How Wall Street Works With The Feds

For the most part, the relationship between the federal government and financial services industry isn't one built on mutual trust. The government has been criticized for being too hands-off, even permissive, but it's hardly a close-knit partnership.

When it comes to cybersecurity, however, the dynamic is different. Financial services companies are sharing information about sensitive IT security issues with the government, and federal agencies are sharing data and intelligence on cybersecurity threats with banks, brokerage firms, and other Wall Street institutions.

The broker of this public-private exchange is the Financial Services Information Sharing and Analysis Center (FS-ISAC). Created in 1999 after a presidential directive called for information sharing between the feds and the private sector, FS-ISAC has a security operations center and a Web portal that its members use to monitor computer threat feeds from a variety of commercial and government sources.

FS-ISAC members use the portal to submit details on cyberattacks they have experienced, including how the attacks were detected and their companies responded. Submissions to the portal, for example, might provide the IP addresses associated with the source of attempted intrusions, and they often center on topics such as fraud activity and malware analysis. This information is shared within the industry, as well as with the Treasury Department, FBI, Secret Service, and Department of Homeland Security.

FS-ISAC isn't a government entity, nor is it overseen by a federal agency. It's a nonprofit owned by its private-sector member companies and run by a board of directors drawn from its membership.

The Web portal serves as a clearinghouse of information such as alerts and bulletins from US-CERT and the Homeland Security and threat feeds from security vendors such as VeriSign. FS-ISAC also uses it to send bulletins with best practices and other information to members.

The portal can be customized to present the alerts and advisories of most interest to members. Dan DeWaal, first VP and chief security officer with Options Clearing Corp. (OCC), the world's largest equity derivatives clearinghouse and a founding member of FS-ISAC, says his information security team monitors threats and system vulnerabilities, while his business continuity team examines feeds that deal with physical and operational issues.

Reluctance To Share

It took time for banks and other financial institutions to get comfortable sharing sensitive information over the FS-ISAC portal, says William Nelson, CEO of the nonprofit since 2006. "It's been a hard nut to crack," he adds.

In the early going, some members, concerned about tarnishing their corporate image, were reluctant to share information on cyberthreats and related incidents. Submissions dripped into the portal about once every six months. That's changed as understanding of the process and its value have grown, and as more companies have gotten involved. Its ranks have swelled over the past five years from 68 to 4,200 members.

One reason financial firms have become more comfortable sharing information about cyberattacks and vulnerabilities is that submissions to the portal can be made anonymously. Participants also can choose whether to share their submissions with all FS-ISAC members or just select groups. And they can decide whether the information gets passed along to government agencies.

Most submissions to the FS-ISAC portal are done so anonymously, says DeWaal of OCC, which regularly submits information to the organization. In fact, an FS-ISAC submission is now a regular component of the company's incident response plan. OCC submits anonymously sometimes and for attribution at other times, depending on the sensitivity or severity of the threat. "In general, when we submit anonymously, OCC shares with government sources," DeWaal says.

Budding Partnership

Nelson, FS-ISAC's CEO, cites several examples of close cooperation with the government. In 2008, security researcher Dan Kaminsky discovered a flaw in the Internet Domain Name System that could be exploited by attackers to redirect traffic. "We went through Treasury and our government contacts to work with the ISPs to get them to prioritize a fix," Nelson says. "We got a lot of support from US-CERT and DHS."

In late 2009, a rash of cyberattacks by criminal gangs in Eastern Europe targeted commercial bank accounts. The FBI asked for help in raising awareness of the attacks, and FS-ISAC formed a task force and developed a set of recommendations on how to respond, which it distributed through the American Bankers Association, the U.S. Chamber of Commerce, and community banks nationwide.

The government provided us with intelligence, and we produced a bulletin to release to everybody, even the media," Nelson says. "It became a milestone for the government to say, 'We can trust FS-ISAC.'"

Nelson recently met with the U.S. Secret Service to share information on attacks against retail point-of-sale systems that were being hijacked and used for credit card fraud. "If you identify a bunch of merchants that have been hit, and you total the losses, you can build a case and go after these guys," he says.

FS-ISAC members also benefit from their interactions with each other. The group's Threat Intelligence Committee meets every two weeks by teleconference, and more often when situations warrant, such as during the WikiLeaks uproar, when activists launched distributed denial-of-service attacks against Visa and MasterCard.

OCC's security operations manager sits on the Threat Intelligence Committee. "We can be frank about what we're seeing and what's happening and not worry about proprietary issues," DeWaal says.

He cites an event last fall when a zero-day worm struck. "When we started seeing activity, we checked in with the Threat Intelligence Committee over a couple of days to share observations and quickly get in front of it," he says. "Between us, we were able to determine the source of the attack and the payload." An antivirus vendor provided forensics on an emergency basis to help with the response. "The AV companies were learning about it at the same time we were," DeWaal says.

Beyond Info Sharing

What does the relationship look like from the government's perspective? Given that 85% of the nation's critical infrastructure is owned and operated by the private sector, "we can't execute our mission without public-private partnership," says Jenny Menna, director of critical infrastructure cyber protection and awareness with Homeland Security's National Cyber Security Division.

Toward that end, the National Cyber Security Division aims to take an even more active role in working with companies that operate critical infrastructure, such as utilities. Its largest program for critical infrastructure is the one for securing control systems, which monitor and run devices and processes used by utilities, manufacturers, and industrial operations. The DHS works with vendors and operators that build control systems software, and it has a facility at Idaho National Laboratory, where it tests software, dissects malware, and develops and shares mitigation strategies. The agency also runs training programs for energy sector operators and has trained more than 10,000 staff in basic and advanced security.

"We have people on the road doing site assessments, working with owners and operators to look at their security posture," Menna says. The department conducted more than 50 site assessments last year. In addition, Menna's team responds to security incidents, remotely or on site, by providing support and helping with remediation.

The DHS sees its role as going beyond threat assessment and response. Menna talks of helping companies "make the business case" for cybersecurity.

The DHS has formed a cybersecurity working group that includes representatives from the private sector. In addition, the agency meets regularly with security and business execs through roundtables conducted with the U.S. Chamber of Commerce and the National Cyber Security Alliance, with a goal of raising awareness about threats.

"We help CISOs make the case that cybersecurity is a critical part of the integrated risk management process," Menna says. "It needs to be understood by business people in the C-suites and the board. That's what DHS brings to the table."

Go to the main story:
Why Cybersecurity Partnerships Matter

InformationWeek: March 28, 2011 Issue

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