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Brian Pennington

A blog about Cyber Security & Compliance

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brianfpennington

Experienced IT professional currently helping businesses achieve Payment Card Industry Compliance (PCI DSS) and improve their overall IT Security posture.

VMware Infographic – Are you ready to tackle the security risks facing your business

Cyber-screening: Putting security on the M&A agenda

This is a contributed piece by Brian Pennington, regional sales director, EMEA for Coalfire

From financial institutions such as Tesco Bank to tenured technology giants like Yahoo, it seems that no one is impervious to the mounting sophistications of cyber attacks. And in the case of the latter, these attacks pose more of a threat than just the compromising of user data. As a result, businesses need to seriously think about the hidden issues that a cyber-security breach can cause to a merger and acquisition (M&A) deal.

2016 was a big year for cybersecurity. From discussions pertaining to foreign infiltration in the US election to some of the largest scale cyber attacks ever witnessed, questions around the global state of cybersecurity dominated the media. As a result, there are increasing needs, demands and pressures for purchasing companies in M&A deals to calculate and identify cybersecurity weaknesses and breaches in the companies they intend to buy.

With so many moving parts involved in a large scale M&A; it is easy to overlook the cyber security element. With contracts, staffing, and a lot of legal frameworks to be worked through, cyber security can quickly fall down the list of priorities. This though can be a big flaw, as once a data breach is found – even if it took place years before an acquisition was even planned – the purchasing company can be held responsible and consequently suffer the penalties and charges that come from this.

These ticking time bombs can then go off, wiping millions or even billions off the value of an acquisition. For those that have spent time engineering the deal, it can turn a career defining moment into a nightmare. Having completed the deal, the people that should have been held accountable can, in fact, head off into the sunset, without needing to worry about what might happen next.

 

The modern-day M&A                                                                                                                                          

One recent example of how a good deal can turn sour very quickly can be seen in Verizon’s deal to buy Yahoo. Having agreed to buy Yahoo for $4.8 billion, Verizon soon found out that all was not what it may have seemed as two large, successful and separate cyber attacks were announced to the public. With one billion accounts having been compromised in the largest of the attacks, Yahoo now has the unenviable title of suffering the largest cyber-attack ever recorded. Following this news, it was widely reported that Verizon may seek to have $1 billion removed from the sale price for Yahoo.

With large hacks such as these making headline news across the global, PR and marketing teams at Yahoo will be springing into action to save as much of the company’s reputation as possible. Having established itself as a world-renowned, and recognised internet brand, Yahoo is in serious danger of becoming synonymous with cyber hacks and data breaches.

 

The price you pay

Brand reputations are not the only area that can take a blow following a cyber-attack. The financial impact of a data breach can easily spiral into large sums of money, with some estimates placing the average cost to a company at  $221 per stolen record in the US. If this applied to the smallest of Yahoo’s reported attacks the total would still be over $100 billion or close to the market capital of MasterCard! To make matters even worse, a company’s share price often nosedives after a breach, with the likes of TalkTalk taking a hit of 20% off its share price in the months after its widely broadcast cyber-attack. It is quite clear that forgoing cybersecurity checks can cost businesses billions financially and make a once priceless brand name, completely worthless.

So how can businesses empower and protect themselves from a cyber-attack when considering a potential M&A? Well there are three steps that can help protect the investment:

  • Audit potential breaches: Carrying out a risk audit of potential breaches, assessing both the societal and financial factors that might increase the likelihood of becoming a cyber-target will help M&A analysts calculate whether the eventual acquisition is cost effective.
  • Regulatory industry standards: Companies within certain industries are obliged to maintain a secure environment that will mitigate risk of cyber-attacks and protect user data. For instance, Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards designed to ensure that all companies that accept, process, store or transmit credit card information do so in a secure fashion. Ensuring that potential purchases are compliant with these standards is essential in M&A deals.
  • Seek expert help: Cyber security systems are complex and require in-depth knowledge and understanding of how to navigate them safely and effectively; without compromising existing structures. It is therefore highly recommended that M&A analysts enlist the help of cybersecurity consultants to advise them on the suitability of a potential purchase.

 

Cyberpolitics and societal security                                                                                                                   

As cyber criminals and their crimes become ever more complex and dangerous, it is in the best interests of the purchasing company during an M&A to calculate and identify cyber security weaknesses and breaches in the business they intend to buy. Furthermore, brands need to start planning earlier in the M&A process to carry out a full cyber security due diligence investigation and report to assess the dangers of a hack. Carrying out a full cyber risk assessment as part of an M&A not only lessens the financial impact on a deal but also ensures that a business’s reputation remains intact too.

Next time you are planning an M&A it is vital to get the experts in to ensure there are no hidden surprises from large cyber attacks. Working with cybersecurity experts to assist the M&A department could truly be the difference between disaster and prosperity in years to come.

Originally published by IDG Connect here.

Elizabeth Denham’s speech at the Data Protection Practitioners’ Conference 2017

6th march Manchester, UK.

Good morning, and welcome to Manchester. It’s cold and it’s grey, but for those of us who live around here, we kind of like it, and we’re proud it’s where the biggest data protection conference of the year takes place.

We’ve got a busy schedule today. Lots on GDPR, of course. Trevor Hughes from IAPP talking about the role of the data protection officer internationally. Practical workshops on everything from breach notification to consent. And a very engaging information market – the speakers’ corner looks sure to be a conversation starter, and don’t miss our experts talking about the law enforcement directive too.

So lots to engage you. Let’s get started by getting your grey matter warmed up: a quick general knowledge quiz. One question:

What links the following:

  • the Labour Party;
  • international weightlifting;
  • the music you heard when I entered the room; and
  • the ICO?

The answer is right before your eyes: all have performed right here at this venue. I’m not sure which of the four had the rowdiest audience…!

Manchester Central has been the home of the Data Protection Practitioners Conference for the best part of a decade, and I’m sure you’ll agree it’s an excellent venue. It was converted from a railway station built more than 125 years ago by Sir John Fowler, the architect famed for his work on the Forth Railway Bridge.

Sir John once said: “Engineers are not mere technicians and should not approve or lend their name to any project that does not promise to be beneficent to man and the advancement of civilization.”

DPOs in the mainstream

I think there’s something in that comment for us here today. About not merely being technicians. About looking to see how the projects we contribute to can be beneficial to citizens. How we can put the customer first.

I don’t think that’s too grand an aim. This is an exciting time to be in data protection. Like many of you, I’ve worked in this sector a long time. I remember when we were a back office function. When we often were seen as “mere technicians”. That seems a very long time ago.

My colleague Rob Luke, who you’ll hear from shortly, is speaking before an advertising conference later this week. Fifteen years ago, which advertiser would have invited the data protection regulator to their annual event? Who thought data protection when they booked a slot in the ad break during Coronation Street? But today, data protection is central to their work. Making the most of customer data. Combining big data sets. Finding new ways to better understand what consumers want, to track how they act or predict what they will do next.

Last week, we opened an inquiry into privacy risks arising from the use of data analytics for political purposes following public reports about the role of private firms in the Brexit referendum. We often find ourselves at the heart of many debates of modern society.

It’s an exciting time to work in data protection, whatever your sector, with real opportunities. We’ll talk a lot today about the practical aspects, from how GDPR will change things at your organisations, to the steps you can take to use the coming change in the law as an opportunity to inform your practices.

But let’s not lose sight of what good data protection can achieve. We have an opportunity to set out a culture of data confidence in the UK. We just need to keep in mind that when we lend our name to projects, we should think about how they can be of benefit to citizens.

Review of last 12 months

I think it’s fair to say that a recap of the files we’ve been involved in over the past twelve months can be characterised by organisations failing to put customers first.

Our work with WhatsApp and Facebook springs to mind. We all rely on digital services for important parts of our lives. But my office felt these apps were not taking enough responsibility for data protection. Companies have legal responsibilities to treat people’s data with proper care and transparency – to give them persistent control and choice.

Similarly the record fine we issued to TalkTalk. You could write an essay discussing the technical detail of the cyber-attack itself, but fundamentally, not enough respect – not enough care – was being given to the type of protection consumers would have expected of their personal information.

And without rehearsing the conversations we’ve had with parts of charity sector, there’s a similar theme: insufficient thought about the level of transparency donors would want, expect, or support.

They’re examples of organisations getting it wrong under the current Data Protection Act. GDPR is going to put even more of an onus on organisations to understand and respect the personal privacy rights of consumers.

GDPR

Because while the General Data Protection Regulation builds on the previous legislation, it provides more protections for consumers, and more privacy considerations for organisations. It brings a more 21st century approach to the processing of personal data.

The GDPR gives specific new obligations for organisations, for example around reporting data breaches and transferring data across borders.

But the real change for organisations is understanding the new rights for consumers.

Consumers and citizens will have stronger rights to be informed about how organisations use their personal data. They’ll have the right to request that personal data be deleted or removed if there’s no compelling reason for an organisation to carry on processing it, and new rights around data portability and how they give consent.

On that subject, do take a look at the guidance on consent that is now out for consultation, and will be discussed at our workshop later today.

Accountability and breadth

At the centre of the GDPR is the concept of broader and deeper accountability for an organisation’s handling of personal data. The GDPR brings into UK law a trend that we’ve seen in other parts of the world – a demand that organisations understand, and mitigate – the risks that they create for others in exchange for using a person’s data. It’s about a framework that should be used to build a culture of privacy that pervades an entire organisation. It goes back to that idea of doing more than being a technician, and seeing the broader responsibility and impact of your work in your organisation on society.

Making it matter to the boardroom

I’ve already spoken to some of you this morning, and I hear what you’re saying. You understand why having your organisation accept more accountability for data protection matters. You want to change the culture of your organisation. But in many cases, you need to convince your senior management first. So, what can I give you today to help you make that case when you go back to your offices tomorrow?

The fines are the obvious headline. The GDPR gives regulators greater enforcement powers. If an organisation can’t demonstrate that good data protection is a cornerstone of their business policy and practices, they’re leaving themselves open to enforcement action that can damage their public reputation and possibly their bank balance. That makes data protection a boardroom issue.

But there’s a carrot here as well as a stick, and as regulators we actually prefer the carrot. Get data protection right, and you can see a real business benefit.

Accepting broad accountability for data protection encourages an upfront investment in privacy fundamentals, but it offers a payoff down the line, not just in better legal compliance, but a competitive edge. Whether that means attracting more customers or more efficiently meeting pressing public policy needs, I believe there is a real opportunity for organisations to present themselves on the basis of how they respect the privacy of individuals. Over time this can play a real role in consumer choice.

What the ICO is doing

Gandhi said the future depends on what we do in the present. So let me talk a little about what my office is doing now, to help you prepare for the future.

I’ve worked as a regulator in this field for more than twelve years and my focus has always been on making sure the regulator is relevant. On making sure we’re taking on that challenge of not being mere technicians but instead are making a difference to the organisations we regulate through education. Making a difference to the public, through giving them an avenue to file a complaint and by sanctioning the bad actors.

Each of us in the information rights field, on a daily basis, tries to make a difference to the public. Collectively, we do a good job: I think people have never been more aware of their rights, of what they can expect of the businesses and organisations they trust with their data. But consumer trust hasn’t followed that. An ICO survey last year showed only one in four UK adults trust businesses with their personal data. And I don’t believe the figure would be much higher for the public sector. As a regulator, it’s one of my jobs to give you the tools and the support to turn that around.

I want to see comprehensive data protection programs as the norm, organisations better protecting the data of citizens and consumers, and a change of culture that makes broader and deeper data protection accountability a focus for organisations across the UK. I think that’s achievable.

We’ll be shortly announcing work we’ll be doing to contribute to that. We want to support independent research that helps people better navigate the digital world. Our research and grants programme will dedicate funds over the next five years to engaging the research community in finding ways to help consumers. More details in due course.

Post Brexit

And of course we need to be looking to the horizon, to what might exist beyond GDPR.

Fourteen months ago I was writing a speech for a different audience, in a different role. My appearance was at the Canadian annual privacy and security conference, as information and privacy commissioner for British Columbia. I was talking about the challenges of a digital economy that required data to flow across borders, where different legal systems and cultural norms about privacy make this a complicated undertaking. More specifically, I spoke about how changes within the EU affect those outside of it, particularly around adequacy.

How familiar does that sound today? The UK EU referendum decision means we’re facing the same challenges. The UK’s digital economy needs data to flow across borders: how do we make sure that can happen? How can we foster economic growth while still respecting citizen’s rights?

When the government comes to answer those questions beyond the implementation of GDPR in 2018, we expect to be at the centre of many conversations, speaking up for continued protection and rights for consumers, and clear laws for organisations. And addressing the strong data protection laws we’d need if we want to keep the UK’s approach at an equivalent standard to the EU.

Conclusion

Which brings us back to today. The GDPR is a strong data protection law. It gives consumers more control over their data. And it includes new obligations for organisations.

Today is about learning more about those obligations, more about data protection best practice, more about how to get it right.

Today is about helping you make the best use of tomorrow.

ADVICE FROM AN ASSESSOR: DevOps, Automation, Security and Compliance

By Andrew Barratt, QSA, PCIP.  Managing Director, International/Managing Principal, Payments, Application Validation
Coalfire; Manchester, UK, http://www.coalfire.com

Phew, the title of this post alone sounds like it could be quite a lot to deal with!

So what is DevOps?  DevOps is simply the blending of infrastructure operations processes and software development to enable faster changes to business applications/technology.  These processes share a lot of ideology with the Agile & Lean camps but are more fundamentally trying to bridge the traditional divide between the development world and the IT operations/Service management teams.

In practice, DevOps can mean a lot of different things to different audiences and sometimes it can be difficult to apply compliance requirements without getting a good understanding of what DevOps is for your company.

Terms such as ‘treat your code as infrastructure’ can often scare the life out of traditional auditors along with the fear that with rapid release and change comes rapid loss of control. These shouldn’t be scary but should be embraced and understood. In audit parlance these processes can become embedded, configurable application controls that require less substantive audit testing and sampling when under scrutiny and allow the focus to be on how they are designed to be a security control.

DevOps environments typically make heavy(think obsessive!) use of automation tools to enable rapid change and release processes to be possible at large and frequent scale. This is typically where the confusion starts to begin when evaluating these environments for security and compliance purposes. Typical service management controls such as change management on the surface may appear to have been cast aside in the rush to ‘be DevOps’. This rush to implement tooling can often lead to the underlying processes being weak or ill conceived. However this is common in other disciplines too. Poor planning = poor performance.

DevOps done well can bring a great set of tools and capability for building secure, scalable and compliant environments. Building on modern source control, streamlining change control and building dependency on the tools authentication and access control can quickly be used to demonstrate the control requirements of many compliance frameworks including the PCI DSS. Just doing things faster or without lots of paper forms and signatures on doesn’t necessarily equate to non-compliance.

The implementation of PCI DSS requirements 2 and 6 can be rapidly transformed using a DevOps approach. If we look at requirement 2 as being primarily focused on hardened configuration management traditionally seen as an ‘Ops’ area, whilst Requirement 6 focuses on change management and software development.

There is nothing fundamentally in these requirements (or in other areas of the DSS) that prevents a DevOps environment being used to support and implement PCI compliance if done carefully. Whilst the security and compliance mandate might tweak certain implementation decisions most of the tools marketed for ‘DevOps’ support building workflows that can be used for approval / review decisions and capture/log the necessary approval processes to support compliance. As the level of automation increases so can the ease of which compliance requirements be met.

Recently I worked with a client that had invested heavily in building their dev-ops tooling but had built in PCI requirements as part of this process so also incorporated automation of documentation production too.  Their focus was, and still is, to automate as much as possible into the release process to minimize the failure of an activity. Every time a new release was pushed all configuration documentation was also updated automatically (supporting requirement 2) .

This particular client used a software issue and tracking tool that could be used to demonstrate management approval for changes as well as to show that code review processes had been followed. As they continued to improve they were investigating automation of their code review processes so that static analysis tools were orchestrated immediately after changes were approved as part of the build process.

One of the biggest challenges they faced initially was the size of their team, they were small and specialist and in the past had struggled with creating segregation of duties between their test/production systems.  Moving to DevOps helped with this significantly. No developers were required to have access to production systems in any manner as the build and release process was entirely orchestrated by tools with an approval workflow that the developers couldn’t authorize alone. The tools were the only thing with the ability to push to their production systems and the workflow done under management approval. These tools were treated the same way as other in-scope systems but the overhead from this was so minimal that it enabled them meet security requirements without complicated manual processes and multiple sets of access permissions.

car-cracking

FASTRInfographic2017

Forrester predicts the Top 15 Dynamics that will shape 2017

2017 will be a year of action for many companies, as they address the realities of a fast-moving customer-led and digital-centric market,” said Cliff Condon, chief research and product officer at Forrester.

“Empowered customers are forcing the hand of virtually every industry. And so the question for most companies and business leaders is not if they will respond to these market dynamics, but when and how. Inaction presents immediate revenue risk or much worse a threat to a company’s existence

The top 15 dynamics that will shape 2017 are:

  1. The extent to which businesses will need to restructure to adapt to a customer-led market.
  2. How and how many CMOs can successfully evolve to meet new and expansive leadership demands.
  3. The likelihood that CIOs will rise to the challenge of leading digital business strategies.
  4. How CEOs will handle business unit and product leadership in a market dominated by empowered customers and disruptors.
  5. How transitional roles like chief data officer, chief digital office, and chief customer officer will fare.
  6. How businesses will react to acute cyber risk to maintain customer trust.
  7. Determining the scarce but critical talent required to lead in the age of the customer and how that will place significant pressure on both talent management and talent acquisition.
  8. Identifying new levels of revenue risk directly attributed to underperforming or even mediocre customer experiences.
  9. The extent to which companies are able to measure and operationalize emotion, which continues to be a primary driver of customer affinity and spend.
  10. How companies are designing signature moments to capture customers’ hearts, minds, and spend.
  11. The beginnings of a new technology revolution that will reshape how businesses operate and interact with customers.
  12. The role augmented reality and virtual reality will play in 2017 and where both are in their evolution.
  13. The implementation and impact of the internet of things in 2017.
  14. The impact and evolution of artificial intelligence to deliver contextually rich, personalized experiences.
  15. The next steps in cloud computing to change the architecture and economics of technology.

To gain more insights on the dynamics that will shape 2017, download Forrester’s predictions guide.

 

BYOD security market to reach over $337 million

Technavio’s market research analysts expect the global BYOD security market to reach over $337 million between 2016 and 2020 

The increased use of mobile devices, triggered by the growing need for employee mobility, is the fundamental driving force behind growth in this market.  

The increase in employee mobility and the rising adoption of the Bring-Your-Own-Device (BYOD) policy is leading to the increased use of mobile devices. Enterprises are increasingly adopting BYOD security solutions to secure their networks from growing security threats and to provide secure access to confidential information. 

North America accounts for more than 36% of the market share to dominate the global BYOD security market. The growing awareness among enterprises about the benefits of using BYOD security solutions on mobile devices coupled with the rise in the number of cyber-attacks and malware are some of the key factors contributing to the growth in the BYOD security market in the Americas during the forecast period.

The growing popularity of cloud-based BYOD security is the latest trend in the global BYOD security market. Cloud-based BYOD security does not require any hardware or software and can be controlled remotely, making it cost-effective for the end-users. Also, it has a faster response rate to the new security threats and unauthorized activities as well as allows companies to use software products on a pay-per-use basis and are cost effective. Limited hardware infrastructure, less dependency on internal IT personnel, faster implementation of IT solutions, no licensing costs, and low maintenance costs are some of the advantages of a cloud-based BYOD security system,” says Amrita Choudhury, Lead Analyst, ICT, Technavio Research.

Currently, the Mobile Content Management (MCM) segment occupies almost 52% of the market share to dominate the global BYOD security market. MCM is gaining prominence among large enterprises, government organizations, and small and medium-sized business (SMBs) because of the increased acceptance of the BYOD policy.  

Some vendors in the MCM market are even providing additional security features in the products that they are offering to gain consumer interest and market shares. For instance, AirWatch provides the Secure Content Locker that comprises of secure storage containers to safeguard data stored on mobile devices. 

The key vendors in the global BYOD security market include Citrix Systems, Good Technology, IBM, MobileIron, and VMware. The global BYOD security market highly fragmented owing to the presence of many international, regional, and local vendors. Established BYOD security solution vendors are likely to acquire small vendors to expand their product portfolio and increase their market share.  

During the forecast period, the level of vendor competition is likely to intensify with product and service extensions, technological innovations, and M&As.

 

Your Biggest Weakness Is Already on Your Payroll

Imperva IG

An Imperva Infographic

100 Percent of Retailers Disclose Cyber Risks

According to BDO’s analysis of risk factors listed in the most recent 10-K filings of the 100 largest U.S. retailers, risk associated with a possible security breach was cited unanimously by retailers, claiming the top spot, up from the 18th spot in 2007.

Since major retail security breaches began making national headlines in 2013, retailers have become acutely aware of the growing cyber threat and cyber-related risks. Between new point-of-sale systems and evolving digital channels, the industry faces unique vulnerabilities: Retailers are responsible for safeguarding consumer data as well as their own, in addition to protecting against potential gaps in security related to third-party suppliers and vendors.

2016 marks the 10th anniversary of our retail risk factor analysis, and throughout the decade, we’ve seen the retail landscape undergo a dramatic evolution in response to the recession, new and maturing e-commerce channels and evolving consumer preferences,” said Doug Hart, partner in BDO’s Consumer Business practice. “Retailers over the years have proven to be in tune with the industry-wide issues and trends that could pose risks to their businesses, and they are clearly not tone deaf when it comes to reacting to the urgency of cybersecurity

The following chart ranks the top 25 risk factors cited by the 100 largest U.S. retailers:

Top 20 Risks for Retailers 2016 2015 2014
General Economic Conditions #1 100% #1 100% #1 100%
Privacy Concerns Related to Security Breach #1t 100% #4t 99% #8 91%
Competition and Consolidation in Retail Sector #3 98% #1t 100% #3 98%
Federal, State and/or Local Regulations #4 96% #1t 100% #2 99%
Natural Disasters, Terrorism and Geo-Political Events #5 94% #7 96% #13 87%
Implementation and Maintenance of IT Systems #6 93% #4 99% #7 92%
U.S. and Foreign Supplier/Vendor Concerns #6t 93% #6 98% #4 96%
Legal Proceedings #6t 93% #9t 95% #8t 91%
Labor (health coverage, union concerns, staffing) #9 91% #7t 96% #5 94%
Impediments to Further U.S. Expansion and Growth #10 90% #12t 92% #17 78%
Dependency on Consumer Trends #11 88% #9 95% #6 93%
Consumer Confidence and Spending #12 87% #15 89% #8t 91%
Credit Markets/Availability of Financing and Company Indebtedness #13 85% #11 94% #11 89%
Failure to Properly Execute Business Strategy #14 82% #12 92% #11t 89%
Changes to Accounting Standards and Regulations #15 76% #14 90% #13t 87%
International Operations #16 73% #17 86% #15 80%
Loss of Key Management/New Management #16t 73% #19 80% #16 79%
Marketing, Advertising, Promotions and Public Relations #18 66% #25 68% #24 64%
Consumer Credit and/or Debt Levels #19 62% #27 65% #23 65%
Joint Ventures #20 61% #21 76% #18 74%

Additional findings from the 2016 BDO Retail Risk Factor Report:

Cyber Risks Include Compliance Measures

As the cyber threat looms larger, retailers are bracing for new and emerging cybersecurity and data privacy legislation. Risks associated with cyber and privacy regulations were cited by 76 percent of retailers this year. This is in line with the findings from the 2016 BDO Retail Compass Survey of CFOs, in which nearly 7 in 10 retail CFOs said they expected cyber regulation to grow in 2016. These concerns have been highlighted by President Obama’s recently unveiled Commission on Enhancing National Cybersecurity and continued debate in Congress over information sharing between the government and private industry.

Retailers have not escaped regulatory scrutiny. The industry is also subject to Europay, Mastercard and Visa (EMV) standards that bolster credit card authentication and authorization. Industry analysts estimate that just 40 percent of retailers are compliant with EMV standards despite the Oct. 1, 2015 deadline.

“Mandating EMV chip-compliant payment systems is an important first step in shoring up the industry’s cyber defenses, but it’s just the tip of the iceberg,” said Shahryar Shaghaghi, National Leader of the Technology Advisory Services practice group and Head of International BDO Cybersecurity. “Online and mobile transactions remain vulnerable to credit card fraud and identity theft, and POS systems can still be hacked and provide an access point to retailers’ networks. New forms of malware can also compromise retailers’ IT infrastructure and disrupt business operations. Every retailer will experience a data breach at some juncture; the real question is what mechanisms have been put in place to mitigate the impact.”

E-Commerce Ubiquity Drives Brick & Mortar Concerns

Impediments to e-commerce initiatives also increased in ranking, noted by 57 percent of retailers in 2016, a significant contrast from 12 percent in 2007. In 2015, e-commerce accounted for 7.3 percent of total retail sales and is continuing to gain market share.

As e-commerce grows and businesses strive to meet consumers’ demand for seamless online and mobile experiences, retailers are feeling the effects in their physical locations. The recent wave of Chapter 11 bankruptcies and mass store closings among high-visibility retailers has raised concerns across the industry. Ninety percent of retailers are worried about impediments to growth and U.S. expansion this year. Meanwhile, risks associated with owning and leasing real estate jumped 14 percentage points to 54 percent this year.

Heightened worries over the impact of e-commerce on physical locations are far reaching, driving concerns over market competition for prime real estate and mall traffic to rise 19 percentage points to 46 percent. Meanwhile, consumer demand for fast shipping fueled an uptick in risks around the increased cost of mail, paper and printing, rising 10 percentage points from seven percent in 2015 to 17 percent this year.

General Economic Conditions Hold Weight

General economic risks have been consistently top of mind for retailers throughout all ten years of this survey. Even at its lowest percentage in 2008, this risk was still the second most cited, noted by 83 percent of companies.

Despite the fact that since 2013, general economic conditions have remained tied for the top risk, concerns about specific market indicators have receded.

For more information on the 2016 BDO Retail RiskFactor Report, view the full report here.

About the Consumer Business Practice at BDO USA, LLP

BDO has been a valued business advisor to consumer business companies for over 100 years. The firm works with a wide variety of retail and consumer business clients, ranging from multinational Fortune 500 corporations to more entrepreneurial businesses, on myriad accounting, tax and other financial issues.

Demystifying 9 Common Types of Cyber Risk

Economic, Technology, & Marketing Thought Leadership

1)       Crimeware
This is designed to fraudulently obtain financial gain from either the affected user or third parties by emptying bank accounts, or trading confidential data, etc. Crimeware most often starts with advanced social engineering which results in disclosed info that leads to the crimeware being installed via programs that run on botnets which are zombie computers in distant places used to hide the fraudsters I.P (internet protocal) trail. Usually the victim does not know they have crimeware on their computer until they start to see weird bank charges or the like, or an I.T. professional points it out to them. Often times it masquerades as fake but real looking antivirus software demanding your credit card info in an effort to then commit fraud with that info.

2)       Cyber-Espionage
The term generally refers to the deployment of viruses that clandestinely observe or destroy data in the computer systems of government agencies and…

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healthcare-apps

Breaches caused by either hacking or malware nearly doubled in relative frequency

Beazley, a leading provider of data breach response insurance, today released its Beazley Breach Insights 2016 findings based on its response to over 2,000 breaches in the past two years. The specialized Beazley Breach Response (BBR) Services unit responded to 60% more data breaches in 2015 compared to 2014, with a concentration of incidents in the healthcare, financial services and higher education sectors.

Key data:

  • Breaches caused by either hacking or malware nearly doubled in relative frequency over the past year. In 2015, 32% of all incidents were caused by hacking or malware vs. 18% in 2014.
  • Unintended disclosure of records – such as a misdirected email – accounted for 24% of all breaches in 2015, which is down from 32% in 2014.
  • The loss of non-electronic physical records accounted for 16% of all breaches in 2015, which is unchanged from 2014.
  • The proportion of breaches involving third party vendors more than tripled over the same period, rising from 6% of breaches in 2014 to 18% of breaches in 2015.

Beazley’s data breach statistics are based on 777 incidents in 2014 and 1,249 in 2015.

We saw a significant rise in incidents caused by hacking or malware in the past year,” said Katherine Keefe, global head of BBR Services. This was especially noticeable in healthcare where the percentage of data breaches caused by hacking or malware more than doubled

Ransomware on the rise in healthcare

Hackers are increasingly employing ransomware to lock up an organization’s data, holding it until a ransom is paid in nearly untraceable Bitcoin. Hollywood Presbyterian Hospital in Los Angeles reported suffering a ransomware attack in February 2016 and ultimately paid the hackers $17,000 in Bitcoin. A year earlier, the FBI had issued an alert warning that ransomware attacks were on the rise.

This trend is borne out by Beazley’s data. Breaches involving ransomware among Beazley clients more than doubled to 43 in 2015 and the trend appears to be accelerating in 2016. Based on figures for the first two months of the year, ransomware attacks are projected to increase by 250% in 2016.

Clearly, new malware programs, including ransomware, are having a big impact, said Paul Nikhinson, privacy breach response services manager for BBR Services. Hacking or malware was the leading cause of data breaches in the healthcare industry in 2015, representing 27% of all breaches, more than physical loss at 20%

Healthcare is a big target for hackers because of the richness of medical records for identity theft and other crimes. In fact, a medical record is worth over 16 times more than a credit card record.”

Higher Education

Higher education also experienced an increase in breaches due to hacking or malware with these accounting for 35% of incidents in 2015, up from 26% in 2015.

Colleges and universities are reporting increased “spear phishing” incidents in which hackers send personalized, legitimate-looking emails with harmful links or attachments. The relatively open nature of campus IT systems, widespread use of social media by students and a lack of the restrictive controls common in many corporate settings make higher education institutions particularly vulnerable to data breaches.

Financial Services

In the financial services sector, hacking or malware was up modestly to 27% of industry data breaches in 2015 versus 23% in 2014. Trojan programs continued to be a popular hacking device.

The State of Cybersecurity in Healthcare Organizations in 2016

ESET and the Ponemon Institute have announced results of The State of Cybersecurity in Healthcare Organizations in 2016.

According to the study, healthcare organizations average about one cyber attack per month with 48% of respondents said their organizations have experienced an incident involving the loss or exposure of patient information during the last 12 months. Yet despite these incidents, only half indicated their organization has an incident response plan in place.

The concurrence of technology advances and delays in technology updates creates a perfect storm for healthcare IT security,” said Stephen Cobb, senior security researcher at ESET. “The healthcare sector needs to organize incident response processes at the same level as cyber criminals to properly protect health data relative to current and future threat levels. A good start would be for all organizations to put incident response processes in place, including comprehensive backup and disaster recovery mechanisms. Beyond that, there is clearly a need for effective DDoS and malware protection, strong authentication, encryption and patch management

Key findings of the survey:

78% of respondents, the most common security incident is the exploitation of existing software vulnerabilities greater than three months old.

63% said the primary consequences of APTs and zero-day attacks were IT downtime

46% of respondents experienced an inability to provide services which create serious risks for patient treatment.

Hackers are most interested in stealing patient information

  • The most attractive and lucrative target for unauthorized access and abuse can be found in patients’ medical records, according to 81% of respondents.

Healthcare organizations worry most about system failures

  • 79% of respondents said that system failures are one of the top three threats facing their organizations
  • 77% cyber attackers
  • 77% unsecure medical devices

Technology poses a greater risk to patient information than employee negligence

  • 52% of respondents said legacy systems and new technologies to support cloud and mobile implementations, big data and the Internet of Things increase security vulnerabilities for patient information
  • 46% of respondents also expressed concern about the impact of employee negligence
  • 45% cited the ineffectiveness of HIPAA mandated business associate agreements designed to ensure patient information security

DDoS attacks have cost organizations on average $1.32 million in the past 12 months

  • 37% of respondents say their organization experienced a DDoS attack that caused a disruption to operations and/or system downtime about every four months. These attacks cost an average of $1.32 million each, including lost productivity, reputation loss and brand damage.

Healthcare organizations need a healthy dose of investment in technologies

  • On average, healthcare organizations represented in this research spend $23 million annually on IT
  • 12% on average is allocated to information security
  • Since an average of $1.3 million is spent annually for DDoS attacks alone, a business case can be made to increase technology investments to reduce the frequency of successful attacks

Based on our field research, healthcare organizations are struggling to deal with a variety of threats, but they are pessimistic about their ability to mitigate risks, vulnerabilities and attacks,” said Larry Ponemon, chairman and founder of The Ponemon Institute. “As evidenced by the headline-grabbing data breaches over the past few years at large insurers and healthcare systems, hackers are finding the most lucrative information in patient medical records. As a result, there is more pressure than ever for healthcare organizations to refine their cybersecurity strategies

Over 35% of organisations in the energy sector are not able to track threats

Tripwire 2016 Energy Survey: Physical Damage

Tripwire’s 2016 energy study was conducted by Dimensional Research on the cyber security challenges faced by organizations in the energy sector. The study was carried out in November 2015, and respondents included over 150 IT professionals in the energy, utilities, and oil and gas industries.

“After hundreds of years protecting our nation’s geographic borders, it is sobering to note that possibly the most vulnerable frontier happens to be the infrastructure that runs the largest companies in the country.”

Rheka Shenoy, VP and general manager of industrial IT cyber security for Belden

Does your organization have the ability to accurately track all the threats targeting your OT networks?

tripwire-2016-energy-survey-physical-damage-

Does your organization have the ability to accurately track all the threats targeting your OT networks?

tripwire-2016-energy-survey-physical-damage- 2
In your opinion, is your organization a target for a cyberattack that will cause physical damage?
tripwire-2016-energy-survey-physical-damage- 3
Is your organization a potential target for a nation-state cyberattack?
tripwire-2016-energy-survey-physical-damage- 4
The incredibly high percentages of these responses underscores the need for these industries to take material steps to improve cyber security. These threats are not going away. They are getting worse. We’ve already seen the reality of these responses in the Ukraine mere months after this survey was completed. There can be no doubt that there is a physical safety risk from cyber attacks targeting the energy industry today. While the situation may seem dire, in many cases there are well understood best practices that can be deployed to materially reduce the risk of successful cyber attacks.

Tim Erlin, director of IT security and risk strategy for Tripwire

More fines next year for nuisance call companies

Companies making nuisance calls have been warned to expect more fines in 2016.

The ICO imposed more than a million pounds worth of penalties for nuisance calls and text messages in 2015, with the same amount in the pipeline for early 2016.

The fines included:

  • £295,000 of fines for companies offering call blocking or nuisance call prevention services
  • A £80,000 fine to a PPI claims firm that sent 1.3million text messages
  • A £200,000 fine to a solar panels company that made six million nuisance calls
  • A £130,000 fine to a pharmacy company that was selling customer details to postal marketing companies

Total fines related to nuisance marketing in 2015:

  • £400,000 fines for nuisance texts (Help Direct UK Ltd; Oxygen Ltd; UKMS Money Solutions Ltd)
  • £575,000 fines for nuisance calls (Direct Assist Ltd; Point One Marketing Ltd; Cold Call Elimination Ltd; Home Energy & Lifestyle Management Ltd (HELM); Home Energy & Lifestyle Management Ltd;  Nuisance Call Blocker Ltd; Telecom Protection Service Ltd)
  • £130,000 fine for selling customer records for marketing (Pharmacy 2U Ltd)
  • £30,000 fine for sending marketing email (Telegraph Media Group Ltd)

Total: £1,135,000. 

Andy Curry, ICO Enforcement Group Manager, said:

Nuisance marketing calls frustrate people. The law is clear around what is allowed, and we’ve been clear that we will fine companies who don’t follow the law. That will continue in 2016. We’ve got 90 ongoing investigations, and a million pounds worth of fines in the pipeline

The ICO received around 170,000 concerns in 2015 from people who’ve received nuisance calls and texts, a similar number to the previous year (2014: 175,330). PPI claims prompted the most complaints, followed by accident claims. Areas identified as emerging sectors for nuisance calls and texts included call blocking services, oven cleaning services and industrial hearing injury claims.

The following are examples of complaints showed the level of distress that calls can cause:

Telecom Protection Service:

“I was recovering from major surgery at the time and the call caused me distress. The caller was very smooth talking and did not make it clear that he was selling a commercial service that was nothing to do with the TPS. The call was frankly misleading.”

HELM:

“I am receiving daily updates regarding a friend in hospital, and am expecting the worst. When these calls come in I expect it to be from the hospital.”

Cold Call Elimination:

“This company has ‘conned’ my mother out of £84.99 for an unnecessary service … my parents are 87 and 86 respectively; my father is suffering from dementia.”

“I am looking after my elderly mother who has terminal cancer. She initially answered and I could see I needed to intervene as I could hear the sales guy not giving up. I took the phone and asked him who he was and what he wanted. He got quite annoyed that I had intervened and I told him we were not interested.”

Point One Marketing:

“Very upset and angry that my mum, who has dementia, was talked into giving credit card details when it would have been obvious to the caller that she had dementia. This caused my mum distress because I had to explain why her debit card had to be cancelled and what she had done. This has caused both of us great distress. Had I not checked her call log and … the number that had called her I would not have known it had happened at all.”

Utilities Oil Gas Risk Infograph

PCI SSC revises date for migrating off vulnerable SSL and early TLS encryption

Following significant feedback from the global PCI community and security experts, the Payment Card Industry Security Standards Council (PCI SSC) has announced a change to the date that organizations who process payments must migrate to TLS 1.1 encryption or higher.

The original deadline date for migration, June 2016, was included in the most recent version of the PCI Data Security Standard, version 3.1 (PCI DSS 3.1), which was published in April of 2015. The new deadline date, June 2018, will be included in the next version of the PCI Data Security Standard, which is expected in 2016.

Early market feedback told us migration to more secure encryption would be technically simple, and it was, but in the field a lot of business issues surfaced as we continued dialog with merchants, payment processors and banks,” said Stephen Orfei, General Manager, PCI SSC. “We want merchants protected against data theft but not at the expense of turning away business, so we changed the date. The global payments ecosystem is complex, especially when you think about how much more business is done today on mobile devices around the world. If you put mobile requirements together with encryption, the SHA-1 browser upgrade and EMV in the US, that’s a lot to handle. And it means it will take some time to get everyone up to speed. We’re working very hard with representatives from every part of the ecosystem to make sure it happens as before the bad guys break in.

Some payment security organizations service thousands of international customers all of whom use different SSL and TLS configurations,” said Troy Leach, Chief Technology Officer, PCI SSC. “The migration date will be changed in the updated Standard next year to accommodate those companies and their clients. Other related provisions will also change to ensure all new customers are outfitted with the most secure encryption into the future. Still, we encourage all organizations to migrate as soon as possible and remain vigilant. Staying current with software patches remains an important piece of the security puzzle

In addition to the migration deadline date-change, the PCI Security Standards Council has updated:

  • A new requirement date for payment service providers to begin offering more secure TLS 1.1 or higher encryption
  • A requirement for new implementations to be based on TLS 1.1 or higher
  • An exception to the deadline date for Payment Terminals, known as “POI” or Points of Interaction.

Merchants are encouraged to contact their payment processors and / or acquiring banks for detailed guidance on upgrading their ecommerce sites to the more secure encryption offered by TLS 1.1 or higher.

PCI Security Standards council announces 2016 special interest group election results

The Payment Card Industry Security Standards Council (PCI SSC), has announced the election results for its 2016 Special Interest Group (SIG) project. 

Special Interest Groups are community-led initiatives that address important security challenges related to PCI Security Standards. One new Special Interest Group is selected every year, but groups may run for more than 12 months in order to complete the agreed-upon goals. 

PCI member organizations, including merchants, financial institutions, service providers and associations, voted on five proposed Special Interest Group topics submitted by their peers. The winning topic selected for 2016 was, “Best Practices for Safe E-Commerce 

The new Special Interest Group is slated to kick off in January 2016

The Council invites PCI member organizations and assessors interested in getting involved in this SIG project to register on the PCI SSC website by 4 January 2016.  

The community choose from among five strong proposals, so it was certainly not an easy decision,” said Jeremy King, International Director, PCI SSC. “We are encouraged by how many Participating Organizations were involved in the submission and election process this year. SIGs continue to be an excellent vehicle for putting their expertise to work to improve payment card security globally

 

How to Hack a Car – an infograph

How a Car Hack Attack Is Happening [Infographic]

how-car-hack-attacks-are-happening-infographic-large

Originally posted on Coinspeaker, here.

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