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Move beyond the checklist and fully protect yourself from third-party cybersecurity risk
Over the last decade, there have been hundreds of big-name organizations in every sector that have experienced a public breach due to a vendor. While the media tends to focus on high-profile breaches like those that hit Target in 2013 and Equifax in 2017, 2020 has ushered in a huge wave of cybersecurity attacks, a near 800% increase in cyberattack activity as millions of workers shifted to working remotely in the wake of a global pandemic.
The 2020 SolarWinds supply-chain attack illustrates that lasting impact of this dramatic increase in cyberattacks. Using a technique known as Advanced Persistent Threat (APT), a sophisticated hacker leveraged APT to steal information from multiple organizations from Microsoft to the Department of Homeland Security not by attacking targets directly, but by attacking a trusted partner or vendor. In addition to exposing third-party risk vulnerabilities for other hackers to exploit, the damage from this one attack alone will continue for years, and there are no signs that cyber breaches are slowing.
Cybersecurity and Third-Party Risk delivers proven, active, and predictive risk reduction strategies and tactics designed to keep you and your organization safe. Cybersecurity and IT expert and author Gregory Rasner shows you how to transform third-party risk from an exercise in checklist completion to a proactive and effective process of risk mitigation.
The time to talk cybersecurity with your data partners is now.
Cybersecurity and Third-Party Risk is a must-read resource for business leaders and security professionals looking for a practical roadmap to avoiding the massive reputational and financial losses that come with third-party security breaches.
GREGORY C. RASNER is the lead of Cyber Third-Party Risk at Truist Financial Corporation. He has extensive experience in cybersecurity and technology leadership in banking, biotech, software, telecom, and manufacturing. He is the author of several published articles on Third Party Risk and is a sought-after keynote speaker in this area.
Foreword xvi
Introduction xviii
Section 1 Cybersecurity Third-Party Risk
Chapter 1 What is the Risk? 1
The SolarWinds Supply-Chain Attack 4
The VGCA Supply-Chain Attack 6
The Zyxel Backdoor Attack 9
Other Supply-Chain Attacks 10
Problem Scope 12
Compliance Does Not Equal Security 15
Third-Party Breach Examples 17
Third-Party Risk Management 24
Cybersecurity and Third-Party Risk 27
Cybersecurity Third-Party Risk as a Force Multiplier 32
Conclusion 33
Chapter 2 Cybersecurity Basics 35
Cybersecurity Basics for Third-Party Risk 38
Cybersecurity Frameworks 46
Due Care and Due Diligence 53
Cybercrime and Cybersecurity 56
Types of Cyberattacks 59
Analysis of a Breach 63
The Third-Party Breach Timeline: Target 66
Inside Look: Home Depot Breach 68
Conclusion 72
Chapter 3 What the COVID-19 Pandemic Did to Cybersecurity and Third-Party Risk 75
The Pandemic Shutdown 77
Timeline of the Pandemic Impact on Cybersecurity 80
Post-Pandemic Changes and Trends 84
Regulated Industries 98
An Inside Look: P&N Bank 100
SolarWinds Attack Update 102
Conclusion 104
Chapter 4 Third-Party Risk Management 107
Third-Party Risk Management Frameworks 113
ISO 27036:2013+ 114
NIST 800-SP 116
NIST 800-161 Revision 1: Upcoming Revision 125
NISTIR 8272 Impact Analysis Tool for Interdependent Cyber Supply-Chain Risks 125
The Cybersecurity and Third-Party Risk Program Management 127
Kristina Conglomerate (KC) Enterprises 128
KC Enterprises' Cyber Third-Party Risk Program 131
Inside Look: Marriott 140
Conclusion 141
Chapter 5 Onboarding Due Diligence 143
Intake 145
Data Privacy 146
Cybersecurity 147
Amount of Data 149
Country Risk and Locations 149
Connectivity 150
Data Transfer 150
Data Location 151
Service-Level Agreement or Recovery Time Objective 151
Fourth Parties 152
Software Security 152
KC Enterprises Intake/Inherent Risk Cybersecurity Questionnaire 153
Cybersecurity in Request for Proposals 154
Data Location 155
Development 155
Identity and Access Management 156
Encryption 156
Intrusion Detection/Prevention System 157
Antivirus and Malware 157
Data Segregation 158
Data Loss Prevention 158
Notification 158
Security Audits 159
Cybersecurity Third-Party Intake 160
Data Security Intake Due Diligence 161
Next Steps 167
Ways to Become More Efficient 173
Systems and Organization Controls Reports 174
Chargebacks 177
Go-Live Production Reviews 179
Connectivity Cyber Reviews 179
Inside Look: Ticketmaster and Fourth Parties 182
Conclusion 183
Chapter 6 Ongoing Due Diligence 185
Low-Risk Vendor Ongoing Due Diligence 189
Moderate-Risk Vendor Ongoing Due Diligence 193
High-Risk Vendor Ongoing Due Diligence 196
"Too Big to Care" 197
A Note on Phishing 200
Intake and Ongoing Cybersecurity Personnel 203
Ransomware: A History and Future 203
Asset Management 205
Vulnerability and Patch Management 206
802.1x or Network Access Control (NAC) 206
Inside Look: GE Breach 207
Conclusion 208
Chapter 7 On-site Due Diligence 211
On-site Security Assessment 213
Scheduling Phase 214
Investigation Phase 215
Assessment Phase 217
On-site Questionnaire 221
Reporting Phase 227
Remediation Phase 227
Virtual On-site Assessments 229
On-site Cybersecurity Personnel 231
On-site Due Diligence and the Intake Process 233
Vendors Are Partners 234
Consortiums and Due Diligence 235
Conclusion 237
Chapter 8 Continuous Monitoring 239
What is Continuous Monitoring? 241
Vendor Security-Rating Tools 241
Inside Look: Health Share of Oregon's Breach 251
Enhanced Continuous Monitoring 252
Software Vulnerabilities/Patching Cadence 253
Fourth-Party Risk 253
Data Location 254
Connectivity Security 254
Production Deployment 255
Continuous Monitoring Cybersecurity Personnel 258
Third-Party Breaches and the Incident Process 258
Third-Party Incident Management 259
Inside Look: Uber's Delayed Data Breach Reporting 264
Inside Look: Nuance Breach 265
Conclusion 266
Chapter 9 Offboarding 267
Access to Systems, Data, and Facilities 270
Physical Access 274
Return of Equipment 275
Contract Deliverables and Ongoing Security 275
Update the Vendor Profile 276
Log Retention 276
Inside Look: Morgan Stanley
Decommissioning Process Misses 277
Inside Look: Data Sanitization 279
Conclusion 283
Section 2 Next Steps
Chapter 10 Securing the Cloud 285
Why is the Cloud So Risky? 287
Introduction to NIST Service Models 288
Vendor Cloud Security Reviews 289
The Shared Responsibility Model 290
Inside Look: Cloud Controls Matrix by the Cloud Security Alliance 295
Security Advisor Reports as Patterns 298
Inside Look: The Capital One Breach 312
Conclusion 313
Chapter 11 Cybersecurity and Legal Protections 315
Legal Terms and Protections 317
Cybersecurity Terms and Conditions 321
Offshore Terms and Conditions 324
Hosted/Cloud Terms and Conditions 327
Privacy Terms and Conditions 331
Inside Look: Heritage Valley Health vs. Nuance 334
Conclusion 335
Chapter 12 Software Due Diligence 337
The Secure Software Development Lifecycle 340
Lessons from SolarWinds and Critical Software 342
Inside Look: Juniper 344
On-Premises Software 346
Cloud Software 348
Open Web Application Security Project Explained 350
OWASP Top 10 350
OWASP Web Security Testing Guide 352
Open Source Software 353
Software Composition Analysis 355
Inside Look: Heartbleed 355
Mobile Software 357
Testing Mobile Applications 358
Code Storage 360
Conclusion 362
Chapter 13 Network Due Diligence 365
Third-Party Connections 368
Personnel Physical Security 368
Hardware Security 370
Software Security 371
Out-of-Band Security 372
Cloud Connections 374
Vendor Connectivity Lifecycle Management 375
Zero Trust for Third Parties 379
Internet of Things and Third Parties 385
Trusted Platform Module and Secure Boot 388
Inside Look: The Target Breach (2013) 390
Conclusion 391
Chapter 14 Offshore Third-Party Cybersecurity Risk 393
Onboarding Offshore Vendors 397
Ongoing Due Diligence for Offshore Vendors 399
Physical Security 399
Offboarding Due Diligence for Offshore Vendors 402
Inside Look: A Reminder on Country Risk 404
Country Risk 405
KC's Country Risk 406
Conclusion 409
Chapter 15 Transform to Predictive 411
The Data 414
Vendor Records 415
Due Diligence Records 416
Contract Language 416
Risk Acceptances 417
Continuous Monitoring 417
Enhanced Continuous Monitoring 417
How Data is Stored 418
Level Set 418
A Mature to Predictive Approach 420
The Predictive Approach at KC Enterprises 420
Use Case #1: Early Intervention 423
Use Case #2: Red Vendors 425
Use Case #3: Reporting 426
Conclusion 427
Chapter 16 Conclusion 429
Advanced Persistent Threats Are the New Danger 431
Cybersecurity Third-Party Risk 435
Index 445
On December 10, 2020, ESET researchers announce they have found that a chat software called Able Desktop (Able)-part of a widely used business management suite in Mongolia including 430 Mongolian government agencies-was exploited to deliver the HyperBro backdoor, the Korplug RAT (remote access trojan), and another RAT named Tmanger. They also found and identified a connection with the ShadowPad backdoor, used by at least five threat actors in the exploit. Two installers were infected with the trojan and the compromised Able update system was installed with the malicious software. Evidence shows that the Able system had been compromised since June 2020, while the malware-infected installers were delivered as far back as May 2018.
The post explains that HyperbBro is commonly attributed to the cybercriminal group named "LuckyMouse," a Chinese-speaking threat actor known for highly targeted cyberattacks. Primarily active in South East and Central Asia, many of their attacks have a political aim. Tmanger is attributed to TA428, also a Chinese Advanced Persistent Threat (APT) group. Because these two applications are used normally by different APTs and are now together in one attack, the ESET team theorizes that LuckyMouse and TA428 are sharing data and weapons; they are also likely the subgroup of a larger APT. Given the region and threat actors, it is considered to be a political attack that had been planned as early as May 2018, yet not carried out in earnest until two years later.
Advanced Persistent Threat (APT) is the term given to state actors (i.e., government run or authorized hackers) or large cybercriminal syndicates that have a lot of time and patience to perform very stealthy, large-scale attacks aimed at political or economic goals.
On December 13, 2020, FireEye, a global leader in cybersecurity, publishes on its website the first details about the SolarWinds Supply-Chain Attack, a global intrusion campaign inserting a trojan into the SolarWinds Orion business software updates to distribute the malware. FireEye names the malware "Sunburst." After the attackers successfully hacked into FireEye, their activity demonstrated lateral movement and data exfiltration. "The actors behind this campaign gained access to numerous public and private organizations around the world. . This campaign may have begun as early as Spring 2020 and is currently ongoing. . The campaign is the work of a highly skilled actor and the operation was conducted with significant operational security," as explained in the Summary from FireEye's website on December 13th.
The attackers added a .dll file (a configuration file) called SolarWinds.Orion.Core.BusinessLayer.dll to the Orion product, which had been digitally signed and enabled backdoor communications over HTTP (i.e., normal, unencrypted web traffic), to other servers. The Sunburst malware is suspected to have lain quietly for two weeks, while it performed some reconnaissance via executing commands that led to file transfers and to controlling the victim's servers (i.e., reboots, disabling services). Using a native product within Orion, the Orion Improvement Program (OIP), Sunburst blended in with the program's normal functions expertly. It even had the capability to sniff out the antivirus and cybersecurity forensic tools being used, likely to learn how to better go undetected.
"As much as anything, this attack provides a moment of reckoning. It requires that we look with clear eyes at the growing threats we face and commit to more effective and collaborative leadership by the government and the tech sector in the United States to spearhead a strong and coordinated global cybersecurity response," according to Brad Smith, President of Microsoft (December 17, 2020) as posted on his blog about the SolarWinds attack. This attack was used to steal valuable intellectual property from the top-tier security company FireEye. As of the time of this writing, it has been confirmed to have affected dozens of U.S. cabinet-level agencies. Due to the pervasiveness of the SolarWinds product across the world, more breaches will be discovered in the following days, weeks, months, and years to come. Some may never be discovered (or admitted); however, there will be international victims. It is a coup for the suspected perpetrators, thought to be a state actor who used a supply side attack, exploiting the weakness of a popular network and monitoring tool, SolarWinds, to circumvent the tight defenses of the intended victims.
On December 18th, Microsoft released information identifying more than 40 government agencies, higher learning institutions, Non-Governmental Organizations (NGOs), and information technology companies that were infiltrated, with four-fifths of them being U.S.-based, and nearly half of those being tech companies. On his blog, Brad Smith said
This is not "espionage as usual," even in the digital age. Instead, it represents an act of recklessness that created a serious technological vulnerability for the United States and the world. While the most recent attack appears to reflect a particular focus on the United States and many other democracies, it also provides a powerful reminder that people in virtually every country are at risk and need protection irrespective of the governments they live under.
One act of recklessness that he refers to is that this pervasive software, SolarWinds Orion, was clearly not performing its own due diligence and due care to protect itself and its customers, and this product is used by nearly everyone. Further recklessness was that all the customers of SolarWinds were not performing at expectations for cybersecurity's best practice.
If customers had performed some key cybersecurity assessment on a third-party software maker like SolarWinds, this attack could have been detected. Were intake questions asked about the type of data to which SolarWinds had access and where that data might go or be stored? Depending on a company's solution type, asking questions about how the secure software development lifecycle is managed and audited is considered to be appropriate.
With the hardware device, what was SolarWind's supply chain security for the hardware parts and assembly? For the company that had ventured to perform an on-site cybersecurity physical validation of SolarWinds, was any evidence produced on how they performed external security scans (which might have detected the default password on their download page "SolarWinds123")? Who performed these external scans? The company? Or did they hire an outside firm and were the results viewable? Often, such companies will not share these results, so you must negotiate to at least see the Table of Contents, who performed such security scans, and when.
Final question: Had SolarWinds remediated all the findings in the external security scan? While this is not the first time a breach has occurred, the scale of the SolarWinds breach will dwarf all others.
On December 17, 2020, ESET Research announced it had detected a large supply-chain attack against the digital signing authority of the government of Vietnam (ca.gov.vn), the website for the Vietnam Government Certification Authority (VGCA), which is part of the Government Cipher Committee under the Ministry of Information and Communication. Vietnam has made the digital leap, and almost anyone in the country who requires a government service, product, or approval is required to use a digital signature. These e-signatures have the same authority and enforceability as a traditional paper document autograph according to government decree.
The VGCA also develops and makes available for download a toolkit to automate the process of e-signatures. This toolkit is widely used by the government, private companies, and individuals. VGCA's website was hacked as early as July 23rd, and no later than August 16, 2020. The compromised toolkits contained malware known as PhantomNet, and SManager ESET confirms that the files were downloaded from the VGCA website directly, and not the result of a redirect from another location. While these infected files were not signed with proper digital certificates, it appears that prior files were not correctly signed either. This may have led to users not rejecting the improper digital certificates of the trojan-infected files because they behaved the same before the malware was added.
When an infected file was downloaded and run, the correct VGCA program ran along with the malware. This masqueraded the trojan to the end user because they saw the normal program running correctly, being unaware of the trojan or unlikely to look for it because the program appeared to be running normally. The file eToken.exe extracted a Windows cabinet file (.cab), which was used as an archive file to support compression and maintain archive integrity. The file 7z.cab was the file that contained a backdoor for the attackers to exploit. The attackers went to great lengths to ensure that the backdoor ran, regardless of the user's privileges on the device.
If the 7z.cab file was able to run as an administrator on the machine, the program wrote the backdoor to c:\Windows\appatch\netapi32.dll, which then registered it as a service to ensure it kept running after any reboot. On a device that only allowed...
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