FFIEC Cybersecurity Assessment Tool Update

Banker looking over the CAT

FFIEC Cybersecurity Assessment Tool Update

The FFIEC recently released a long-awaited update to the Cybersecurity Assessment Tool, and we think overall it is a relatively minor but useful evolution. But before we get into the details of what the update does address, it’s important to note that it did not address the ambiguity issues that plague the current assessment. One example…in the Inherent Risk section, there are a plethora of semicolons. Are they supposed to be interpreted as “or” or “and”? Take the question about personal devices being allowed to connect to the corporate network (4th question in the Technologies and Connection Types category).

The minimal risk level states the following:

“Only one device type available; available to <5% of employees (staff, executives, managers); e-mail access only.”

If the semicolons are interpreted as “or,” the statement reads like this:

“Only one device type available OR available to <5% of employees (staff, executives, managers) OR e-mail access only”.

This is considerably different than:

“Only one device type available AND available to <5% of employees (staff, executives, managers) AND e-mail access only”.

Unfortunately, the update did not offer any clarification on this, and as a result we are left to guess what the regulator’s intentions are. Our approach has been to risk-rank each question segment individually. So in the example above, what is the greater risk? The number of device types, the number of employees using them, or what they are allowed to access? We rank the risk of what employees are allowed to access highest, followed by the number of employees accessing, followed by the device types. And this is just one example, 18 of the 39 inherent risk questions require this type of interpretive challenge, and correct interpretation is absolutely critical, because your gap analysis and subsequent cyber action plan depend on an accurate inherent risk assessment.

Appendix A

However, the FFIEC CAT update does impact 2 areas; the first is a more detailed cross-reference in Appendix A mapping the baseline statements to the 2 recently released IT Handbooks (Management and Information Security), and the second will give most FI’s more flexibility when evaluating declarative statements.

First, the changes to Appendix A. Compare the original Risk Management/Audit section…

Risk Management/Risk Assessment: The risk assessment is updated to address new technologies, products, services, and connections before deployment.

Source: IS.B.13: Risk assessments should be updated as new information affecting information security risks is identified (e.g., a new threat, vulnerability, adverse test result, hardware change, software change, or configuration change). IS.WP.I.3.3: Determine the adequacy of the risk assessment process.
* Information Security, E-Banking, Management, Wholesale Payments

…with the updated section:

Risk Management/Risk Assessment: The risk assessment is updated to address new technologies, products, services, and connections before deployment.

Source: IS.II.A: pg7: External events affecting IT and the institution’s ability to meet its operating objectives include natural disasters, cyber attacks, changes in market conditions, new competitors, new technologies, litigation, and new laws or regulations. These events pose risks and opportunities, and the institution should factor them into the risk identification process.

IS.II.C:pg11: Additionally, management should develop, maintain, and update a repository of cybersecurity threat and vulnerability information that may be used in conducting risk assessments and provide updates to senior management and the board on cyber risk trends.

IS.WP.8.3.d: Determine whether management has effective threat identification and assessment processes, including the following: Using threat knowledge to drive risk assessment and response.

This more detailed and expanded set of cross-refences will be useful for both institutions and consultants as they navigate their way through this interpretive minefield.

However, this could be the most significant change:

“The updated Assessment will also provide additional response options, allowing financial institution management to include supplementary or complementary behaviors, practices and processes that represent current practices of the institution in supporting its cybersecurity activity assessment.” (Emphasis added)

It took us a while to find how this one was implemented because we were looking for a whole new section, but all the FFIEC has done is add a third option to your response to the declarative statements in the Control Maturity section. Prior to this update, you could only answer either “Y” or “N”. Now there is a third option; “Y(C)”, or Yes with Compensating Controls:

CAT Yes/No Controls

The FFIEC defines a Compensating Control as:

“A management, operational, and/or technical control (e.g., safeguard or countermeasure) employed by an organization in lieu of a recommended security control in the low, moderate, or high baselines that provides equivalent or comparable protection for an information system.”

Essentially what this means is now institutions will be able to document adherence to a declarative statement using either direct off-set (primary) controls, or alternative compensating controls, IF they are able to properly identify them. Because these controls are “in lieu of” recommended controls, they are necessarily more difficult to identify and document, much more so than a primary control.

That said, having a way for institutions to document their adherence to a particular declarative statement using either direct or compensating controls is a significant improvement, and should ultimately result in more declarative statements being marked as achieved. Be careful though, although we haven’t seen any IT exams since the update, a “Y(C)” response may very well prompt additional regulatory scrutiny precisely because it requires more documentation.

Safe Systems has assisted almost 100 customers through the CAT so far, helping to document their responses, producing stakeholder reports, and crafting action plans. Let us know if we can help you.

Print Friendly, PDF & Email

Write a Comment