Tag Archives: Anti-Fraud

selling security products with fear, ignorance and online marketing

Why security defenses are a mistake

Security defenses don’t improve our understanding of the root causes of data breaches

Why is this so? Because when you defend against a data breach – you do not necessarily understand the vulnerabilities that can be exploited.

If do not understand the root causes of your vulnerabilities, how can you justify and measure the effectiveness of your defensive measures?

Let me provide you with an example.

Conventional IT security practice says that you must install a firewall in front of a server farm.

Firewalls prevent the bad guys from getting in. They don’t prevent sensitive data assets from leaving your network during a data breach.

If you have a dozen servers, running Ubuntu 12.04 with the latest patches, hardened and only serving responses to requests on SSH and HTTPS services not only is there no added value in a firewall but installing and maintaining a firewall will be a waste of money that doesn’t defend against a data breach.

First of all – defenses are by definition, not a means of improving our understanding of strategic threats. Think about the Maginot Line in WWI or the Bar-Lev line in 1973. Network and application security products that are used to defend the organization are rather poor at helping us understand and reduce the operational risk of insecure software.

Second of all – it’s hard to keep up. Security defense products have much longer product development life cycles then the people who develop day zero exploits. The battle is also extremely asymmetric – as it costs millions to develop a good application firewall that can mitigate an attack that was developed at the cost of three man months and a few Ubuntu workstations. Security signatures (even if updated frequently) used by products such as firewalls, IPS and black-box application security are no match for fast moving, application-specific source code vulnerabilities exploited by attackers and contractors.

Remember – that’s your source code, not Microsoft.

Third – threats are evolving rapidly. Current defense in depth strategy is to deploy multiple tools at the network perimeter such as firewalls, intrusion prevention and malicious content filtering. Although content inspection technologies such as DPI and DLP are now available, current focus is primarily on the network, despite the fact that the majority of attacks are on the data – customer data and intellectual property.

The location of the data has also become less specific as the notion of trusted systems inside a hard perimeter has practically disappeared with the proliferation of cloud services, Web 2.0 services, SSL VPN and convergence of almost all application transport to HTTP.

In summary – before handing over a PO to your local information security integrator – I strongly suggest a systematic threat analysis of your systems. After you have prioritized set of countermeasures – you’ll be buying, but not necessarily what he’s selling.

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Five things a healthcare CIO can do to improve security

A metaphor I like to use with clients compares security vulnerabilities with seismic fault lines. As long as the earth doesn’t move – you’re safe, but once things start moving sideways – you can drop into a big hole. Most security vulnerabilities reside in the cracks of systems and organizational integration and during an M&A, those cracks fault lines can turn your local security potholes into the Grand Canyon.

Here are 5 practical things I would recommend to any healthcare organization CIO:

1. Do not rely on fixed controls

Any information security professional will tell you that security countermeasures are comprised of people, processes and technology.  The only problem is that good security depends on stable people, processes and technology. A stable organization undergoing rapid and violent change is an oxymoron.  Visualize your company has ISO 27001 certification but the stock drops by 90% because of an options back-dating scandal at the top, the company fires 900 employees and all of a sudden, the fixed controls are not as effective as you thought they were.  Think about the Maginot Line in WWII.

2. Use common sense when it comes to people

People countermeasures should be a mix of common-sense, background checks (at a depth proportional to job exposure to sensitive assets), and deterrence.  Andy Grove once said

“Despite modern management theory regarding openness – a little fear in the workplace is not a bad thing”.

When a lot of employees are RIF‘d – there is a lot of anger and people who don’t identify with their employer; the security awareness training vaporizes and fear and revenge take over. Some of the security people will be the first to go, replaced by contractors who may not care one way or the other or worse – be tempted by opportunities offered by the chaos. In  a large complex healthcare organization, large scale security awareness training is probably a hopeless waste of resources considering the increasing number of options that people have (Facebook, smartphones..) to do stuff that causes damage to the business.Security awareness will lose every time it comes up against an iPad or Facebook.

Why is  common sense a good alternative to awareness training?

Common sense  is easy to understand and enforce if you keep it down to 4 or 5 rules:  maintain strong passwords, don’t visit porn sites, don’t blog about the business, don’t insert a disk on key from anyone and maintain your notebook computer like you guard your cash.

3. Spend some money on securing your software applications instead of on security theater

It’s a given that business processes need to be implemented in a way that ensures confidentiality, integrity and availability of customer data.  A simplistic example is a process that allows a customer service representative to  read off a full credit card number to a customer. That’s a vulnerability that can be exploited by an attacker.  But – that’s a trivial example – while you’re busy managing processes and using security theater code words – the attackers are attacking your software and stealing your data.

4. Question your defenses 

Technology countermeasures are not a panacea – and periodically you have to step back and take a look at your security portfolio both from a cost and effectiveness perspective.  You probably reply on a defense in depth strategy but end up with multiple, sometimes competing and often ineffective tools at different layers – workstation, servers and network perimeter.

Although defense-depth is a sound strategy – here are some of the fault lines that may develop over time:

  • One – most defense in depth  information security is focussed on external threats while in an  organization undergoing rapid change – the problem is internal vulnerabilities.
  • Second – defense-in-depth means increased complexity which can result in more bugs, more configuration faults and … less security instead of more security.
  • Three – when the security and executive staff is cut, security monitoring and surveillance is suffers – since there are less (or no) eyeballs to look at the logs and security incident monitoring systems. With less eyeballs looking at events – you may have a data breach and only know about it 3 months later – are you still sure defense in depth was protecting you?

5. Invest in smart people instead  (instead of investing in business alignment)

Business alignment is one of those soft skill activities that keep people in meetings instead of mitigating healthcare  vulnerabilities – which requires hard professional skills and high levels of professional security competence. It’s a fact of life that problem solvers hate meetings and rightly so – you should invest in smart people and go light on the business alignment since it will never stop the next data breach of your patients’ data.

Claudiu Popa, president and chief security officer of data security vendor Informatica Corp. told  Robert Westervelt in an interview  on searchsecurity.com that:

…once an organization reaches the right level of maturity, security measures will not only save time and money, but also contribute to improved credibility and efficiency.

This is nonsense – security is a cost  and it rarely contributes to efficiency of a business (unless the business can leverage information security as part of it’s marketing messages) and as  for an organization firing 30% of it’s workforce over night – words like maturity, credibility and efficiency go out the door with the employees.

At that point –  highly competent and experienced security professionals who are thinking clearly and calmly are your best security countermeasure.

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Data Classification and Controls Policy for PCI DSS

Do you run an e-commerce site?

Are you sure you do not store any payment card data or PII (personally identifiable information) in some MySQL database?

The first step in protecting credit card and customer data is to know what sensitive data you really store, classify what you have  and set up the appropriate security controls.

Here is a policy for any merchant or payment processor who want to achieve and sustain PCI DSS 2.0 compliance and protect customer data.

I. Introduction

You need to identify and apply controls to the data types identified in this policy. The data types identified below are considered digital assets and are to be controlled and managed as specified in this policy while retained or processed by the organization. You should identify and inventory all systems that store or process this information and will audit these systems on a semi-annual bases for effectiveness of controls to manage the data types.

II. Background

The Payment Card Industry (PCI) Security Standard is a requirement for all financial institutions and merchants that use or process credit card information. This security standard is designed to help protect the integrity of the credit card systems and to help mitigate the risk of fraud and identity theft to the individuals who use credit cards to make purchases for goods and services.

The PCI Security Standard was originally introduced by by VISA as the Cardholder Information Security Program (CISP) and specified the security controls for each level or merchant and credit card processor. In 2004 the major brands in the card payment industry agreed to adopt the CISP standard and requirements and a single industry standard in order to reduce the costs of implementation and assessment and increase the rate of adoption. Most organizations were required to meet all requirements of the PCI security standard by June 30th 2005 and it is now an ongoing compliance process with merchants, payment processors and issuers.

III. General Policy Statement

All Credit Card Information and associated data is company confidential and will not be transmitted over public networks in the clear. Credit Card information can only be transmitted encrypted and only for authorized business purposes to authorized parties that have been approved to receive credit card information.

Continue reading

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Ten steps to protecting your organization’s data

Here are 10 steps  to protecting your organization’s privacy data and intellectual property.

As a preface, begin with the understanding that you already have all the resources you need.

Discussions with colleagues in a large forensics accounting firm that specialize in anti-fraud investigations, money laundering and anti-terror funding (ATF), confirm what I’ve suspected for a long time. Armies of junior analysts working for the large accounting firms who have never seen or experienced a fraudulent event and are unfamiliar with the your business operation are not a reasonable replacement for careful risk analysis by the business done by people who are familiar with the business.

Step # 1- Do not do an expensive business process mapping project.

Many consultants tell organizations that they must perform a detailed business process analysis and build data flow diagrams of data and users who process data. This is an expensive task to execute and extremely difficult to maintain that can require large quantity of billable hours. That’s why they tell you to map data flows. The added value of knowing data flows inside your organization between people doing their job is arguable. There are much better ways to protect your data without writing out a 7 digit check. Here is the first one you should try out. Select the 10 most valuable data assets that your company owns. For example – proprietary mechanical designs of machines, detailed financials of a private company being acquired, and details of competitive contracts with large accounts. In a few interviews with finance, operations, IT, sales and engineering, you can nail down those key assets. After you’ve done that, schedule a 1 hour meeting with the CFO and ask her how much each asset is worth in dollars. In general, the value of a digital, reputational, physical or operational asset to a business can be established fairly quickly by the CFO in dollar terms – in terms of replacement cost, impact on sales and operational costs.

Step #2 – Do not develop a regulatory compliance grid.

There is no point in taking a non-value-added process and spend money making it more effective.

My maternal grandmother, who spoke fluent Yiddish would yell at us – ” grosse augen” when we would pile too much food on our plates. ” Grosse augen” ( or as my folks put it); is having eyes that are bigger than your capacity. Yes, US publicly traded companies are subject to multiple regulations – if the company sells to customers and stores and processes PII (personally identifiable data) they will have to deal with PCI DSS 1.1, California State Privacy Law, Sarbanes-Oxley PCI DSS 1.1 protects one asset – payment card numer and magnetic stripe, while Sarbanes-Oxley is about accounting records. Yes, there are a few commercial software products that map business processes, databases and data elements to multiple regulations; their goal is to help streamline the work involved in multiple regulatory compliance projects – eliminating redundancy where possibility using commonality.
Looking at all the corporate governance and compliance violations; cases such as Hannaford supermarkets and AOL – it’s clear government regulation has not made America more competitive nor better managed.

Step #3 – Identify the top 5 data assets in your business and valuate them

I saw an article recently that linked regulatory compliance mandate and asset cost. Definitely not true – the value of an asset for a company is whatever operational management/CFO say it is. Asset value has nothing to do with compliance but it has everything to do with a cost effective risk control plan. For example – a company might think that whole disk encryption on all company notebook computers is a good idea – but if only 20 people have sensitive data – why spend 1 million dollars on mobile device data encryption when you can solve the problem for less than 5k?

Step #4 – Do not store PII

The absolutely worst thing you can do is a project to analyse data retention and protection regulations that govern each of the sensitive data elements that need protecting, and working with legal and compliance consultants who know the relevant regulations. VISA has it right. Don’t store credit cards and magnetic strip data. It will not help the marketing guys sell more anyway – and you can give the money you save on some fancy database encryption software to the earthquake victims in Myanmar and China.

Step #5 – Monitor your outsourcing vendors

Despite the hype on trusted insiders, most data loss is from business partners. You can write a non-disclosure agreement with an outsourcing vendor and trust them, but you must verify their compliance and prevent unauthorized data leaks.

The best story I had in years was in a meeting with the VP internal audit at a medium sized bank in Israel. He took a sales call with me and I pitched our extrusion prevention technology from Fidelis Security Systems as a way to protect their customer data. He said – look Danny, we don’t need technology – we’ve outsourced everything to a very large bank and their data center security is world-class. Two weeks later, the big bank had a serious data breach event (a high school student hacked into the internal network of the bank from a public Windows-based kiosk and helped himself to some customer lists. Two months later, the small bank was reported to be looking to get out of their outsourcing contract. Don’t rely on contracts alone – use people and DLP technology to detect data leakage.

Step #6 – Do annual security awareness training but keep it short and sweet

Awareness is great but like Andy Grove said – “A little fear in the workplace is not necassarily a bad thing”. Have everyone read, understand and sign a 1 page procedure for information security. Forget interview projects and expensive self-assessment systems – what salesman in his right mind will take time to fill out one of those forms – if he doesn’t update his accounts on salesforce.com? Install an extrusion detection system at the network perimeter. Prosecute violators in real time. Do random spot checks on the read-and-understand procedure. Give demerits to the supervisors and managers if their employees don’t pass the spot check.

Step #7 – Calculate valuate at risk of your top 5 data assets

ISO 27001 and PCI DSS 1.1 checklists are great starting points but they focus on whether a particular technology, policy or control has been implemented, and not whether these controls are cost-effective security countermeasures against internal and external attackers. Use Practical Threat Analysis with a PTA risk library for ISO 27001 or PCI DSS 1.1 and you will be able to build a cost-effective risk mitigation plan based on asset values, threat probabilities and estimated damage levels.

Step #8 – Ask your vendors and colleagues difficult questions

After you’ve done a practical threat analysis of your risk exposure to attacks on sensitive customer data and IP you will be in better position than ever to know what policies, procedures and technologies are the most effective security controlss. You’ll be in an excellent position to ask difficult questions and negotiate terms with your favorite vendor. While the attitude of many companies is to hold data protection protections close to their chests, it is valuable to talk to your colleagues at other companies in the same market and get a sense of what they have done and how well the controls perform.

Step #9 – Resist the temptation to do a customer data integration (CDI) project.

Customer data is often stored in many applications and locations in a large organization. The knee-jerk reaction of IT is to do a big data integration project and get all the digital assets under one roof. There are three reasons why this is a terrible idea. (a) Most of these projects fail, overrun and never deliver promised value (b) If you do suceed in getting all the data in one place, it’s like waving a huge red flag to attackers – heah , come over here – we have a lot of sensitive data that is nicely documented and easily accessible. Companies with enterprise software systems such as SAP and Oracle Applications are three times more likely to be attacked. (c) Ask yourself – would Google have succeeded if with global data integration strategy?

Step #10 – Prepare a business care for data loss prevention before evaluating products

Despite claims that protecting data assets is strategic to an enterprise, and IT governance talk about busines alignment and adding value – my experience is that most organizations will not do anything until they’ve had a fraud or data security event. The first step to protecting customer data and IP in any sized business from a individual proprietership to a 10,000 person global enterprise is laying the case at the door of the company’s management. This is where executives need to take a leadership position – starting with a clear position on which data assets are important and how much they’re worth to the company.

Practical threat analysis is a great way to identify and assess threats to your business and evaluate the potential business impact in dollars and cents to your operation using best-practice risk models provided by the PTA Professional threat modeling tool.

In summary

Software Associates specializes in helping medical device and healthcare software vendors achieve HIPAA compliance and protect customer assets and provides a full range of risk management services, from stopping fraud to ensuring regulatory compliance and enhancing your ability to serve your customers.

There are resources that help you turn information into insight such as   Risk Management from LexisNexis, Identity Fraud TrueID solutions from LexisNexis that help significantly reduce fraud losses and Background Checks from LexisNexis that deliver valuable insights that lead to smarter, more informed decisions and greater security for consumers, businesses and government agencies.For consumers, its an easy way to verify personal data, screen potential renters, nannies, doctors and other professionals, and discover any negative background information that could impact your employment eligibility. For businesses and government agencies, it is the foundation of due diligence. It provides the insight you need to reduce risk and improve profitability by helping you safeguard transactions, identify trustworthy customers and partners, hire qualified employees, or locate individuals for debt collections, law enforcement or other needs.

 

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Why less log data is better

Been a couple weeks since I blogged – have my head down on a few medical device projects and a big PCI DSS audit where I’m helping the client improve his IT infrastructure and balance the demands of the PCI auditors.

Last year I gave a talk on quantitative methods for estimating operational risk of information systems in the annual European GRC meeting in Lisbon – you can see the presentation below.

As a I noted in my talk, one of the crucial phases in estimating operational risk is data collection: understanding what threats, vulnerabilities you have and understanding not only what assets you have (digital, human, physical, reputational) but also how much they’re worth in dollars.

Many technology people interpret data collection as some automatic process that reads/scans/sniffs/profiles/processes/analyzes/compresses log files, learning and analyzing the data using automated  algorithms like ANN (adaptive neural networks).

The automated log profiling tool will then automagically tell you where you have vulnerabilities and using “an industry best practice database of security countermeasures”,  build you a risk mediation plan. Just throw in a dash of pie charts and you’re good to go with the CFO.

This was in fashion about 10 years ago (Google automated audit log analysis and you’ll see what I mean) for example this reference on automated audit trail analysis,  Automated tools are good for getting a quick indication of trends, and  tend to suffer from poor precision and recall that  improve rapidly when combined with human eyeballs.

The PCI DSS council in Europe (private communication) says that over 80% of the merchants/payment processors with data breaches  discovered their data breach  3 months or more after the event. Yikes.

So why does maintaining 3 years of log files make sense – quoted from PCI DSS 2.0

10.7 Retain audit trail history for at least
one year, with a minimum of three
months immediately available for
analysis (for example, online, archived,
or restorable from back-up).
10.7.a Obtain and examine security policies and procedures and
verify that they include audit log retention policies and require
audit log retention for at least one year.
10.7.b Verify that audit logs are available for at least one year and
processes are in place to immediately restore at least the last
three months’ logs for analysis

Wouldn’t it be a lot smarter to say –

10.1 Maintain a 4 week revolving log with real-time exception reports as measured by no more than 5 exceptional events/day.

10.2 Estimate the financial damage of the 5 exceptional events in a weekly 1/2 meeting between the IT manager, finance manager and security officer.

10.3 Mitigate the most severe threat as measured by implementing 1 new security countermeasure/month (including the DLP and SIEM systems you bought last year but haven’t implemented yet)


I’m a great fan of technology, but the human eye and brain does it best.

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A cyber-terror derivatives market?

I first heard the idea about hedging risk against actual future disasters (man-made or natural) around the time of Hurricane Katrina.

The essay below by professor Avinash Persaud considers the creation of a terrorism futures market. The ideas are particularly timely in the context of the unrest in Libya and the uptick in oil prices.

Right now, the closest thing we have to “terrorist futures” are crude oil futures. One way of looking at them is as a loose proxy for the sell-by date on the Saudi monarchy. For example, oil prices above $99 would be a function of geopolitical instability, and not just the supply-demand dynamic.

Futures prices convey information in its raw form. They tell you what individual participants are betting on and how they’re evaluating risk.  They tell us something about Quaddaffi. Even if Libya is not a major oil producer, Muamer Quaddaffi is a major source of instability.

Can a Country Take out Financial Insurance Against Macro-Risks Like Currency Instability or Global Terrorism?
by Professor Avinash Persaud

Good evening, ladies and gentlemen. I would like to begin today by discussing the link between the personal insurance you and I take out every day and financial futures markets. I will then turn to a proposal to establish a terrorism futures market and how that would work. I will address the moral objections to such a market and its possible benefits to our democracy. It should be a thought-provoking tour.

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10 guidelines for a security audit

What exactly is the role of an information security auditor?  In some cases, such as compliance  by Level 1 and 2 merchants with PCI DSS 2.0,  external audit is a condition to PCI DSS 2.0 compliance.   In the case of ISO 27001, the audit process is a key to achieving ISO 27001 certification (unlike PCI and HIPAA, ISO regards certification, not compliance as the goal).

There is a gap between what the public expects from an auditor and how auditors understand their role.

Auditors look at transactions and controls. They’re not the business owner and the more billable hours, the better.

The “reasonable person” assumes that the role of the security auditor is to uncover vulnerabilities, point out ways to improve security and produce a report that will enable the client to comply with relevant compliance regulation. The “reasonable person” might add an additional requirement of a “get out of jail free card”, namely that the auditor should produce a report that will stand up to legal scrutiny in times of a data security breach.

Auditors don’t give out “get out of jail” cards and audit is not generally part of the business risk management.

The “reasonable person” is a legal fiction of the common law representing an objective standard against which any individual’s conduct can be measured. As noted in the wikipedia article on the reasonable person:

This standard performs a crucial role in determining negligence in both criminal law—that is, criminal negligence—and tort law. The standard also has a presence in contract law, though its use there is substantially different.

Enron, and the resulting Sarbanes-Oxley legislation resulted in significant changes in accounting firms’ behavior,but judging from the 2009 financial crisis from Morgan Stanley to AIG, the regulation has done little to improve our confidence in our auditors. The numbers of data security breaches are an indication that the situation is similar in corporate information security.  We can all have “get out of jail” cards but data security audits do not seem to be mitigating new risk from tablet devices and mobile apps. Neither am I aware of a PCI DSS certified auditor being detained or sued for negligence in data breaches at PCI DSS compliant organizations such as Health Net where 9 data servers that contained sensitive health information went missing from Health Net’s data center in Rancho Cordova, California. The servers contained the personal information of 1.9 million current and former policyholders, compromising their names, addresses, health information, Social Security numbers and financial information.

The security auditor expectation gap has sometimes been depicted by auditor organizations as an issue to be addressed  by educating users to the audit process. This is a response not unlike the notion that security awareness programs are effective data security countermeasures for employees that willfully steal data or bring their personal device to work.

Convenience and greed tend to trump awareness and education in corporate workplaces.

Here are 10 guidelines that I would suggest for client and auditor alike when planning and executing a data security audit engagement:

1. Use an engagement letter every time. Although the SAS 83 regulation makes it clear that an engagement letter must be used, the practical reason is that an engagement letter sets the mutual expectations, reduces risk of litigation and by putting mutual requirements on the table – improves client-auditor relationship.

2.Plan. Plan carefully who needs to be involved, what data needs to be collected and require input from C-level executives to  group leaders and the people who provide customer service and manufacture the product.

3. Make sure the auditor understands the client and the business.  Aside from wasted time, most of the famous frauds happened where the auditors didn’t really understand the business.   Understanding the business will lead to better quality audit engagements and enable the auditor and audit manager to be peers in the boardroom not peons in the hallway.

4. Speak to your predecessor.   Make sure the auditor talks to the people who came before him.  Speak with the people in your organization who did the last data security audit.   Even if they’ve left the company – it is important to understand what they did and what they thought could have been improved.

5. Don’t tread water. It’s not uncommon to spend a lot of time collecting data, auditing procedures and logs and then run out of time and billable hours, missing the big picture which is” how badly the client organization could be damaged if they had a major data security breach”. Looking at the big picture often leads to audit directions that can prevent disasters and  subsequent litigation.

6. Don’t repeat what you did last year.  Renewing a 2,000 hour audit engagement that regurgitates last years security check list will not reduce your threat surface.  The objective is not to work hard, the object is to reduce your value at risk, comply and …. get your “get out of jail card”.

7. Train the client to fish for himself.   This is win-win for the auditor and client. Beyond reducing the amount of work onsite, training client staff to be more self sufficient in the data collection and risk analysis process enables the auditor to better assess client security and risk staff (one of the requirements of a security audit) and improves the quality of data collected since client employees are the closer to actual vulnerabilities and non-compliance areas than any auditor.

As I learned with security audits at telecom service providers and credit card issuers, the customer service teams know where the bodies are buried, not a wet-behind-the-ears auditor from KPMG.

8. Follow up on incomplete or unsatisfactory information.  After a data security breach, there will be litigation.  During litigation, you can always find expert testimony that agrees with your interpretation of information but

The problem is not interpreting the data but acting on unusual or  missing data.  If your ears start twitching, don’t ignore your instincts. Start unraveling the evidence.

9. Document the work you do.  Plan the audit and document the process.  If there is a peer review, you will have the documentation showing the procedures that were done.  Documentation will help you improve the next audit.

10. Spend some time evaluating your client/auditor.   At the end of the engagement, take a few minutes and interview your auditor/client and ask performance review kinds of questions like: What do think your strengths are, what are your weaknesses?  what was succesful in this audit?  what do you consider a failure?   How would you grade yourself on a scale of 10?

Perhaps the biggest mistake we all make is not carefully evaluating the potential we have to meet our goals as audit, risk and security professionals.

A post-audit performance review will help us do it better next time.

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3GPP Long Term Evolution – new threats or not?

3GPP Long Term Evolution (LTE), is the latest standard in the mobile network technology tree that produced the GSM/EDGE and UMTS/HSPA network technologies. It is a project of the 3rd Generation Partnership Project (3GPP), operating under a name trademarked by one of the associations within the partnership, the European Telecommunications Standards Institute.

The question is, what will be the data security  impact of LTE deployments? As LTE is IP based and IPv6 becomes more common in the marketplace, will the security requirements of mobile devices become similar to traditional networked devices?  There is already a huge trend  for BYOD or Bring Your Own Device to work, which certainly causes a lot of headaches for information security staffs. Will more bandwidth and flat IP networks of LTE increase the threat surface for corporate IT?

Other than higher performance, LTE features a flat IP network, but I don’t see how that increases the threat surface in any particular way.  The security requirements for mobile networked devices are similar to traditional wired devices but the vulnerabilities are different, namely the potential of unmanaged BYOD tablet/smartphone to be an attack vector back into the enterprise network and to be a channel for data leakage.  The introduction of Facebook smart phones is far more interesting as a new vulnerability to corporate networks than smart phones with a 100MB download and 20MB upload afforded by LTE.

I am not optimistic about the capability of a company to manage employee owned mobile devices centrally and trying to rein in smartphones and tablets with awareness programs.  Instead of trying to do the impossible or the dubious, I submit that enterprise that are serious about mobile data security must take 3 basic steps after accepting that BYOD is a fact of life and security awareness has limited utility as a security countermeasure.

  1. Reorganize physical, phones and information security into a single group with one manager.  This group must handle all data, software IT, physical (facilities) and communications issues with a single threat model driven by the business and updated quarterly. There is no point in pretending that the only phones used by employees are phones installed and operated by the companies telecom and facilities group. That functionality went out the door 10 years ago.
  2. Develop a threat model for the business – this is  key to being able to keep up with rapidly growing threats posed by BYOD.  Update that model quarterly, not yearly.
  3. CEO must take an uncompromising stance on data leaks and ethical employee behavior. It should be part of the company’s objectives, measurable in monetary terms just like increasing sales by 10% etc.

 

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Small business data security

Here are 7 steps to protecting your small business’s data and and intellectual property in 2011 in the era of the Obama Presidency and rising government regulation.

Some of these steps are about not drinking consultant coolade (like Step # 1- Do not be tempted into an expensive business process mapping project) and others are adopting best practices that work for big business (like Step #5 – Monitor your business partners)

Most of all, the 7 steps are about thinking through the threats and potential damage.

Step # 1- Do not be tempted into an expensive business process mapping exercise
Many consultants tell businesses that they must perform a detailed business process analysis and build data flow diagrams of data and business processes. This is an expensive task to execute and extremely difficult to maintain that can require large quantity of billable hours. That’s why they tell you to map data flows. The added value of knowing data flows between your business, your suppliers and customers is arguable. Just skip it.

Step #2 – Do not punch a compliance check list
There is no point in taking a non-value-added process and spending money on it just because the government tells you to. My maternal grandmother, who spoke fluent Yiddish would yell at us: ” grosse augen” (literally big eyes) when we would pile too much food on our plates. Yes, US publicly traded companies are subject to multiple regulations. Yes, retailers that  store and processes PII (personally identifiable data)  have to deal with PCI DSS 2.0, California State Privacy Law etc. But looking at all the corporate governance and compliance violations, it’s clear that government regulation has not made America more competitive nor better managed.  It’s more important for you to think about how much your business assets are worth and how you might get attacked than to punch a compliance check list.

Step #3 – Protecting your intellectual property doesn’t have to be expensive
If you have intellectual property, for example, proprietary mechanical designs in Autocad of machines that you build and maintain, schedule a 1 hour meeting with your accountant  and discuss how much the designs are worth to the business in dollars. In general, the value of any digital, reputational, physical or operational asset to your business can be established fairly quickly  in dollar terms by you and your accountant – in terms of replacement cost, impact on sales and operational costs.  If you store any of those designs on computers, you can get free open-source disk encryption software for Windows 7/Vista/XP, Mac OS X, and Linux. That way if there is a break-in and the computer is stolen, or if you lose your notebook on an airport conveyor belt, the data will be worthless to the thief.

Step #4 – Do not store Personally identifiable information or credit cards
I know it’s convenient to have the names, phone numbers and credit card numbers of customers but the absolutely worst thing you can do is to store that data. VISA has it right. Don’t store credit cards and magnetic strip data. It will not help you sell more anyway, you can use Paypal online or simply ask for the credit card at the cash register.  Get on Facebook and tell your customers how secure you are because you don’t store their personal data.

Step #5 – Don’t be afraid of your own employees, but do monitor your business partners
Despite the hype on trusted insiders, most data loss is from business partners. Write a non-disclosure agreement with your business partners and trust them, and audit their compliance at least once a year with a face-to-face interview.

Step #6 – Do annual security awareness training but keep it short and sweet
Awareness is great but like Andy Grove said – “A little fear in the workplace is not necassarily a bad thing”. Have your employees and contractors read, understand and sign a 1 page procedure for information security.

Step #7 – Don’t automatically buy whatever your IT consultant is selling
By now – you are getting into a security mindset.  Thinking about asset value, attacks and cost-effective security countermeasures like encryption. Download the free risk assessment software and get a feel for your value at risk.  After you’ve done some practical threat analysis of your business risk exposure you will be in an excellent position to talk with your IT consultant. While most companies don’t like to talk about data theft issues, we have found it invaluable to talk to colleagues in your market and get a sense of what they have done and how well the controls perform.

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When defense in depth fails – two deadly sins

Defense in depth is a security mantra,  usually for very good military security and information security reasons.  However – defense in depth may be a very bad idea,  if your fundamental assumptions are wrong or you get blinded by security technology.

The sin of wrong assumptions

In the defense space – we can learn from military history that incorrect security assumptions  carry a high price tag.

The 1973 Yom Kippur war that resulted in a stunning Israel victory but cost 2,800 Israeli lives, and the recent American war in Iraq, that yielded little benefit for the cost of over 30,000 American lives are both illustrations of conceptual mistakes in security strategy.

Neither defense in depth (the Bar Lev line) nor military campaigns for democracy (the Iraq war) were a match for arguable security assumptions  (the  Arabs are deterred by Israeli military superiority (they weren’t), Americans can combat terror with conventional armies (no you cannot).

The sin of techno lust

In the business space  it’s easy to get seduced by sexy security technologies but implementing too many  security technologies will increase operational risk of information security instead of achieving defense in depth.

Why is this so?

Reason 1 : More security elements tends to increase risk instead of improving defenses
Adding more network security elements tends to increase the total system risk, as a result of the interaction between the elements and increased system complexity and resulting  inability to  maintain the systems properly.

For example – companies that attempt to prevent data loss  with more user access lists, enterprise DRM ,  firewalls and proxies experience an inflation of ACLs, end point application software (that needs to be deployed and maintained), firewall rules  that may be outmoded and clients that bypass the proxies.

A company may feel more secure while in practice they are less secure – with dormant accounts, shared passwords, excessive access rights,  orphan accounts, redundant accounts, dormant users, underutilized accounts, abuse of administrator access, backdoor access and … paying more for the privilege.

Reason 2 – Product features do not mitigate threats
Many companies tend to spend a disproportionate amount of their  time evaluating product features instead of performing a business threat analysis and selecting a short list of products that might mitigate the threats.  I first realized this when I paid a sales call on the CSO of a large bank in Israel and his secretary told me that the CSO meets 3-5 vendors/day. It’s nice to be wanted, but 5 years later – the bank still does not have a coherent data security policy, encryption policy nor data loss prevention capability.

Focus on features and vendor profiles  results in installing a product without understanding the return on security investment. After selecting a security product based on marketing and FUD tactics and then implementing the product without understanding how well it reduces value at risk – the customer (not the vendor) pays for ownership of an inappropriate solution in addition to paying for the damage caused by attackers who exploit the unmitigated vulnerabilities.

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