New Zealand Reserve Bank: Taking Action to Respond to Data Breach Reports

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pexels dom j 45111Two independent investigations into an unauthorized data breach and the handling of sensitive information have been announced by the Reserve Bank of New Zealand. 
“The Bank accepts the findings and has implemented, and will continue to implement, the recommendations,” stated Reserve Bank Governor Adrian Orr. 
“As signalled in our Statements of Intent, we are well advanced on multiyear investment initiatives related to our digital systems and data management. We have prioritized these initiatives consistent with the recommendations outlined in the reports”. 
On December 25, 2020, the Reserve Bank became the target of a cyber-attack on the third-party application it utilizes to exchange and store information. Following that, KPMG was appointed to conduct an independent investigation into the bank’s rapid response to the security incident and identify areas where the bank’s systems and processes may improve. 
He also stated that, despite being the victim of a massive illegal attack on the file-sharing system, the Reserve Bank accepts complete responsibility for the inadequacies in the KPMG report. 
“We were over-reliant on Accellion – the supplier of the file transfer application (FTA) – to alert us to any vulnerabilities in their system. In this instance, their notifications to us did not leave their system and hence did not reach the Reserve Bank in advance of the breach. We received no advance warning”. 
As per KPMG, the bank’s controls and processes need to be enhanced, which is now being done. If these procedures had been in place at the time of the unlawful breach, the damage would have been lessened. 
Background 
In late 2020, the Bank recruited Deloitte to conduct an independent investigation to assist the Reserve Bank of New Zealand in better managing sensitive data. This was in response to two incidents in which sensitive information was improperly kept in a draft internal report and disclosed to a small group of financial services firms just before it was made public. 
Initiatives to put the report’s recommendations into action are also underway. The Bank estimates that the total cost of the security breach response, including internal resources, will be around $3.5 million.
In January 2021, the Reserve Bank discovered a data breach through Accellion FTA, a third-party file-sharing application that was utilized to share and store information. As part of the inquiry into the event, the Bank recruited KPMG to conduct an independent assessment of its systems and processes.

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