and more by businesses, but those organizations appear to be unprepared. What’s more, companies seem to lack understanding of the technologies and many are not conducting risk assessments, according to the 14th annual Excellence in Risk Management report, released at the RIMS conference here.

The study found an apparent lack of awareness among risk professionals of their company’s use of existing and emerging technologies, including the Internet of Things (IoT), telematics, sensors, smart buildings, and robotics and their associated risks. When presented with 13 common disruptive technologies, 24% of respondents said their organizations are not currently using or planning to use any of them. This is surprising, as other studies have found that more than 90% of companies are either using or evaluating IoT technology or wearable technologies and that companies in the United States invested $230 billion on IoT in 2016.

Another finding was that despite the impact disruptive technology can have on an organization’s business strategy, model, and risk profile, 60% of respondents said they do not conduct risk assessments around disruptive technologies.

“Today’s disruptive technologies will soon be — and in many cases already are — the norm for doing business,” said Brian Elowe, Marsh’s U.S. client executive leader and co-author of the report said in a statement. “Such lack of understanding and attention being paid to the risks is alarming. Organizations cannot fully realize the rewards of using today’s innovative technology if the risks are not fully understood and managed.” According to the study:

Organizations generally, and risk management professionals in particular, need to adopt a more proactive approach to educate themselves about disruptive technologies — what is already in use, what is on the horizon, and what are the risks and rewards. Forward-leaning executives are able to properly identify, assess, and diagnose disruptive technology risks and their impact on business models and strategies.

This lack of clarity presents opportunity for risk professionals. In fact, previous Excellence reports have indicated that C-suite executives and boards of directors want to know what risks loom ahead for their organizations and increasingly rely on risk professionals to provide that insight.

“As organizations adapt to innovative technologies, risk professionals have the opportunity to lead the way in developing risk management capabilities and bringing insights to bear on business strategy decisions,” said Carol Fox, vice president of strategic initiatives for RIMS and co-author of the report. “As a first step, risk professionals are advised to proactively educate themselves about disruptive technologies, including what is already in use at their organizations, what technologies may be on the horizon, and the respective risks and rewards of using such technology.”

One thing companies can do to manage risks associated with disruptive technologies is facilitate discussions through cross-functional committees—yet fewer companies, only 48%, said they have one, a drop from 52% last year and 62% five years ago.

Whether discussed in weekly, monthly, or quarterly organization-wide committee meetings, emerging risks — including disruptive technologies — need to be examined regularly to anticipate and manage the acceleration of business model changes. When risk is siloed, too often the tendency can be toward an insurance-focused approach to risk transfer rather than an enterprise approach that may lead to pursuing untapped opportunities.

The Excellence survey, Ready or Not, Disruption is Here, is based on more than 700 responses to an online survey and a series of focus groups with leading risk executives in January and February 2017.

Findings from the survey were released today at the RIMS 2017 Annual Conference & Exhibition. Copies of the survey are available on www.marsh.com<http://www.marsh.com> and www.rims.org<http://www.rims.org>.

Dallas Alarms Hack a Warning of Infrastructure Vulnerability

Dallas residents were wide awake and in a state of confusion late Friday night when the city’s outdoor emergency system was hacked, causing all of its 156 alarms to blast for an hour-and-a-half until almost 1:30 a.m.

With some interpreting the warning as a bomb or missile, a number of residents dialed 9-1-1, but the number of calls—4,400 in all—overwhelmed the system, causing some callers to wait for up to six minutes for a response, the New York Times reported.

The alarms blasted for 90-second durations about 15 times, Rocky Vaz, the director of the city’s Office of Emergency Management, told reporters at a news conference.

Mr. Vaz said emergency workers and technicians had to first figure out whether the sirens had been activated because of an actual emergency. And turning off the sirens also proved difficult, eventually prompting officials to shut down the entire system.

“Every time we thought we had turned it off, the sirens would sound again, because whoever was hacking us was continuously hacking us,” Sana Syed, a spokeswoman for the city told the Times.

Eventually the alarms were turned off, which had to be done manually, one alarm at a time.

On Saturday afternoon the system, used for hurricanes and other warnings, was still down, but officials said they hoped to have it functioning soon. They also said they had pinpointed the origin of the security breach after ruling out that the alarms had come from their control system or from remote access.

Mr. Vaz said that Dallas had reached out to the Federal Communications Commission for help and was taking steps to prevent hackers from setting off the system again, but that city officials had not communicated with federal law enforcement authorities.

Security officials have warned about the risks that such hacking attacks pose to infrastructure, which is often aging and in disrepair. Federal data shows that the number of attacks on critical infrastructure appears to have risen: to nearly 300 in 2015 from just under 200 in 2012. Attacks include a 2008 oil pipeline explosion in Turkey; a 2015 hacking of Ukraine’s power grid, leaving 200,000 people in Western Ukraine without electricity for several hours; and in 2013, hackers tried to gain control of a small dam in upstate New York. Seven computer specialists, who worked for Iran’s Islamic Revolutionary Guards Corps., were indicted for trying to take over controls of the dam, according to the Times.

8 Steps to Stronger Passwords Enterprise-Wide

Passwords remain one of the most critical security controls widely used to protect and secure company infrastructure and data. While the need for strong passwords has long been discussed, they continue to be the difference between a secure infrastructure and a potential cyber catastrophe.

Last year was extremely busy in cybercrime, with more than 3 billion credentials and passwords stolen and disclosed on the internet. That works out to a rate of 8.2 million credentials and passwords each day or 95 passwords every second.

Passwords have always been a good security control, but password strength and how they are processed make a major difference in how secure they really are. For example, it is critical to choose an easy password to remember, keep it long, and use some complexity and uniqueness. In addition, how the password is processed and stored in an encrypted format plays a major role in password security.

Here are eight easy steps to get in control and ensure passwords are strong and secure:

  1. Go with encryption: Passwords cannot be left in plain text ever and especially not in an Excel document. Always store passwords with encryption.
  2. Escape complexity: Focus on teaching your end users to use longer and more easily remembered passwords, like password phrases. Don’t let them get bogged down with having to remember special character requirements.
  3. Teach employees: Continued training is critical and is the most important step in implementing your policy. Make sure your users understand their role, prepare quarterly reviews, and make it fun with incentives.
  4. Size matters: The longer the password, the harder for a hacker to break. Make human passwords at least eight characters long and systems passwords 12-50 characters.
  5. Trust no one: Two-factor authentication is a must! No matter the size of your organization, there are two-factor options for you, like RADIUS tokens, DUO, or Google Authenticator.
  6. Omit duplicates: Use a unique password for each of your accounts. The same password should never be used more than once!
  7. No cheating: Remembering a long password can be difficult, but don’t allow password hints. These just make it easier for hackers to get in.
  8. Get a vault: Start using a trusted password manager to enforce strong password best practices. This way, users can always generate long and complex passwords, never have to remember all their passwords and, if you use a vault for your IT team, you can find one that automatically changes your admin passwords. When it comes to IT, automation is key to preventing a breach.

For more information on what’s expected in relation to security and passwords, check out Thycotic’s recent report on the current and future state of password security.

Closing the Vendor Security Gap

What do organizations really know about their relationships with their vendors?

It’s a question that most companies can’t answer, and for many, that lack of knowledge could represent increased risk of a security breach. This year, Bomgar conducted research into vendor security on a global scale, and the findings underscore that much work remains to be done to shore up third-party security.

The 2016 Vendor Vulnerability Index report produced eye-opening results that should be a wake-up call for business leaders, CIOs and senior IT managers. The survey of more than 600 IT and security professionals explores the visibility, control, and management that organizations in the U.S. and Europe have over external parties accessing their IT networks. Some of the most surprising statistics are summarized below:

  • An average of 89 vendors are accessing a company’s network every week.
  • 92% of respondents reported they trusted their vendors completely or most of the time.
  • 69% said they definitely or possibly suffered a security breach resulting from vendor access in the past year.
  • In the U.S., just 46% of companies said they know the number of log-ins that could be attributed to vendors.
  • Only 51% enforce policies around third-party access.

It’s evident from these findings that third-party access is pervasive throughout most organizations. What’s more, this practice is likely to grow—75% of the respondents stated that more vendors access their systems today than did two years ago. An additional 71% believe this number will continue to increase for another two years.

Two-thirds of those polled admit they have a tendency to trust vendors too much—confidence that should be questioned based on the results of this report. The data revealed that, while most organizations place a high level of trust in their vendors, they still have a low level of visibility into how vendors are accessing their systems.

This contradiction is not something organizations should take lightly. As noted above, 69% of respondents admitted they had either definitely or possibly suffered a security breach resulting from vendor access. An additional 77% believe their company will experience a security issue within the next two years as a result of vendor activity on their networks.

As an organization’s network of vendors grows, so too does the risk of a potential breach. For most companies, it is essential that third-parties have access to sensitive systems as a course of doing business—the question centers on how to grant this access securely.

Historically, companies have used VPNs to provide network access to third-parties. While appropriate for the intended end-user—remote and/or traveling employees—issues arise when the scope of VPN is trusted to manage connections from external groups. If a system connected via VPN is exploited and used as a point of persistence for leap-frogging into the broader network, hackers can persist for days or months and move stealthily about the network. Companies have also seen malicious (or well-intentioned) insiders choosing to abuse their access to steal or leak sensitive information, as this is all made fairly trivial when leveraging open-ended VPN connectivity.

To balance the dual demands of access and security, companies need a solution that allows them to control, monitor and manage how external parties are accessing their systems. Rather than providing “the keys to the kingdom,” a modern secure access solution enables organizations to grant vendors and other third-parties access only to the specific systems and applications needed to do their jobs.

To ensure security, organizations should also select a secure access solution that provides video and text logs of all session activity. This allows companies to monitor how remote access is being used and, perhaps more importantly, by whom. With this technology, any suspicious activity can be immediately flagged for further investigation. In addition, these session forensics can help companies meet internal and external compliance requirements.

Another secure access best practice is to employ a password/credential vaulting solution. This enables organizations to mitigate the risk of credentials shared between privileged users, which are often the target of a threat actor. It also reduces the risk of what system administrators often think of as “the stickynote nightmare,” where a sensitive credential is written on a stickynote and stuck on someone’s monitor for all who walk by to see. Password vaulting technologies also help with the dangers posed by embedded system service accounts that have administrative privileges and are rarely rotated for fear of bringing critical business services down. A small, yet strong initiative to protect network security would include requiring every privileged user to access credentials required for elevated work via checking out of a password vault. This removes most of the challenges associated with sharing credentials as, once they are checked back in, those credentials can be immediately rotated and thus become unknown to the employee or the bad actor who may have stolen them. Incorporating multi-factor technology in order to access the password vault and other sensitive systems takes it a step further.

In today’s heightened environment, following these steps should be essential security best practices for any company allowing vendors or other third-parties to access their network.

The Vendor Vulnerability Index report suggests that companies are aware of the threats posed by ineffective management and poor visibility into vendor access. Yet, as the data shows, just slightly over half of the respondents are enforcing any policies around third-party access. In light of these findings, companies should also ensure that they are properly screening any third-parties with whom they share network access. For example, does the vendor provide security awareness training as part of their employee on-boarding process? Asking this and similar questions will give companies a clearer picture of the vendor’s security ethos, and help them to determine if the partnership is a good fit to begin with.

In order to combat this growing vulnerability, organizations need granular control over external access. Only with such a solution in place can companies feel confident that their vendors won’t unintentionally become their weakest security link.