Cut Cybersecurity Risk by 60% With New Program

Cut Cybersecurity Risk by 60% With New Program

Executive Summary

Granite Peak Advisors, a growing RIA managing over $750 million in assets, faced increasing pressure to enhance its cybersecurity posture to meet SEC regulations and protect sensitive client data. Golden Door Asset developed and implemented a comprehensive cybersecurity program based on the NIST Cybersecurity Framework, incorporating advanced threat detection, employee training, and incident response planning. The program resulted in a 60% reduction in Granite Peak's overall cybersecurity risk, ensuring compliance, boosting investor confidence, and significantly mitigating the potential for costly data breaches.

The Challenge

Granite Peak Advisors, like many RIAs, recognized the escalating threat of cyberattacks targeting the financial services industry. They managed a substantial portfolio of client data, including Personally Identifiable Information (PII), account details, and investment strategies. A successful breach could lead to significant financial losses for both the firm and its clients, regulatory fines, and irreparable reputational damage.

Specifically, Granite Peak faced several critical cybersecurity challenges:

• Increasing Regulatory Scrutiny: The SEC has been actively increasing its oversight of RIAs' cybersecurity practices. Recent regulatory guidance emphasizes the need for robust cybersecurity programs and regular risk assessments. Failure to comply could result in significant fines and penalties. A mock audit, based on recent SEC enforcement actions, estimated potential penalties of up to $150,000 for identified weaknesses in their existing security protocols.
• Vulnerability to Phishing Attacks: Human error remained a significant weakness. Prior to engaging with Golden Door Asset, Granite Peak employees were clicking on an average of 8% of simulated phishing emails, exposing the firm to potential malware infections and credential theft. A successful phishing attack compromising even a few client accounts could result in losses exceeding $250,000.
• Lack of Comprehensive Vulnerability Management: Their existing vulnerability scanning was infrequent and incomplete, leaving potential vulnerabilities unpatched for extended periods. A recent internal assessment revealed over 50 high-severity vulnerabilities across their network and endpoints.
• Inadequate Incident Response Plan: Granite Peak lacked a well-defined and tested incident response plan. In the event of a cyberattack, they were unprepared to effectively contain the damage, restore systems, and notify affected parties in a timely manner. An analysis projected that a poorly managed incident could cost the firm upwards of $500,000 in recovery expenses and lost productivity.
• Limited Cybersecurity Budget Justification: While they understood the need to improve security, Granite Peak struggled to justify the necessary investments due to the difficulty in quantifying the potential return on investment (ROI) of cybersecurity enhancements.

Granite Peak realized their existing cybersecurity measures were insufficient to address the growing threat landscape and meet regulatory expectations. They sought a comprehensive solution to bolster their defenses, protect client data, and ensure the long-term viability of their business.

The Approach

Golden Door Asset adopted a phased approach, leveraging the NIST Cybersecurity Framework as the foundation for developing and implementing a comprehensive cybersecurity program for Granite Peak Advisors. This framework provides a structured and risk-based approach to managing cybersecurity risks. Our strategy encompassed the following key elements:

1. Cybersecurity Risk Assessment: We began by conducting a thorough risk assessment to identify Granite Peak's critical assets, vulnerabilities, and threats. This involved reviewing their existing security controls, interviewing key personnel, and analyzing their IT infrastructure. The assessment revealed significant gaps in their security posture, particularly in the areas of endpoint protection, vulnerability management, and employee training.
2. Development of a Cybersecurity Program: Based on the risk assessment, we developed a tailored cybersecurity program aligned with the NIST Cybersecurity Framework. This program included the following key components:
   • Endpoint Protection: Implementing advanced endpoint detection and response (EDR) solutions to detect and prevent malware infections, ransomware attacks, and other cyber threats.
   • Vulnerability Management: Establishing a continuous vulnerability scanning and patching process to identify and remediate vulnerabilities in a timely manner.
   • Security Awareness Training: Providing regular security awareness training to employees to educate them about phishing attacks, social engineering, and other common cyber threats.
   • Incident Response Planning: Developing a comprehensive incident response plan to guide the firm's response to cyberattacks.
   • Data Loss Prevention (DLP): Implementing DLP measures to prevent sensitive client data from leaving the organization without authorization.
   • Multi-Factor Authentication (MFA): Enforcing MFA across all critical systems to enhance authentication security.
3. Implementation of Security Controls: We worked closely with Granite Peak's IT staff to implement the security controls outlined in the cybersecurity program. This involved configuring security tools, deploying software updates, and developing security policies and procedures.
4. Ongoing Monitoring and Improvement: We established a system for ongoing monitoring and improvement to ensure the cybersecurity program remained effective over time. This included regular vulnerability scans, penetration testing, security audits, and employee training. We also provided ongoing support and guidance to Granite Peak's IT staff.

Our decision-making framework prioritized solutions that offered a balance between effectiveness, cost-efficiency, and ease of implementation. We carefully evaluated different security tools and services, considering their features, performance, and integration capabilities. We also worked closely with Granite Peak's leadership to ensure that the cybersecurity program aligned with their business objectives and risk tolerance.

Technical Implementation

The technical implementation involved deploying and configuring a suite of security tools and implementing specific security controls. Key technical details include:

• Endpoint Protection with CrowdStrike Falcon: Deployed CrowdStrike Falcon across all endpoints (servers, desktops, and laptops) to provide real-time threat detection and response. Falcon's AI-powered threat intelligence and behavioral analysis capabilities significantly improved the firm's ability to detect and prevent malware infections and ransomware attacks. Configuration included enabling next-gen antivirus, endpoint detection and response (EDR), and threat intelligence modules. The initial installation took 3 days and required minimal system downtime.
• Security Awareness Training with KnowBe4: Implemented KnowBe4's security awareness training platform to educate employees about phishing attacks, social engineering, and other common cyber threats. The platform delivered interactive training modules and simulated phishing emails to test employee awareness. We rolled out quarterly training modules and monthly simulated phishing campaigns.
• Vulnerability Scanning with Tenable Nessus: Deployed Tenable Nessus to conduct regular vulnerability scans of Granite Peak's network and endpoints. Nessus identified vulnerabilities in software, operating systems, and network devices. We configured Nessus to perform weekly scans and generate detailed reports identifying critical vulnerabilities that required immediate remediation.
• Multi-Factor Authentication (MFA): Implemented MFA using Duo Security across all critical systems, including email, VPN, and cloud applications. MFA required users to authenticate with a second factor (e.g., a mobile app or security token) in addition to their password, significantly reducing the risk of unauthorized access.
• Data Loss Prevention (DLP): Implemented Microsoft Purview Information Protection to identify and protect sensitive data. This involved classifying data based on sensitivity labels and implementing policies to prevent data leakage. For example, we configured rules to prevent client account numbers from being sent outside the organization via email.
• Incident Response Plan: Developed a comprehensive incident response plan outlining the steps to be taken in the event of a cyberattack. The plan included procedures for incident detection, containment, eradication, recovery, and post-incident activity. We also conducted regular tabletop exercises to test the plan and ensure that employees were familiar with their roles and responsibilities.

Calculations:

• Phishing Click Rate Reduction: Tracked the phishing click rate before and after implementing KnowBe4. The initial click rate was 8%. After six months of training, the click rate dropped to 2%, representing a 75% reduction.
• Vulnerability Remediation Time: Measured the average time to remediate critical vulnerabilities before and after implementing Tenable Nessus. Prior to implementation, the average remediation time was 30 days. After implementation, the average remediation time dropped to 7 days, representing a 77% improvement.

Results & ROI

The implementation of the comprehensive cybersecurity program resulted in significant improvements in Granite Peak Advisors' security posture and a tangible return on investment:

• Reduced Cybersecurity Risk by 60%: The overall cybersecurity risk, as measured by a standardized risk assessment framework, was reduced by 60%. This was achieved through a combination of improved security controls, employee training, and incident response planning.
• Met SEC Cybersecurity Requirements: The cybersecurity program helped Granite Peak meet the SEC's cybersecurity requirements, reducing the risk of regulatory fines and penalties. A follow-up audit demonstrated full compliance with SEC guidelines.
• Reduced Phishing Click Rate by 75%: Employee security awareness training significantly reduced the phishing click rate, minimizing the risk of malware infections and credential theft. The reduction in click-through rates from 8% to 2% translates to a projected avoidance of $150,000 in potential phishing-related damages annually.
• Improved Vulnerability Remediation Time by 77%: Continuous vulnerability scanning and patching reduced the average time to remediate critical vulnerabilities, minimizing the window of opportunity for attackers. The reduction in remediation time from 30 to 7 days significantly reduced the risk of exploitation.
• Increased Investor Confidence: The enhanced cybersecurity posture increased investor confidence, reassuring clients that their data was well-protected. This resulted in increased client retention and new client acquisition. Client surveys indicated a 15% increase in confidence regarding data security, directly attributable to the implemented program.
• Estimated Cost Avoidance: We estimate that the program helped Granite Peak avoid at least $500,000 in potential losses from data breaches, regulatory fines, and reputational damage. This figure takes into account potential recovery costs, legal fees, and business disruption expenses associated with a major cybersecurity incident.
• Return on Investment (ROI): The total cost of the cybersecurity program was $75,000 annually. Based on the estimated cost avoidance of $500,000, the program generated a significant ROI of approximately 567%.

Key Takeaways

For other RIAs and wealth managers looking to enhance their cybersecurity posture, consider the following actionable insights:

1. Adopt a Risk-Based Approach: Conduct a thorough risk assessment to identify your most critical assets, vulnerabilities, and threats. Prioritize security investments based on the level of risk.
2. Embrace the NIST Cybersecurity Framework: Utilize the NIST Cybersecurity Framework as a guide for developing and implementing a comprehensive cybersecurity program. This framework provides a structured and risk-based approach to managing cybersecurity risks.
3. Prioritize Employee Training: Invest in regular security awareness training to educate employees about phishing attacks, social engineering, and other common cyber threats. Human error is often the weakest link in a security chain.
4. Implement Continuous Monitoring: Establish a system for continuous monitoring and improvement to ensure your cybersecurity program remains effective over time. Regularly scan for vulnerabilities, conduct penetration testing, and review security policies and procedures.
5. Don't Neglect Incident Response: Develop and test a comprehensive incident response plan to guide your response to cyberattacks. A well-defined plan can help you contain the damage, restore systems, and notify affected parties in a timely manner.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors identify potential security threats and automate compliance tasks. Visit our tools to see how we can help your practice.