How One Midsize Bank Protects Against Hacks

In light of ongoing hacktivist attacks on major banks, Lake Trust Credit Union information security pro shares insights on how a smaller bank stays secure without too-big-to-fail resources.



It's a tough gig to be responsible for information security at a midsize bank, but someone's got to do it.

In this case, that someone is Richard Reinders, information security analyst at Lake Trust Credit Union. The Great Lakes-area financial institution has about 400 employees and $1.5 billion in assets. In comparison, Wells Fargo has 265,000 employees and $1.3 trillion in assets.

Here's the rub: A bank of Lake Trust's size faces many of the same security threats as its much larger brethren. The same holds true for regulatory requirements and related issues.

Banks and their customers make juicy targets for online criminals and the various weapons they use, such as malware, phishing, and social engineering. Compounding the issue is the fact that a targeted attack isn't always just a matter of money. Witness the recent hacktivist attacks against big banks, Wells Fargo among them.

[ Every SMB is a potential target of cyber attack. Learn the threats. 10 Cyber Threats Small Businesses Can't Ignore. ]

I asked Reinders to share a peek at information security operations for a smaller regional bank. In a combination of phone and email interviews, he discussed how Lake Trust keeps risks in check while continuing to meet its members' needs, such as 24-7 account access and mobile banking.

Keeping this balance involves a healthy mix of technology and human effort. The latter often takes the form of training and education, though not of the brown-bag lunch variety that typically put employees to sleep. For example, Reinders ran a socially engineered phishing scam on Lake Trust employees--it was a simulation, of course, but it was a good one, complete with a dummy website and other details. He then shared the results within the organization to help create awareness of email's persistence as a threat vector.

IW: What are your biggest security challenges as a smaller bank?

Reinders: The challenges a smaller financial institution faces are similar to those of larger ones. Recently the FBI released a statement that criminals are now targeting smaller organizations with the same intensity and skill set. We’ve already been seeing that in some of our logging, like [with] our intrusion detection system and our tracking of more sophisticated phishing attempts. Our Help Desk, for example, is there to help people out. That kind of purpose ends up being abused by individuals who try to socially engineer information. I think [phishing] is back because it's so effective. If an email is enough to compromise an organization like RSA, who are supposed to have security top of mind, then you know it is something that will get you results.

IW: How do you solve those problems with limited resources?

Reinders: Resources are a constant issue, but most organizations are trying to come to terms with that. The ability to truly understand the issues and how to resolve them becomes critical. Knowing the risks will allow you to rank, prioritize, and resolve them in the most efficient fashion.

IW: You've done some interesting things in terms of security awareness and training among employees and members. Can you share examples?

Reinders: We actually spend quite a bit of time on that. We do a yearly security training where we talk about things like mobile devices and passwords. Then as [specific risks] come up, we send out notices. We try to do that sparingly because you don't want to numb the recipient [with] a constant barrage of things to watch out for. We do constant testing [on] ourselves. We've had people dress up as exterminators and go to every floor in one of our administrative buildings [looking for vulnerabilities].

Education includes members and involves a yearly security week that uses our blog, Twitter, and Facebook. We also have an online security center on our website that is accessible from the home page. We have a few plans for the future to further expand what we do for our members.

Ed. note: Reinders also ran a simulated spear phishing attack on employees without notifying them in advance. He sent an email that solicited staff feedback on a potential new product, complete with a fake website that used content that would be available to any actual attacker, such as the logo on Lake Trust's real website. Such training exercises appear to work well: Within 15 minutes, an employee had escalated the phishing email as suspicious to both the IT and risk management departments, as well as directly to Reinders.

IW: Do the recent hacktivist attacks on large banks concern you?

Reinders: Somewhat. We are a non-profit financial cooperative, owned by our members, so we care a lot about doing the right thing for them. It is my hope that most hacktivists would recognize that and not make us a target for perceived harms caused by financial institutions. That said, sometimes there are misunderstandings and we could become collateral damage.

There is a very big range in the level of sophistication, and security professionals do need to recognize that there are highly skilled individuals involved with hacktivism. The techniques that hacktivists have been using are not necessarily new; they may be sophisticated, but they're not necessarily something different. [A denial-of-service attack] or a SQL injection is not new. They just happen to leverage it really well and know how to get the media involved.

I think our playbook is to do right by our members and keep an eye out for any vulnerabilities that already exist or [methods] that are already being exploited.

IW: Can you explain Governance, Risk Management, and Compliance (GRC) to someone outside the field? How do you manage it as a midsize bank?

Reinders: GRC does not compress down to an elevator speech without having to leave things out. In short, you have regulatory requirements to meet and a myriad of risks you face externally and from the way an organization is run. You attempt to deal with these issues through proper management. Many organizations are struggling to come with a cohesive response. In our case we have worked to show the organization how GRC actually benefits everyone, how it is not restrictive but can be an enabler of opportunities. We are now also starting to leverage tools like TraceCSO to reduce our costs by centralizing efforts, cutting out piecemeal solutions. It also helps ensure we are meeting or exceeding every regulatory requirement in a non-time-consuming manner.

IW: What are the critical technologies for your industry moving forward? How are you planning to leverage them?

Reinders: Our critical technologies are based on member demand. As we are owned by our members, we grow in the areas where they have a need. Mobile banking is something we see demand for, so now we offer mobile apps, and that of course comes with its own challenges. There are a variety of new mobile and online services and products in the pipeline. To a member, their concern is not how something is offered—say, cloud computing or an in-house virtual machine--but whether it is convenient and secure.

Organizations challenged by meeting the requirements of multiple regulatory mandates are increasingly looking at the alignment of governance, risk, and compliance under a unified framework, GRC.In our report, A Security Pro's Guide To GRC, we examine where the security professionals figure into the mix and recommend the steps organizations should take to align IT GRC with existing security programs and processes. (Free registration required.)

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