In recent years, the financial marketplace has witnessed a surge in cyber threats, prompting regulators to emphasize the importance of robust cybersecurity measures within the industry. Registered investment advisory (RIA) firms, in particular, are entrusted with sensitive financial data, making them attractive targets for cyber-attacks. To fortify their defenses, RIA firms must establish and maintain comprehensive cybersecurity compliance programs.
One key tool in achieving this is the National Institute of Standards and Technology (NIST) Framework, which provides a structured approach to identifying, assessing and managing cybersecurity risks. This framework is continually refined through collaboration with stakeholders from government, industry and academia. By implementing these functions, firms can create a robust defense against the evolving landscape of cyber threats.
Understanding the NIST Framework
The NIST Framework is organized into five key functions, each playing a crucial role in fortifying a firm’s cybersecurity compliance program:
- Identify.
The first key function requires that RIA firms develop an organizational understanding to manage cybersecurity risks regarding systems, people, assets, data and capabilities. RIA compliance teams should conduct a thorough risk assessment to identify potential weaknesses and prioritize areas that require heightened security measures.
2. Protect.
The second key functions requires that RIA firms develop and implement appropriate safeguards to ensure delivery of critical services. Once vulnerabilities are identified, the next function involves developing and implementing appropriate safeguards.
RIA firms must ensure the delivery of critical services by establishing robust security protocols. This includes encrypting sensitive data, implementing access controls and regularly updating and patching systems to protect against evolving cyber threats.
3. Detect.
The third key function requires that RIA firms develop and implement appropriate activities to identify the occurrence of a cybersecurity event. Detecting cybersecurity events is crucial for timely response and mitigation.
RIA firms should deploy activities and technologies that enable the identification of potential threats or breaches. Continuous monitoring, intrusion detection systems, and security information and event management (SIEM) tools are essential components of an effective detection strategy.
4. Respond.
The fourth key function requires that RIA firms develop and implement appropriate activities to take action regarding a detected cybersecurity incident. In the event of a cybersecurity incident, RIA firms must have a well-defined response plan. This involves developing and implementing activities to take prompt action when a threat is detected. The response plan should outline procedures for isolating affected systems, notifying relevant stakeholders and collaborating with cybersecurity experts for containment and resolution.
5. Recover.
The fifth key function requires that RIA firms develop and implement appropriate activities to maintain plans for resilience and restore any capabilities or services that were impaired due to a cybersecurity incident. The final function centers on recovery activities. RIA firms should maintain plans for resilience, outlining steps to restore any capabilities or services that were impaired due to a cybersecurity incident. Regular testing of these recovery plans ensures their effectiveness when needed, minimizing downtime and potential financial losses.
RIA firms can significantly bolster their cybersecurity compliance programs by adopting and implement the NIST Framework’s five functions within their overarching cyber strategy – creating a robust defense against the evolving landscape of cyber threats.
Complying with COMPLY™ portfolio
In an era where data breaches and cyber-attacks are on the rise, a proactive and comprehensive approach to cybersecurity is not just a regulatory requirement but a critical necessity for safeguarding both the firm’s and its clients’ data.
At COMPLY, we’ve made creating and maintaining your firm’s cybersecurity compliance program easier. Download The Ultimate Guide to Cybersecurity Compliance for further guidance.
Not only that, but COMPLY offers tailored consulting and technology services to meet your firm’s specific needs. Regardless of your RIA firm’s complexity, risk profile or size, COMPLY offers services to help your firm identify and address compliance risks. For instance, our RIA cybersecurity solution arms your firm with the technology and knowledge you need to defend against potential cyberattacks. By utilizing COMPLY’s solutions, your RIA firm can ensure it protects its own and its clients’ data.