Operational resilience begins with your commitment to and investment in cyber resilience

Operational resilience cannot be achieved without a true commitment to and investment in cyber resilience. Global organizations need to reach the state where their core operations and services won’t be disrupted by geopolitical or socioeconomic events, natural disasters, and cyber events if they are to weather such events.

To help increase stability and lessen the impact to their citizens, an increasing number of government entities have drafted regulations requiring the largest organizations to achieve a true state of operational resilience: where both individual organizations and their industry absorb and adapt to shocks, rather than contributing to them. There are many phenomena that have led to this increased governance, including high-profile cyberattacks like NotPetya, WannaCrypt, and the proliferation of ransomware.

The rise in nation state and cybercrime attacks focusing on critical infrastructure and financial sectors, and the rapid growth of tech innovation pervading more and more industries, join an alarming increase in severe natural disasters, an unstable global geopolitical environment, and global financial market instability on the list of threats organizations should prepare for.

Potential impact of cybercrime attacks

Taken individually, any of these events can cripple critical business and government operations. A lightning strike this summer caused the UK’s National Grid to suffer the biggest blackout in decades. It affected homes across the country, shut down traffic signals, and closed some of the busiest train stations in the middle of the Friday evening rush hour. With trains needing to be manually rebooted, the rhythm of everyday work life was disrupted. The impact of cybercrime attacks can be as significant, and often longer term.

NotPetya cost businesses more than $10 billion; pharmaceutical giant Merck put its bill at $870 million alone. For more than a week, the malware shut down cranes and security gates at Maersk shipping terminals, as well as most of the company’s IT network—from the booking site to systems handling cargo manifests. It took two months to rebuild all the software systems, and three months before all cargo in transit was tracked down—with recovery dependent on a single server having been accidently offline during the attack due to the power being cut off.

The combination of all these threats will cause disruption to businesses and government services on a scale that hasn’t been seen before. Cyber events will also undermine the ability to respond to other types of events, so they need to be treated holistically as part of planning and response.

Extending operational resiliency to cover your cybersecurity program should not mean applying different principles to attacks, outages, and third-party failures than you would to physical attacks and natural hazards. In all cases, the emphasis is on having plans in place to deliver essential services whatever the cause of the disruption. Organizations are responding by rushing to purchase cyber-insurance policies and increasing their spending on cybersecurity. I encourage them to take a step back and have a critical understanding of what those policies actually cover, and to target the investment, so the approach supports operational resilience.

As we continue to witness an unparalleled increase in cyber-related attacks, we should take note that a large majority of the attacks have many factors in common. At Microsoft, we’ve written at length on the controls that best position an organization to defend against and respond to a cyber event.

• This recent blog, by Alex Weinert, discusses the importance of Multi-Factor Authentication (MFA). Many attacks are still initiated or escalated via password theft, breach, or reuse via phishing, password spray, brute force attacks, and similar techniques that can be blocked by MFA.
• In August 2017, in response to the WannaCrypt and NotPetya attacks, I wrote about tools and services relevant to establishing a cyber resilience program.
• The DART team’s ongoing blog series of best practices, based on their learnings from more than 200 global customer incident responses they complete annually.
• At the 2018 RSA Conference, we published a guide with E&Y and Edelman with comprehensive best practices for incident response, ranging from the technological to legal and communications.

We must not stand still

The adversary is innovating and accelerating. We must continue to be vigilant and thorough in both security posture, which must be based on “defense in depth,” and in sophistication of response.

The cost of data breaches continues to rise; the global average cost of a data breach is $3.92 million according to the 2019 Ponemon Institute report. This is up 1.5 percent from 2018 and 12 percent higher than in 2014. These continually rising costs have helped galvanize global entities around the topic of operational resilience.

The Bank of England, in July 2018, published comprehensive guidelines on operational resilience that set a robust standard for rigorous controls across all key areas: technology, legal, communications, financial solvency, business continuity, redundancy, failover, governmental, and customer impact, as well as full understanding of what systems and processes underlie your business products and services.

This paper leaves very few stones unturned and includes a clear statement of my thesis—dealing with cyber risk is an important element of operational resilience and you cannot achieve operational resilience without achieving cyber resilience.

Imagine for a moment that your entire network, including all your backups, is impacted by a cyberattack, and you cannot complete even a single customer banking transaction. That’s only one target; it’s not hard to extrapolate from here to attacks that shut down stock trades, real estate transactions, fund transfers, even to attacks on critical infrastructure like healthcare, energy, water system operators. In the event of a major attack, all these essential services will be unavailable until IT systems are restored to at least a baseline of operations.

It doesn’t require professional cybersecurity expertise to understand the impact of shutting down critical services, which is why the new paradigm for cybersecurity must begin not with regulations but with a program to build cyber resilience. The long list of public, wide-reaching cyberattacks where the companies were compliant with required regulations, but still were breached, demonstrates why we can no longer afford to use regulatory requirements as the ultimate driver of cybersecurity.

While it will always be necessary to be fully compliant with regulations like GDPR, SOX, HIPAA, MAS, regional banking regulators, and any others that might be relevant to your industry, it simply isn’t sufficient for a mature cyber program to use this compliance as the only standard. Organizations must build a program that incorporates defense in depth and implements fundamental security controls like MFA, encryption, network segmentation, patching, and isolation and reduction of exceptions. We also must consider how our operations will continue after a catastrophic cyberattack and build systems that can both withstand attack and be instantaneously resilient even during such an attack. The Bank of England uses the mnemonic WAR: for withstand, absorb, recover.

The ability to do something as simple as restoring from recent backups will be tested in every ransomware attack, and many organizations will fail this test—not because they are not backing up their systems, but because they haven’t tested the quality of their backup procedures or practiced for a cyber event. Training is not enough. Operational resilience guidelines call for demonstrating that you have concrete measures in place to deliver resilient services and that both incident management and contingency plans have been tested. You’ll need to invest in scenario planning, tabletop exercises and red/blue team exercises that prove the rigor of your threat modeling and give practice in recovering from catastrophic cyber events.

Importance of a cyber recovery plan

Imagine, if you will, how negligent it would be for your organization to never plan and prepare for a natural disaster. A cyber event is the equivalent: the same physical, legal, operational, technological, human, and communication standards must apply to preparation, response, and recovery. We should all consider it negligence if we do not have a cyber recovery plan in place. Yet, while the majority of firms have a disaster recovery plan on paper, nearly a quarter never test that and only 42 percent of global executives are confident their organization could recover from a major cyber event without it affecting their business.

Cybersecurity often focuses on defending against specific threats and vulnerabilities to mitigate cyber risk, but cyber resilience requires a more strategic and holistic view of what could go wrong and how your organization will address it as whole. The cyber events you’ll face are real threats, and preparing for them must be treated like any other form of continuity and disaster recovery. The challenges to building operational resilience have become more intense in an increasingly hostile cyber environment, and this preparation is a topic we will continue to address.

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