4GW: The Spectrum of Cyber Risks...

CyberSpace is indeed a "Strategic National Asset” and protected by our United States Cyber Command (USCYBERCOM).

OPS Risk Managers across the private sector of the USA are dealing with transnational non-state actors (in some cases funded by nation states) that are robbing our private sector and government agencies blind. Stealing Personal Identifiable Information (PII), Corporate Intellectual Property, Defense R & D and classified State secrets. 

The commander of our US Cyber Command has an even bigger job; protecting and defending our country's vital Digital Infrastructure. This nexus of criminal, terrorist and irregular warfare is being waged on a 24/7 basis here in our homeland.

So how do you go about fighting this 4th Generation (4GW) war comprised of well organized, decentralized, clandestine subjects operating in the cyber shadows?

This begins with creating an effective Information Sharing Environment (ISE), a fusion of who, what, when, how, where and maybe why. Defending the nation against the physical attacks of the likes of Al-Qaida or the virtual attacks from nation states has some very interesting similarities.

If the USCYBERCOM is going to take the fight to those who wish to copy, delete, probe, scan, flood, bypass, steal, modify and spoof their way across our Digital Infrastructure, it shall be charged with pulling together existing cyberspace resources, creating synergies and synchronizing war-fighting effects to defend the information security environment.

Whether our troops are fast roping out of helicopters or behind the flat screen detecting and analyzing the stealth cyber attack, the approach to defeating the adversaries is much the same.

Infiltrating the "cells" and collecting valuable INTEL on the global enemy is what gives us the "Ground Truth." The commander for USCYBERCOM is already educated on the private sectors role in achieving this continuous and lofty goal of creating more decentralized and clandestine citizen soldiers.

As the private sector battles the non-state actors for preservation and protection of valuable intellectual property and customer data, corporations are simultaneously being attacked by adversarial plaintiff lawyers.

The private sector would enjoy having our government involved in more proactive efforts to seek out and stop these criminal and terrorist entities that prey on organizations that remain vulnerable.

The Operational Risks associated with litigation in the corporate enterprise are here to stay.

If the public and private sector can once and for all coordinate, collaborate and "Share Information", we can disrupt, capture, prosecute and defeat our cyber adversaries…

PII: Achieving a Defensible Standard of Care...

A data security breach of "Personal Identifiable Information" (PII) will impact your organization in the future. This incident is no different than other Operational Risk loss events to your global enterprise this year, such as occupational fraud or the settlement of a lawsuit.

Correct?

This time however, the difference is that now your own employees or your customers are the victim. Their PII has been lost or stolen and your organization has been the safeguarding entity of that valuable data until now. Your response is vital and the way you legally and ethically behave is a significant risk factor in itself.

Your brand reputation in the marketplace is on the line and the potential churn in lost customers or employees is at stake. Like many post 9/11 companies, your crisis response protocol is already in place for incidents that require your senior executives and the establishment of an immediate Incident Response Team (IRT).

So why is lost or stolen PII such an important executive issue for any organization?

In privacy, PII is less restrictive than in Information security and one definition can be found in the EU directive 95/46/EC:^[1]

"Article 2a: 'personal data' shall mean any information relating to an identified or identifiable natural person ('data subject'); an identifiable person is one who can be identified, directly or indirectly, in particular by reference to an identification number or to one or more factors specific to his physical, physiological, mental, economic, cultural or social identity;"

Although the concept of PII is ancient, it has become much more important as information technology and the AI-powered Internet have made it easier to collect PII, leading to a profitable market in collecting and reselling PII.

PII can also be exploited by criminals to stalk or steal the identity of a person, or to plan a person's murder or robbery, among other crimes. As a response to these threats, many web site privacy policies specifically address the collection of PII, and lawmakers have enacted for decades a series of legislation to limit the distribution and accessibility of PII.

As your General Counsel and Chief Privacy Officer begin to assess the magnitude and breadth of your recent PII exposure, so too does the plaintiff lawyers. Now the clock starts ticking and each tick gets louder and louder, as different litigation strategies are discussed. In Board Rooms and judges court chambers across the United States, the Federal Rules of Civil Procedure (FRCP) and the admissibility of "Electronically Stored Information" (ESI) is being discussed as a legitimate component of evidence and it's relevance in the case.

What if you could now "Rewind" this scenario and find yourself in a "legal safe zone" to adequately prepare, prevent and even preempt a "Data Security Breach" in your organization. This "legal safe zone" is available today and is as close as your corporate executive conference room, with several "Subject Matter Experts" working side-by-side. It's a professional service solution from a data breach services leader.

The "Achieving a Defensible Standard of Care" Readiness workshop in your organization begins with a two day facilitated process for discovery and convergence with your fellow company executives.

You will be engaged in a proactive, preventive and preemptive tactical plan in preparation for the day of your next PII-involved Data Security Breach. Upon completion, this operational plan establishes the baseline framework for a complete team-based drill.

This outcome will then test the readiness of your key stakeholders internally and external to the company. More importantly, it provides the strategic insight on what vulnerabilities still exist in your particular organizations approach to remediation and legal compliance.

Each year, despite security efforts, millions of personal records are compromised as a result of corporate and public-sector data breaches. Breach response costs - mandated notification, PR, call handling, credit monitoring and legal fees - can add up, yet traditional approaches don't fully mitigate the risk to your business or your customers.

A data security breach of "Personal Identifiable Information" (PII) will impact your organization in the future. The next one will be different…

Innovation: Truth in Data Provenance...

For years mathematicians and computer scientists have written about the trustworthiness of “Data Provenance”.

Relying on the integrity of data collection, transport and of course the source of data is a real science.  Our modern day zeros and ones span all aspects of our lives and Operational Risk Management (ORM) professionals have encountered the questions surrounding trust and the process of decision making long before the invention of computing machines.

At the root of decision making with integrity the source of data is questioned.  The reliability and history of previous data from the source.  As the data was transported from Point A to Point B was there any possibility that the data was altered, modified or corrupted.

Couriers and the use of a "Hawala" type system have been used by traders and terrorists for hundreds of years.

"Truth in Data Provenance" is the question mark that enables trust decisions.  This is why modern day cryptography is at the center of so many arguments and debates, when it comes to the topic of trusted information.  Yet hundreds of years ago, long before telecom and ICT was invented, the trustworthiness of data provenance was a vital factor.  The use of transposition ciphers were in use by the ancient Greeks.

So what?  In 2026 what does the truth in data provenance have to do with our business commerce, our transportation, our banking, even our abilities as governments to maintain our defense against attack?

The topic is vast and deep and worth exploration at the top level of human decision-making.  Yes, it is vital that our computing machines have high-assurance data integrity, in order for our global systems to operate day-to-day.

Yet what impact does trusted information have with humans in an environment of work and daily collaboration?  How does truth in data provenance, affect our decision making and the environments we work in?

In a report by LRN, the subject of trust in the work environment as a motivator has become more apparent:

Another fascinating result of the study had to do with two squishy-sounding characteristics of a company: character and trust. Companies deemed by employees to have both strong character and inspired trust performed almost four times better, using the metrics mentioned earlier, than those that had other positive cultural attributes, such as collaboration and celebrating others. (This applied to all three types of companies, though, naturally, culture and trust were much more prevalent in the self-governing ones) What’s more, “high trust” organizations were 11 times as likely to be called more innovative than their competitors. Trust, the How Report suggests, is more important than virtually any other characteristic.

How organizations address the trustworthiness of data provenance is still a new frontier in this day and age.  The use of new sensors, sophisticated analysis of "Big Data" by computer algorithms (AI) and the pace at which new data is generated by the "Internet of Things" (IOT) makes this a significant area of focus for our current executives and enlightened organizational leadership.

Why?

But what does that really mean? How does one measure the absence or presence of something as abstract as trust? The How survey defines it as “a catalyst that enhances performance, binds people together, and shapes the way people relate to each other.” High trust groups encourage risk-taking, which in turn is what is necessary for true innovation to occur. When innovation fails, it’s because companies don’t put enough faith in employees to let them take risks. The industries with the highest amount of trust were “computers/electronics,” followed by “software/Internet.” Coming in last? Government.

At the most fundamental level, the culture you are operating in has all to do with the trust that exists or is absent.

It has all to do with the trustworthiness of data provenance.  Leadership in any organization, must see the relevance between trust and innovation.  Between innovation and risk-taking. 

Your future and your culture depends on it...

Reputation Risk: Organizational Stewardship Revisited...

Reputation risk is becoming more of a topic of discussion these days. The loss of reputation results in several outcomes both economic and personal. The fact is that most of the time organizations are "Reacting" to a crisis, news leak or some other corporate failure.

You don't have to name names of people or companies to understand the impact that reputation has on the success or demise of an organization. What has to change to lower the severity and likelihood of loss events associated with "Reputation"?

First you have to ask yourself a couple of key questions:

1. What is your reputation worth?
2. Are you being Proactive or Reactive in managing and safeguarding your reputation?

The PR and marketing communications processes in your organization may have certain facets of the solution to better reputation risk management. However, these processes are designed with out the consciousness of proactive threat anticipation, detection, prevention and remediation.

What has become more clear to executives in proactive oriented companies is the requirement for a specific and strategic approach to Reputation Risk Management. This approach encompasses an emerging theme from the early nineties pioneered by author Peter Block. We call it Organizational Stewardship.

Organizational Stewardship as a core guiding principle is the cornerstone in managing an institutional reputation risk management process. It has three components that support this rekindled idea of applying the concepts of stewardship to the organization:

• Economic Accountability
• Information Management
• Business Integrity

Reputation Risk Management is about the proactive monitoring and management of a portfolio of threats in the organization. Several categories include:

1. Intellectual Property and Information Assets
2. Demonstrations, planned boycotts and social activism
3. Physical infrastructure including employees and suppliers
4. Legal threats including class actions, insider trading or whistle-blowers

Microsoft closed its free Internet chat rooms in 28 countries many years ago because of threats from pedophiles and junk e-mailers. This is an example of proactive reputation risk management. Unfortunately, this has opened the door to another related threat of hackers hijacking other Social Media accounts.

"Organizational Stewardship is a guiding principle. Once it is embedded into the organization it begins to permeate the mindsets of the individuals who are responsible for the conscious reputation risk management processes. Over time, these individuals help influence the corporate mindset, philosophy and ethics to a new found level."

Someday soon the executives in the board room will realize that managing reputation is not about keeping secrets and fighting fires. 

They will realize that they need to find a proactive, preventive and relevant strategy for achieving Organizational Stewardship in their company.

Intelligence Sharing: Responsibility to Provide...

Back in the summer of 2008, the "Need to Know" was now finally becoming extinct. Intelligence Communities around the globe began ever so slightly changing their behavior.

The Office of the Director of National Intelligence (ODNI) had released it's Information Sharing Strategy:

The Office of the Director of National Intelligence was announcing the first-ever strategy to improve the ability of intelligence professionals to share information, ultimately strengthening national security.

The "Responsibility to Provide" attitude combined with a "Rule-set" reset could get the entities moving the right direction. Risk Managers in institutions in the private sector have been grappling with this business issue for multiple decades.

The reality that the FBI, NSA, CIA and DHS are sharing more effectively will only be evident in actual behaviors, not technology.

The new mantra "Responsibility to Provide" would be repeated over and over but where is the evidence?  

The culture shift was predicated on the ability to manage risks associated with mission effectiveness and disclosure of sensitive information. A Trusted Environment.

This new information sharing model is not revolutionary and requires the same care with privacy, information security and civil liberties that we all expect when it comes to personal identifiable information.

Adding new incentives to share information or rewards for doing so will soon be the norm and the behavior changes will be evident. Great care will be given to the ability to protect sources and methods of collection.

Creating a "Single Information Environment" (SIE) will improve the ability for analysts and investigators to get access earlier and to discover what exists. Enhancing collaboration across the IC community would be a strategic goal and has been a dream for over twenty years.

So let's go back to the "Trust Model" for a minute:

• Governance: The environment influencing sharing.
• Policy: The "rules" for sharing.
• Technology: The "capability" to enable sharing.
• Culture: The "will" to share.
• Economics: The "value" of sharing.

A 500 day plan was then in place. The integration has now been reemphasized even today. Let's make sure that our vigilance continues and on this Martin Luther King Jr. weekend, our spirits are reenergized...

Proactive Measures: Beyond the Perimeter...

Operational Risk Management requires both proactive and passive measures that encompass a comprehensive organizational strategy. Odds are that you have devoted a majority of your time and resources to this point on the passive mode of preparedness and defense. A reactive and alert oriented focus. The time has come to change the priorities and to increase the allocation of strategy on the "Active Measures." Why?

Stuxnet is and was ground zero for a new generation of digital infrastructure cyber weapons.

The attribution game is still going on with several suspects on who actually developed, tested and deployed "Stuxnet." This is not as important as the realization that sitting back and waiting for the next variant or hybrid cyber weapon to attack your critical infrastructure assets in passive mode.

"The most advanced organizations are now taking the "Proactive" stance to not only detect changes in their environment in a more real-time mode, but they are starting to hunt down the attackers."

There is a decision point where you realize that the passive mode will not buy you time nor will it redirect your attackers to other more vulnerable assets. Your organization will continue to operate with the goal of serving your clients, members or customers yet simultaneously a "SpecOPS" team of internal experts will be monitoring, measuring and exercising tactics to legally neutralize the threat before them.

Commercial and non-governmental entities are creating the means and the capabilities to deter, detect and document who is attacking their digital systems and where they can be found. This intelligence is being shared within the private sector organizations to determine fingerprints, modus operandi and other evidence that is required to effectively hunt down the attackers. The next challenge will be how to package this and make sure that the proper authorities are notified in a timely manner.

There is no longer a solution that is wide enough or in depth enough to be distributed across a whole spectrum of companies or organizations. The answers will be specific, customized to the unique environment and infrastructure that comprises a particular enterprise.

In order for that specification to be developed internally and provided to the correct people, you have to have the internal mechanisms in place to know in real-time what is changing and how fast it is changing from the normal state.

Is your view beyond your own perimeter? Are you looking for the anomalies that are over the horizon and could impact your network soon? It's one thing to look at the changes to your own perimeter but what about the intelligence on providers and ISP's somewhere on the other side of the planet? Do you know where your packets are going and how they are being routed?

"In a savvy Operational Risk Management enterprise, the "Corporate Intelligence Unit” (CIU) is alive and thriving."

A proactive intelligence-led investigation doesn't begin with a phone call from someone who say's, "My system is down" or "What does this Blue Screen mean”?

It doesn't start when your VP, Research & Development suddenly leaves the company for no apparent reason. Intelligence-led operations will continue to be the aspiration of many, yet only possessed by a few.

operational risk

Black Swan: Strategy Execution for the "Outlier"...

The Black Swan is a surprise event and the idea that a catastrophe can strike without warning. A professional colleagues recent presentation was a timely reminder of its history and the origins.

What does your organization plan for within the Operational Risk Management (ORM) discipline? The Low Consequence “High Frequency Incident” or the High Consequence “Low Frequency Incident”?

The ratio can tell you what your "Resilience" factor is to Operational Risk loss events. Key Performance Indicators (KPI's) can give you some forward looking view into the risk portfolio, yet what about the resilience to the "Black Swan"?

The “Back Swan” is a highly improbable event with three principal characteristics:

It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was.

"The astonishing success of Google was a Black Swan; so was 9/11.  For author Nassim Nicholas Taleb, black swans underlie almost everything about our world, from the rise of religions to events in our own personal lives."

"Why do we not acknowledge the phenomenon of black swans until after they occur? Part of the answer, according to Taleb, is that humans are hardwired to learn specifics when they should be focused on generalities. We concentrate on things we already know and time and time again fail to take into consideration what we don’t know. We are, therefore, unable to truly estimate opportunities, too vulnerable to the impulse to simplify, narrate, and categorize, and not open enough to rewarding those who can imagine the “impossible.”

Your organization is no doubt spending time on the Operational Risk Management (ORM) events, that consistently are in the high frequency "In Your Face" category.

In a highly regulated industry sector such as finance, health care or energy the oversight mechanisms require a continuous analysis of risk based upon the criticality of these sectors to the overall resilience of the economy.

"Yet it is the "Outlier" incident, that comes at the most unexpected time that is the real threat and the incident catalyst, that could be your "Black Swan”."

You never know when it is going to be coming, so you must plan, prepare and imagine that someday, it will happen.

Enabling Global Operational Risk Management (ORM) requires thinking beyond models and outside the box analysis of the "Resilience Factor," should an outlier impact the organization, the state or the country. The resources, personnel and systems focused on these areas of risk are small today. But not for long.

Just ask those people who had been working 24/7 since on any major incident.  It could have been the 9/11, "Fukushima"or "Lehman Brothers" crisis. Or more importantly, the plaintiff lawyers preparing their briefs for the inevitable aftermath of litigation over who knew what, when?

Another lesson learned from Supply Chain Risk.  Losing control of sensitive customer data is a fact of life for American companies. They’re collecting more of it, and they are often outgunned by nation state hackers, who are highly motivated to get at it.  Perhaps a vector through your most trusted supply chain vendors and partners.

One prediction into the future could be that litigation will follow all "Black Swan" incidents. If you are in a highly vulnerable industry sector, because it's part of the Critical Infrastructure of the global grid, then you already know you are in the middle of the target zone.

What is amazing to many in the after-action reporting is still how much we continue to under estimate the magnitude of a lack of planning and resources devoted, to these low frequency high consequence events…

Pain or Joy: Change Management 101...

Habits are hard to change.  It takes discipline and continuous perseverance.

When was the last time you changed something that increased your revenue?  Your health.  Or your safety and security.

Change and managing change whether in the corporate ranks of your Fortune 500 Global Enterprise or back in your own personal life at home is a true challenge.

Before you even thought about what you needed to change in your business or your own life, you probably have encountered one of two experiences:

• Pain

• Joy

Which one of these two experiences have you recently encountered?

You see, our human behavior is quite predictable and it is usually one of these two motivators in life that will change your behavior.

Educating yourself and others you care about requires that you sometimes utilize one of these motivators in order to initiate new change.  Let’s begin with “Pain”.

These realities are exactly what the evil in our world today continues to prey on.  Those individuals who are unable or unwilling to change, and to manage change in their lives.

“It is really very simple. In the foreseeable future, we will not function as a global society without the Net and the immense digital resources and information assets of our society. The addiction is established—commerce, government, education, and our neighbors offer no option other than to require that we rely upon digital information in making decisions. But we will not function successfully if the war for control of those assets is lost. The battlefield, however, is the one on which trust is to be gained or lost—trust in the information we use, trust in the infrastructures that support us, and trust in the decisions we make in a digital world.”  Page 19 - Achieving Digital Trust | The New Rules For Business At The Speed Of Light  - Author Jeffrey Ritter

In your own digital life, these habits may be as simple as using the same password on multiple accounts that each of us rely on, each day or each week of our lives.  You know who you are.

As the continued use of “Ransomware” remains so pervasive across the globe and is utilized by so many criminal gangs and nation states, each one of us must consider our personal and business habits.

At home and at work.

It is now time to change.  It is time to change your digital habits so you may avoid the pain and continue to have even more joy in your life.

Take action.

Start a new habit now of changing the weak password on your bank accounts.  Make it 20 characters, and make it random.  Easily addressed when you "Use a Password Manager App".  Then set a reminder to change it on January 1, April 1, July 1, and October 1 of each year.

“Microsoft warns that ransomware threat actor Storm-0501 has recently switched tactics and now targets hybrid cloud environments, expanding its strategy to compromise all victim assets.

The threat actor first emerged in 2021 as a ransomware affiliate for the Sabbath ransomware operation. Later they started to deploy file-encrypting malware from Hive, BlackCat, LockBit, and Hunters International gangs. Recently, they have been observed to deploy the Embargo ransomware.

Storm-0501's recent attacks targeted hospitals, government, manufacturing, and transportation organizations, and law enforcement agencies in the United States.” —BleepingComputer

After you have successfully accomplished this simple task in your business and in your own personal life, remember:

The “Pain” of doing this simple “Change Management” step in your life, will help bring you continued “Joy” for so many years to come…:)

Godspeed!