Originally posted on LinkedIn:
CISOs – How is your relationship with your regulators?
In this SEC news release, Commissioner Dan Gallagher flags that the myriad of financial services regulations (overseen by an ‘alphabet soup’ of regulators) don’t have cost/benefit analyses performed.
He terms the cumulative effect on financial service institutions a “death by a thousand cuts” in terms of millions of man hours and dollars spent on assessing compliance and closing gaps to comply.
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How do you feel when these kinds of questions are asked?:
- What keeps you up at night?
- Is your security function staffed appropriately, both in terms of numbers and skills?
- How do you govern security and is that working?
- What is your security risk appetite and how do you set it?
- Tell me about your incidents and what you have done to prevent recurrence?
- When and how will you achieve compliance?
Does it feel like an opportunity to set out your current position and discuss plans to strategically improve security, or uncomfortably like rope is being accumulated to hang you with?
It might be the FCA, SEC, ICO, PCI QSA, external auditors or AN Other body. Problems seem largely the same. Lines are drawn, ultimatums are issued, timescales are set and they frequently fail to reflect existing capability, real levels of risk and real work and investment needed to make a demanded change.
Board attention gets focused away from good progress being made to mature security and towards a point in time snapshot of assessed weakness.
Conversely, poorly executed assessments may paint a compliant picture when you are struggling to highlight and obtain backing to fill security holes that you know exist.
One heartfelt plea from a CISO I correspond with was for informal chats. Meetings with regulators run on Chatham House rules to align expectations about realistic goals. Potentially inviting peers in the same industry, of similar size and with similarly mature security functions, to blamelessly and confidentially share insights.
As I called out in this article about current cybersecurity risk reality:
There is no consensus on the real level of cybersecurity risk we are living with, because data sets and ways to calculate risk vary from firm to firm
We also lack any concrete benchmarks for adequate security, either in terms of universally agreed control sets or what a well operated control looks like.
If, as I argue, there is no consensus on the problems or on the solutions, how can regulators prove their worth? Is regulatory oversight too often applied with no respect for local security capability and your real risk profile?
Surely the only constructive approach is to collaborate to gain sufficient intelligence about the real state of play to set achievable goals. Without that, reports from regulators can deepen the rift between security leaders and the rest of the board.
I am in no way suggesting regulation is not needed. Regulation is necessary to guard corporate and private consumers against laziness, persistent misplaced thrift, or criminal neglect of security. But are regulators doing more harm than good to diligent firms? The ones still struggling (like the rest of the world) to work out how much is enough security to minimise their risks.
Your perspectives are most welcome.
To see comments posted by LinkedIn have a squizz at the original post.