How Investment Firms Can Use Microsegmentation to Build Security Resilience

Institutional investment firms face increasing threats from cyberattacks that target sensitive financial data and trading systems. With the size of losses from cyber incidents among firms reaching $2.5 billion since 2017 according to a report by IMF, the need to protect client information and maintain trust has never been more pressing. With the shift towards cloud-based infrastructures, secure cloud adoption becomes essential, and microsegmentation offers a robust solution.

Microsegmentation helps firms comply with stringent regulatory requirements by ensuring that data access is tightly controlled and monitored. Ultimately, this approach not only safeguards assets but also simplifies the management of network access, positioning firms to navigate the complexities of their security landscape more effectively.

Here, we’ll explore why microsegmentation is so important and how firms can implement microsegmentation as part of their security operations.

What is Microsegmentation?

Microsegmentation is an advanced network security strategy that involves dividing a network into smaller, distinct segments. This approach allows for the creation of granular, identity-based access controls, which are crucial in protecting sensitive financial data, trading systems, and client information.

According to an article by T-Systems, “The concept is often compared to a submarine design, where the segments or compartments are built so that if there’s a breakage or puncture in one of the compartments, the flooding is contained to that section only. The other areas remain watertight.”

By implementing microsegmentation, investment firms can effectively limit the lateral movement of threats within their networks, thereby enhancing overall security measures. Furthermore, microsegmentation facilitates secure cloud adoption, which is vital as more firms transition to cloud-based infrastructures.

This method not only strengthens a firm’s security posture but also streamlines operations by reducing the complexity of managing network access. As a result, institutional investment firms find themselves better equipped to safeguard their assets and maintain trust with clients in an increasingly digital world.

What Are the Benefits of Microsegmentation?

Microsegmentation offers numerous benefits for institutional investment firms, enhancing their cybersecurity posture and operational efficiency. By dividing networks into smaller, isolated segments, microsegmentation significantly reduces the attack surface and limits the potential impact of security breaches.

Here are three key benefits of this cybersecurity strategy:

Improved Data Protection

Microsegmentation can significantly enhance data protection at investment firms in several ways:

• Reduced attack surface: By dividing the network into smaller segments, microsegmentation limits the potential entry points for attackers and contains breaches to isolated segments.
• Granular access control: Microsegmentation allows firms to enforce tailored security policies at a very fine-grained level, aligning with specific application requirements and data sensitivities.
• Protection of critical assets: Firms can separate and isolate critical applications like money transfers, payments, and customer data from the general IT infrastructure.
• Identity-based security: Rather than relying on IP addresses, microsegmentation can use cryptographic fingerprinting of workloads for more robust protection.

By implementing these capabilities, investment firms can significantly strengthen their data protection posture and better safeguard sensitive financial information and critical systems from cyber threats.

Enhanced Threat Detection

Microsegmentation significantly enhances threat detection and response capabilities at investment firms, providing a more robust defense against cyber incidents. Here’s how microsegmentation contributes to improved threat detection and response:

• Improved visibility: It provides enhanced visibility into network traffic flows, allowing security teams to quickly detect anomalies and suspicious activities.
• Real-time activity benchmarking: Microsegmentation enables real-time monitoring of network activity, ensuring that deviations from normal behavior are swiftly flagged and addressed.
• Enhanced anomaly detection: The granular control provided by microsegmentation allows for more precise identification of unusual patterns or behaviors within specific network segments.
• Automated threat detection: Some microsegmentation solutions incorporate AI and machine learning capabilities to automate the detection of potential threats and policy violations.
• Faster incident response: By isolating affected segments, microsegmentation enables security teams to quickly identify, contain, and remediate security incidents without impacting the entire network.
• Enhanced breach containment: If a breach occurs, microsegmentation prevents lateral movement across the network, confining the impact to the compromised segment.
• Continuous risk assessment: Some microsegmentation solutions provide ongoing measurement of the visible network attack surface, helping quantify and mitigate risk exposure.

Firms must operate under the assumption that cyberattacks and data breaches will happen. Microsegmentation enables them to reduce the potential damage of such incidents while also mitigating the risk of them happening in the first place.

Secure Cloud Adoption

Microsegmentation plays a crucial role in helping investment firms adopt and secure cloud solutions. Here’s how microsegmentation specifically benefits investment firms in their cloud journey:

• Cloud-agnostic security: Microsegmentation allows investment firms to implement consistent security policies across multiple cloud providers and hybrid environments, ensuring uniform protection regardless of where data and applications reside.
• Secure cloud migration: It facilitates safer cloud adoption by enabling secure direct connectivity for cloud workloads and ensuring protected communications across multi-cloud infrastructures.
• Compliance in the cloud: Microsegmentation helps investment firms maintain regulatory compliance (e.g., PCI DSS, GDPR) by isolating and securing sensitive financial data in cloud environments.
• Dynamic policy adaptation: As investment firms scale their cloud operations, microsegmentation policies can automatically adjust to network configuration changes and evolving threats, maintaining security without manual intervention.
• Workload-centric security: By focusing on workload identity rather than network location, microsegmentation secures financial applications and data consistently across on-premises, cloud, and hybrid environments.
• Simplified multi-cloud management: By decoupling security from cloud infrastructure, microsegmentation prevents vendor lock-in and reduces complexity in managing security across different cloud providers.
• Secure inter-cloud communications: It allows investment firms to securely connect workloads across different cloud platforms, regions, and virtual private clouds without compromising security.

Cloud solutions are an integral part of digital transformation efforts and investment firms. By leveraging microsegmentation, firms can confidently adopt cloud solutions while maintaining the high level of security and compliance required in the financial sector.

Implementing Microsegmentation

Implementing microsegmentation in an investment firm requires a systematic approach to ensure effective deployment and minimal disruption to operations. According to an eSecurity Planet article by award-winning writer and data security researcher Sam Ingalls, “For microsegmentation, it is as much about the process as it is the technology. Fail to follow the steps meticulously, and you’ll only prolong the project and cause unnecessary headaches.”

Here are the critical steps you’ll need to take to implement microsegmentation:

1. Assess and Map the Network: Begin by conducting a thorough inventory of all assets, applications, and data flows within your network. This includes identifying critical systems, understanding dependencies, and mapping communication patterns. Use network visualization tools to create a comprehensive map of your environment.
2. Define Security Policies: Based on the network assessment, develop granular security policies that align with your firm’s risk tolerance and compliance requirements. These policies should define which applications and workloads can communicate with each other and under what circumstances.
3. Segment the Network: Start by creating broad segments based on function (e.g., trading systems, client data, back-office operations). Then, progressively refine these segments down to the individual workload or application level.
4. Implement Microsegmentation Technology: Choose and deploy a microsegmentation solution that fits your infrastructure. This may involve software-defined networking (SDN) tools, host-based firewalls, or cloud-native security groups.
5. Test in a Controlled Environment: Before full deployment, test your microsegmentation policies in a sandbox or staging environment. This allows you to identify and resolve any issues without impacting production systems.
6. Gradually Roll Out: Implement microsegmentation in phases, starting with less critical segments and gradually expanding to more sensitive areas. This approach minimizes disruption and allows for fine-tuning of policies.
7. Monitor and Adjust: Continuously monitor network traffic and policy effectiveness. Use analytics tools to identify anomalies and adjust segmentation rules as needed.
8. Train Staff: Educate IT and security teams on the new microsegmentation framework, including how to manage policies, troubleshoot issues, and respond to alerts.
9. Integrate with Existing Security Controls: Ensure that microsegmentation works in harmony with other security measures such as intrusion detection systems, data loss prevention tools, and identity and access management solutions.
10. Regularly Review and Update: As your firm’s infrastructure evolves, regularly review and update your microsegmentation strategy. This includes reassessing segments, updating policies, and incorporating new technologies or business requirements.

Maintaining Best Practices

Ingalls also suggests that security leaders follow a specific set of best practices to ensure the process is effective. Three of those best practices include tagging workloads, adopting a comprehensive policy, and enforcing adaptive policies so that your system can “dynamically give tags to previously unidentified workloads.”

Workload tags often include the following:

• Role
• Application
• Classification
• Compliance
• Environment
• Location

According to Ingalls, “Identifying and labeling workload tags inside your network is an incredible value-add when considering automated solutions for tagging existing and new application workloads.”

The comprehensive policy or policies you must adopt “exist within the network at your micro-perimeters,” says Ingalls. “Features of your entire micro-segmented network of policies must include controls like app-id, user-id, file-based restrictions, URL filtering, and threat prevention.”

Finally, your microsegmentation efforts must be adaptive to meet evolving threats. Ingalls suggests implementing automated tag-based systems to handle this task.

“With automated and machine learning technology, those logs exist with granular filtering, and your system can dynamically give tags to previously unidentified workloads,” he said. “An example of this might be requiring MFA for an IP address that is labeled compromised.”

By following these steps and best practices, institutional investment firms can effectively implement microsegmentation, enhancing their security posture and maintaining the agility needed in today’s dynamic financial landscape.

Secure Your Critical Data with Microsegmentation

Microsegmentation is a critical security strategy for institutional investment firms looking to protect their cloud networks and sensitive financial data. By implementing granular access controls and isolating workloads, firms can significantly reduce their attack surface and contain potential breaches.

However, this approach to security is not a one-off process. Policies must be adapted regularly to protect against new threats, and as firms grow and adopt new cloud technologies, they must expand their security posture to secure new apps, networks, and data.

To learn more about how you can protect your firm with microsegmentation, contact us at Option One Technologies today.