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Brian Pennington

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Security Metrics to Manage Change: Which Matter, Which Can Be Measured? A Ponemon Study.

The Firemon sponsored study by Ponemen surveyed 597 individuals who work in IT, IT security, compliance, risk management and other related fields. All respondents are involved in IT security management activities in their organizations. They also are involved in assessing or managing the impact of change on their organization’s IT security operations. The following are the themes of this study:

  • Tale of two security departments
  • The importance of metrics to driving more informed decisions
  • Practices to achieve effective security change management
  • The right metrics for managing change

What is security change management?

Ponemon defines this in the study as “security change management as a formal approach to assessing, prioritizing and managing transitions in personnel, technologies, policies and organizational structures to achieve a desired state of IT security. The security risk landscape is defined as rapidly mutating threats at every point of entry from the perimeter to the desktop; from mobile to the cloud. The fast evolution of the threat landscape and changes in network and security architectures creates a challenging and complex security ecosystem.

The key findings of the study

The security posture perception gap puts organizations at risk. 13% of respondents would rate the security posture of their organization as very strong. Whereas, 33% of respondents say their CEO and Board believes the organization has a very strong security posture. Such a gap reveals the problems the security function acknowledges in accurately communicating the true state of security.

Why can’t communication be better? 71% of respondents say communication occurs at too low a level or only when a security incident has already occurred (63% of respondents). 51% admit to filtering negative facts before talking to senior executives.

Agility is key to managing change. However, when asked to rate their organization’s agility in managing the impact of change on IT security operations, only 16% of respondents say their organizations have a very high level of agility and 25% say it is very low.

Metrics that reveal the impact of change are most valuable. According to 74% of respondents, security metrics that measure the impact of disruptive technologies on security posture are important. 62% of respondents say metrics fail to provide this important information.

Real-time analysis for managing change is essential. When asked about the importance of real-time analysis for managing changes to the organization’s security landscape, 72% of respondents say it is essential or very important. 12% say it is not important.

Organizations are not using more advanced procedures to understand the impact of change on their organization’s security posture. 26% of respondents say they are using manual processes or no proactive processes to identify the impact of changes on the organization’s security posture. 15% are using automated risk impact assessments, 13% say they are using continuous compliance monitoring and 11% rely on internal or external audits.

Senior executives are believed to have a more positive outlook on the effectiveness of their IT security function. While respondents rate their organization’s security posture as just about average, they believe their CEOs and board members have a much more positive perception, and would rate their organization’s security posture as above average. 13% of respondents would rate the security posture as strong. Whereas, 33% of respondents say their CEO and Board believes their organization has a very strong security posture. This perception gap signals that security practitioners are not given an opportunity and/or cannot communicate effectively the true state of security in the organization. As a result it is difficult to convince senior management of the need to invest in the right people, processes and technologies to manage security threats. Likewise, respondents believe key stakeholders also consider the organization’s security posture as being above average. 26% of respondents say this group rates their organization’s security posture as very strong. These include business partners, vendors, regulators, and competitors.

Lack of communication seems to be at the root of the C-suite and IT security disconnect. Too little and too late characterizes communication to senior executives about the state of security risk. 29% of respondents say they do not communicate to senior executives about risks and 31% say such communication only occurs when a serious security risk is revealed. As a result, they admit the state of communication about security risks is not effective. 6% of respondents say they are highly effective in communicating all relevant facts to management.

Why can’t communication be better? The main complaints are that communication occurs at too low a level or when a security incident has already occurred. Other problems stem from the existence of silos that keep information from being communicated throughout the organization. Respondents also recognize that the technical nature of the information could be frustrating for senior executives. Very often, the whole story is not revealed because negative facts are filtered before being disclosed to senior executives and the CEO.

What are the implications of senior executives and IT security not having the same understanding of the organization’s security effectiveness? According to the findings, an important capability such as having the agility to manage the impact of change on IT security operations could be affected by not being able to convince management of the need for enough resources, budget and technologies. When asked to rate their organization’s overall agility in managing the impact of change on IT security operations, respondents say it is fairly low. 16% of respondents say their organizations have a very high level of agility and 25% say it is very low. This is also the case when asked to rate their organization’s effectiveness in managing the impact of change on IT security operations. 17% say their organizations are very effective and 30% say their organizations are very ineffective.

The top three barriers to achieving effective security change management activities are

  1. insufficient resources or budget
  2. lack of effective security technology solutions
  3. lack of skilled or expert personnel

When asked about the importance of real time-analysis for managing changes to the organization’s security landscape, 72% of respondents say it is essential or very important. 12% say it is not important.

  • 26% of respondents say they are using manual processes or no proactive processes to identify the impact of changes on the organization’s security posture
  • 15% are using automated risk impact assessments
  • 13% say they are using continuous compliance monitoring
  • 11% rely on internal or external audits

Those technologies most often fully deployed to facilitate the management of changes that impact an organization’s security risk profile are:

  • Incident detection and alerting (including SIEM)
  • Vulnerability risk management
  • Network traffic monitoring
  • Security configuration management follow
  • Technologies that are often only partially deployed are log monitoring (46% of respondents) and file integrity monitoring (35% of respondents).
  • Minimally or not deployed at all are: big data analytics (64% of respondents), automated policy management (45% of respondents), and sandboxing (44% of respondents).

Current metrics in use do not communicate the true state of security efforts. When asked if the metrics that are in use today adequately convey the true state of security efforts deployed by their organization, 43% of respondents say they do not and 11% are unsure. The biggest reasons for the failure to accurately measure the state of security are more pressing issues take precedence, communication with management only occurs when there is an actual incident, the information is too technical to be understood by nontechnical management, and a lack of resources to develop or refine metrics.

What are the strengths and weaknesses of the security function? Respondents were asked rate their organizations’ ability to accomplish seven specific factors that may impact the security posture. The findings reveal that most respondents say their organizations are best at managing security threats, hiring and retaining competent security staff and employees and discovering and containing compromises and breaches quickly. They are not as effective at achieving compliance with leading security standards and frameworks and minimizing third-party security risks.

What events are most likely to disrupt the organization’s infrastructure and ability to manage security threats? The expansion of mobile platforms and migration to the cloud are the most likely to affect the security posture. Use of employee-owned devices (BYOD) and the implementation of a next generation firewall have moderate impact. Events that are considered to have a low impact are the move or consolidation of data center resources, implementation of virtualized computing and storage, a security audit failure, and reorganizing and downsizing the enterprise and IT function. Who is accountable for managing the risk created by the introduction of such changes as mobile platforms and the clouds? According to respondents, most responsible for managing the impact of these changes is the CIO or CTO followed by no one has overall responsibility.

Metrics must be aligned with business goals. 83% of respondents say it is important to have security metrics fully aligned with business objectives. However, most organizations represented in this study do not seem to be achieving this goal. In fact, 69% say security metrics sometimes conflict with the organization’s business goals.

  • 74% agree that security metrics that show the impact of disruptive technologies on security posture are important
  • 62% of respondents say metrics fail to provide information about the impact of change
  • 54% agree that metrics do not help understand the vulnerabilities to criminal
  • 46% of respondents say they do not help assess or manage risks caused by the migration to the cloud
  • 56% agree that metrics can help justify investment in people, processes and technologies
  • 57% of respondents agree the CEO and board do care about the metrics used to measure security posture

What is the metrics that matter gap? Respondents were asked to rate the metrics most important in communicating relevant facts about the state of security risks to senior executives and IT management. The top metrics in terms of their importance are discovery and containment of compromises and breaches and management of resources and spending. However, the actual average use of metrics in these categories average only 43% and 37% of organizations represented in this research. The biggest gaps in importance vs. use are with metrics that track disruption to business & IT operations (36% gap), management of resources and spending (35% gap), and discovery and containment of compromises and breaches (31% gap). The smallest gaps between importance and use are with third-party risks (7%) and staff and employee competence (2%).

Tracking how fast a security incident is discovered and contained is the most important metric but not often used.

Practices to achieve effective security change management. In this section, we look at the different practices of organizations that were self-reported to have a high security posture and those that have a low security posture. The findings reveal that there is a difference in the technologies deployed, perceptions about barriers to managing the impact of change to the security infrastructure, effectiveness in communication with senior management, and frequency of communications.

Firemon’s report can be found here.

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BYOD, Cloud and the Internet are the top areas of concern for security threats.

A Dell global security survey reveals “the majority of IT leaders say they do not view these threats as top security concerns and are not prioritizing how to find and address them across the many points of origin”.

Key findings of Dell’s research include:

  • 37% ranked unknown threats as a top security concern in the next five years
  • 64% of respondents agree that organizations will need to restructure/reorganize their IT processes, and be more collaborative with other departments to stay ahead of the next security threat. Of those surveyed in the United States, 85% said this approach is needed, contrasting with Canada at 45% followed by the U.K. at 43%
  • 78% in the Unites States think the federal government plays a positive role in protecting organizations against both internal and external threats, which underscores the need for strong leadership and guidance from public sector organizations in helping secure the private sector
  • 67% of survey respondents say they have increased funds spent on education and training of employees in the past 12 months
  • 50% believe security training for both new and current employees is a priority
  • 54% have increased spending in monitoring services over the past year; this number rises to 72% in the United States

Among the IT decision-makers surveyed, BYOD, cloud and the Internet were the top areas of concern for security threats.

BYOD. A sizable number of respondents highlighted mobility as the root cause of a breach, with increased mobility and user choice flooding networks with access devices that provide many paths for exposing data and applications to risk.

  • 93% of organizations surveyed allow personal devices for work. 31% of end users access the network on personal devices (37% in the United States)
  • 44% of respondents said instituting policies for BYOD security is of high importance in preventing security breaches
  • 57% ranked increased use of mobile devices as a top security concern in the next five years (71% in the U.K.)
  • 24% said misuse of mobile devices/operating system vulnerabilities is the root cause of security breaches

Cloud. Many organizations today use cloud computing, potentially introducing unknown security threats that lead to targeted attacks on organizational data and applications. Survey findings prove these stealthy threats come with high risk.

  • 73% of respondents report their organizations currently use cloud (90% in the United States)
  • 49% ranked increased use of cloud as a top security concern in the next five years, only 22% said moving data to the cloud was a top security concern today
  • In organizations where security is a top priority for next year, 86% are using cloud
  • 21% said cloud apps or service usage are the root cause of their security breaches

Internet. The significance of the unknown threats that result from heavy use of Internet communication and distributed networks is evidenced by

  • 63% of respondents ranked increased reliance upon internet and browser-based applications as a top concern in the next five years.
  • More than one-fifth of respondents consider infection from untrusted remote access (Public Wifi) among the top three security concerns for their organization
  • 47% identified malware, viruses and intrusions often available through web apps, OS patching issues, and other application-related vulnerabilities as the root causes of breaches
  • 70% are currently using email security to prevent outsider attacks from accessing the network via their email channel

76% of IT leaders surveyed (93% in the United States) agree that to combat today’s threats, an organization must protect itself both inside and outside of its perimeters.

The full Dell report can be found here.

Challenges to maintaining a strong security posture

A very interesting piece of research by the Ponemon Institute on behalf of the security vendor Sophos.  A summary of the study is below. 

Cyber security is often not a priority

  • 58% of respondents say that management does not see cyber-attacks as a significant risk
  • 44% say a strong security posture is not a priority.
  • Those two findings reveal the difficulty IT functions face in securing the necessary funding for skilled personnel and technologies. As evidence, 42% of respondents say their budget is not adequate for achieving an effective security posture.
  • While an organization’s IT leaders often depend upon the need to comply with regulations and compliance to make their case for IT security funding, 51% of respondents say it does not lead to a stronger security posture. More important is obtaining management’s support for making security a priority.

Senior management rarely makes decisions about IT security

Who is responsible for determining IT Security Priorities?

  • CIO 32%
  • 31% no one

Lack of in-house expertise hinders the achievement of a strong security posture

  • Organizations represented in this research face a lack of skilled and expert security professionals to manage risks and vulnerabilities. Only 26% of respondents say they have sufficient expertise, with 15% not sure. On average, three employees are fully dedicated to IT security.

Security threats and attacks experienced

“Did our organization have a cyber-attack? I don’t really know.” When asked if they were attacked in the past 12 months

  • 42% of respondents say they were
  • 33% are unsure
  • 1/3 of respondents say they are unsure if an attack has occurred in the past 12 months
  • Of the 42% who say an attack occurred, most likely it was likely the result of phishing and social engineering, denial of service and botnets and advanced malware/zero day attacks.

Data breach incidents are known with greater certainty

More respondents can say with certainty that a data breach occurred in their organization. For purposes of the research, a data breach is the loss or theft of sensitive information about customers, employees, business partners and other third parties. 51% say their organization experienced an incident involving the loss or exposure of sensitive information in the past 12 months although 16% say they are unsure.

More than half of respondents say their organization has had a data breach

  • 51% Cited is a third-party mistake or negligent employee or contractor
  • 44% cannot identify the root cause.

Most organizations say cyber-attacks are increasing or there is no change

  • 76% of respondents say their organizations face more cyber-attacks or at least the same
  • 18% are unable to determine

Most organizations see cyber-attacks as becoming more sophisticated

  • 56% say cyber-attacks are more sophisticated
  • 45% say they are becoming more severe
  • 28% of respondents are uncertain if their organizations are being targeted
  • 25% are unsure if the attacks are more sophisticated
  • 23% do not know if these attacks are becoming more severe.

The research reveals there is often confusion as to what best describes advanced persistent threats (APT). When asked to select the one term that best fits their understanding, only one-third of respondents say they are recurrent low profile targeted attacks but the same percentage of respondents are not sure how to describe them. As a result, there may be uncertainty as to what dedicated technologies are necessary for preventing them.

Disruptive technology trends

The cloud is important to business operations

  • 72% of respondents do not view security concerns as a significant impediment to cloud adoption within their organizations
  • 77% say the use of cloud applications and IT infrastructure services will increase or stay the same
  • 39% of their organization’s total IT needs are now fulfilled by cloud applications and/or infrastructure services

The use of cloud applications and IT infrastructure is not believed to reduce security

Effectiveness

  • 45% of respondents say the cloud is not considered to have an affect on security posture
  • 12% say it would actually diminish security posture
  • 25% of respondents say they cannot determine if the organization’s security effectiveness would be affected

The use of mobile devices to access business-critical applications will increase

  • 46% of an organization’s business-critical applications are accessed from mobile devices such as smart phones, tablets and others.
  • 69% of respondents expect this usage to increase over the next 12 months.

While respondents do not seem to be worried about cloud security, mobile device security is a concern.

  • 50% of respondents say such use diminishes an organization’s security posture
  • 58% say security concerns are not stopping the adoption of tablets and smart phones within their organization.

BYOD also affects the security posture

  • 26% of mobile devices owned by employees are used to access business-critical applications.
  • 70% of respondents either expect their use to increase or stay the same
  • 71% say security concerns do not seem to be a significant impediment to the adoption of BYOD

BYOD is a concern for respondents

  • 32% say there is no affect on security posture
  • 45% of respondents believe BYOD diminishes an organization’s security effectiveness.

Effectiveness of security technologies

The majority of respondents have faith in their security technologies

  • 54% of respondents say the security technologies currently used by their organization are effective in detecting and blocking most cyber attacks
  • 23% are unsure

Big data analytics and web application firewalls are technologies growing in demand

Today, the top three technologies in use are:

  1. Antivirus
  2. client firewalls
  3. endpoint management

They are likely to remain the top choice over the next three years. The deployment of certain technologies is expected to grow significantly. Investment in big data analytics and web application firewalls will see the greatest increases (28% and 21%, respectively). These technologies are followed by: endpoint management (19% increase), anti-virus and next generation firewalls (both15% increase) and network traffic intelligence and unified threat management (both 14% increase). The percentage of respondents who say the use of IDS and SIEM technologies decreases slightly (6%) over the next three years.

The cost impact of disruptions and damages to IT assets and infrastructure

Damage or theft to IT assets and infrastructure are costly

  1. 1 the cost of damage or theft to IT assets and infrastructure
  2. 2 the cost of disruption to normal operations

The estimated cost of disruption exceeds the cost of damages or theft of IT assets and infrastructure.

Using an extrapolation, we compute an average cost of $670,914 relating to incidents to their IT assets and infrastructure over the past 12 months. Disruption costs are much higher, with an extrapolated average of $937,197

The uncertainty security index

The study reveals that in many instances IT and IT security practitioners participating in this research are uncertain about their organization’s security strategy and the threats they face. Specifically, among participants there is a high degree of uncertainty about the following issues:

  • Did their organization have a cyber-attack during the past year?
  • Did their organization have a data breach? If so, did it involve the loss or exposure of sensitive information?
  • Are the root causes of these data breaches known?
  • Are the cyber-attacks against their organization increasing or decreasing?
  • Have exploits and malware evaded their intrusion detection systems and anti-virus solutions?
  • Do they understand the nature of advanced persistent threats (APTs)?
  • Is the use of BYOD to access business critical applications increasing and does it affect their organization’s security posture?
  • Is the use of cloud applications and/or IT infrastructure services increasing and does it affect the security posture

Uncertainty about how these issues affect an organization’s security posture could lead to making sub-optimal decisions about a security strategy. It also makes it difficult to communicate the business case for investing in the necessary expertise and technologies. Based on the responses to 12 survey questions, we were able to create an “uncertainty index” or score that measures where the highest uncertainty exists. The index ranges from 10 (greatest uncertainty) to 1 (no uncertainty).

U.S. organizations have the highest uncertainty index. This is based on the aggregated results of respondents in the following countries and regions: US, UK, Germany and Asia-Pacific. With an uncertainty score of 3.8, organizations in Germany seem to have the best understanding of their security risks.

Smaller organizations have the most uncertainty. Those organizations with a headcount of less than 100 have the most uncertainty. This is probably due to the lack of in-house expertise. As organizational size increases, the uncertainty index becomes more favourable.

An organization’s leadership team has the most uncertainty. This finding indicates why IT and IT security practitioners say their management is not making cyber security a priority. Based on this finding, the higher the position the more removed the individual could be in understanding the organization’s risk and strategy.

Retailing, education & research and entertainment have the highest uncertainty. The level of uncertainty drops significantly for organizations in the financial services and technology sectors. The high degree of certainty in the financial sector can be attributed to the need to comply with data security regulations.

PCI-DSS and PA-DSS Version 3.0 – the full highlights and changes

Brian Pennington

The PCI SSC considered many things when drafting Version 3.0 of the PCI DSS and PA DSS standards including:

  • What will improve payment security?
  • Global applicability and local market concerns
  • Appropriate sunset dates for other standards or requirements
  • Cost/benefit of changes to infrastructure
  • Cumulative impact of any changes

The nature of the changes reflects the growing maturity of the payment security industry since the Council’s formation in 2006, and the strength of the PCI Standards as a framework for protecting cardholder data. Cardholder data continues to be a target for criminals.

Lack of education and awareness around payment security and poor implementation and maintenance of the PCI Standards leads to many of the security breaches happening today.

The updates address these challenges by building in additional guidance and clarification on the intent of the requirements and ways to meet them. Additionally, the changes in PCI DSS and PA-DSS 3.0 focus…

View original post 1,770 more words

Tripwire’s second installment of research on the state of risk-based security management with the Ponemon Institute has once again revealed some interesting insights into the workings of the IT Department. 

The survey covers risk-based security metrics and evaluates the attitudes of 1,321 respondents (749 U.S. and 571 U.K.) from IT security, IT operations, IT risk management, business operations, compliance/internal audit and enterprise risk management.

The key findings from the survey are:

  • 75% of respondents say metrics are ‘important’ or ‘very important’ to a risk-based security program
  • 53% don’t believe or are unsure that the security metrics used in their organizations are properly aligned with business objectives
  • 51% didn’t believe or are unsure that their organizations metrics adequately convey the effectiveness of security risk management efforts to senior executives

When asked, “Why don’t you create metrics that are well understood by senior executives?”:

  • 59% said the information is too technical to be understood by non-technical management
  • 48% said pressing issues take precedence
  • 40% said they only communicate with executives when there is an actual security incident
  • 35% said it takes too much time and resources to prepare and report metrics to senior executives
  • 23% of U.S. respondents and 20% of those in the U.K. think security metrics can be ambiguous, which may lead to poor decisions
  • 18% said senior executives are not interested in the information

 So, why isn’t communication between security professionals and executives more effective? Respondents were asked to select all the factors that apply from a list of nine possible reasons, and their answers present a wide range of serious challenges. The top three responses include organizations hampered by siloed information, presenting information not easily understood by non-technical managers, and the practice of filtering “bad news” from the C-suite.

  • 68% of U.S. and 57% of U.K. respondents say communications are confined to one department or line of business
  • 61% say the information is too technical and occurs at too low a level
  • 59% state that negative facts are filtered before getting to executives

Commenting on these results, Dr. Larry Ponemon, chairman and founder of the Ponemon Institute, said,

Even though most organizations rely on metrics for operational improvement in IT, more than half of IT professionals appear to be concerned about their ability to use metrics to communicate effectively with senior executives about security

These results correlate with the dozens of conversations we have been having with CISO’s across the globe,” said Rekha Shenoy, vice president of marketing and corporate development at Tripwire

CISO’s talk about the importance of leveraging metrics as a way to influence business leadership and build a risk management practice within their companies. Unfortunately, they struggle with the bigger challenge of producing meaningful metrics while those they use are rarely aligned with business goals

Tripwire summary

While the majority of security professionals agree they need significant amounts of data in order to build a culture of ac­countability, they aren’t sure how to distill this information into metrics that are understandable, relevant and actionable to senior business leadership. Business metrics tend to reflect the value of strategic goals rather than technical goals, and may prioritize cost over less tangible security benefits. Security metrics tend to reflect operational goals and may prioritize technical improvement over business context.

What happens after a data breach?

A report by Solera Networks and Ponemon reveals rise in security breaches, with organisations taking months to detect and contain them.

The Ponemon report “The Post Breach Boom”’ commissioned by Solera Networks polled 3,529 IT and IT security professionals in eight countries to understand the steps they are taking in the aftermath of malicious and non-malicious data breaches over the past 24 months.

Highlights of the research include:

Data breaches are on the rise and organizations are unprepared to detect them or resolve them:

  • 54% of respondents said data breaches have increased in both severity
  • 52% said the frequency had increased

Additionally

  • 63% say that knowing the root causes of breaches strengthens their organization’s security posture
  • 40% say they have the tools, personnel and funding to pinpoint the root causes
  • Breaches remain undiscovered and unresolved for months. On average, it is taking companies nearly three months (80 days) to discover a malicious breach and then more than four months (123 days) to resolve it.
  • Security defences are not preventing a large portion of breaches. One third of malicious breaches are not being caught by any of the companies’ defences they are instead discovered when companies are notified by a third party, either law enforcement, a partner, customer or other party or discovered by accident.
  • 34% of non-malicious breaches are discovered accidentally
  • Malicious breaches are targeting key information assets within organization. 42% of malicious breaches targeted applications
  • 36% targeted user accounts

Details of Impact and the cost of breaches from the report

  • On average, malicious breaches cost $840,000, significantly more costly than non-malicious data breaches at $470,000.
  • The average cost of a data breach per compromised record is $194
  • However, if the root cause is the result of a malicious insider or attack the average per record cost climbs to $222
  • While breaches attributed to a negligent insider averages far less at $174 per compromised record

For non-malicious breaches, lost reputation, brand value and image were reported as the most serious consequences by participants. For malicious breaches, organizations suffered lost time and productivity followed by loss of reputation.

Following a malicious breach, organizations more often invested in enabling security technologies (65% vs. 42% of respondents). More often they also made changes to its operations and compliance processes to better prevent and detect future breaches (63% vs. 54%).

Endpoint security and encryption tools were the most popular following a non-malicious breach and SIEM and encryption tools were most frequently purchased following a malicious breach. Breaches drive increased spending on data security, according to 61% of respondents. The average increase is 20%.

52% of respondents say the breach resulted in an increase in spending on forensic capabilities. Among those organizations that spent more the increase was an average of 33%. This represents 13% more than the increase in data security funding.

Security breaches continue to occupy the headlines on a daily basis, making it clear that there is still much work to be done before companies are prepared for the inevitability of today’s advanced targeted attacks,” said John Vecchi, vice president of marketing, Solera Networks. “In a post-prevention world, organizations must shift their focus toward attaining the real-time visibility, context and big data security analytics needed to see, detect, eradicate and respond to advanced malware and zero-day attacks

“Our study confirms that organizations are facing a growing flood of increasingly malicious data breaches, and they don’t have the tools, staff or resources to discover and resolve them,” said Larry Ponemon, chairman and founder, Ponemon Institute. “Meanwhile, months are passing as their key information assets are left exposed. The results demonstrate a clear need for greater and faster visibility as well as a need to know the root cause of the breaches themselves in order to close this persistent window of exposure

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The average cost of a data breach is $8.9m in the US and £2.1m in the UK

The results of the Ponemon 2012 Cost of Cyber Crime Study for the United States, United Kingdom, Germany, Australia and Japan. For the purposes of this post I have summarised the United States and the United Kingdom.

The study, sponsored by HP Enterprise Security, focused on organizations located in the United States and the United Kingdom many are multinational corporations.

Cyber-attacks generally refer to criminal activity conducted via the Internet. These attacks can include stealing an organization’s intellectual property, confiscating online bank accounts, creating and distributing viruses on other computers, posting confidential business information on the Internet and disrupting a country’s critical national infrastructure. Consistent with the previous two studies, the loss or misuse of information is the most significant consequence of a cyber-attack. Based on these findings, organizations need to be more vigilant in protecting their most sensitive and confidential information. 

  • The median annualised cost for 38 UK benchmarked organisations is £2.1 million per year, with a range from £.4 million to £7.7 million each year per company.
  • The median annualized cost for 56 US benchmarked organizations is $8.9 million per year, with a range from $1.4 million to $46 million each year per company. 

UK Summary

Cybercrimes are costly. The study found that the median annualised cost for 38 benchmarked organisations is £2.1 million per year, with a range from £.4 million to £7.7 million each year per company. 

Cybercrime cost varies by organisational size. Results reveal a positive relationship between organisational size (as measured by enterprise seats) and annualised cost. However, based on enterprise seats, Ponemon determined that smaller-sized organisations incur a significantly higher per capita cost than larger-sized organisations (£399 versus £89). 

All industries fall victim to cybercrime, but to different degrees. The average annualised cost of cybercrime appears to vary by industry segment, where defence, utilities and energy and financial service companies experience higher costs than organisations in hospitality, retail and education. 

Cybercrimes are intrusive and common occurrences. The companies participating in our study experienced 41 successful attacks per week, or about 1.1 successful attacks per organisation. 

The most costly cybercrimes are those caused by malicious insider, denial of service and malicious code. These account for more than 44% of all cybercrime costs per organisation on an annual basis. Mitigation of such attacks requires enabling technologies such as SIEM, intrusion prevention systems, application security testing solutions and enterprise GRC solutions. 

Cyber-attacks can get costly if not resolved quickly. Results show a positive relationship between the time to contain an attack and organisational cost. The average time to resolve a cyber-attack was 24 days, with an average cost to participating organisations of £135,744 over this 24-day period. Results show that malicious insider attacks can take more than 50 days on average to contain. 

Disruption to business processes and revenue losses represent the highest external costs. This is followed by theft of information assets. On an annualised basis, disruption to business or lost productivity account for 38% of external costs. Costs associated with revenue losses and theft of information assets represents 53% of external costs. 

Recovery and detection are the most costly internal activities. On an annualised basis, recovery and detection combined account for 55% of the total internal activity cost with cash outlays and labour representing the majority of these costs. 

Deployment of security intelligence systems makes a difference. The cost of cybercrime is moderated by the use of security intelligence systems (including SIEM). Findings suggest companies using security intelligence technologies were more efficient in detecting and containing cyber-attacks. As a result, these companies enjoyed an average cost savings of £.4 million when compared to companies not deploying security intelligence technologies. 

Deployment of enterprise security governance practices moderates the cost of cybercrime. Findings show companies that have adequate resources, appoint a high-level security leader, and employ certified or expert staff experience cybercrime costs that are lower than companies that have not implemented these practices. This so-called “cost savings” for companies deploying good security governance practices is estimated at more than £.3 million, on average. 

A strong security posture moderates the cost of cyber-attacks. Ponemon utilize a well-known metric called the Security Effectiveness Score (SES) to define an organisation’s ability to achieve reasonable security objectives. The higher the SES, the more effective the organisation is in achieving its security objectives. The average cost to mitigate a cyber-attack for organisations with a high SES is substantially lower than organisations with a low SES score.

Summary of US findings

Cybercrimes continue to be very costly for organizations. Ponemon found that the median annualized cost for 56 benchmarked organizations is $8.9 million per year, with a range from $1.4 million to $46 million each year per company. Last year’s median cost per benchmarked organization was $8.4 million. Ponemon observe a $500,000 (6%) increase in median values. 

Cybercrime cost varies by organizational size. Results reveal a positive relationship between organizational size (as measured by enterprise seats) and annualized cost. However, based on enterprise seats, Ponemon determined that small organizations incur a significantly higher per capita cost than larger organizations ($1,324 versus $305). 

All industries fall victim to cybercrime, but to different degrees. The average annualized cost of cybercrime appears to vary by industry segment, where defence, utilities and energy and financial service companies experience higher costs than organizations in retail, hospitality and consumer products. 

Cybercrimes are intrusive and common occurrences. The companies participating in our study experienced 102 successful attacks per week – or 1.8 successful attacks per organization. In last year’s study, an average of 72 successful attacks occurred per week. 

The most costly cybercrimes are those caused by denial of service, malicious insider and web-based attacks. This account for more than 58% of all cybercrime costs per organization on an annual basis.4 Mitigation of such attacks requires enabling technologies such as SIEM, intrusion prevention systems, applications security testing solutions and enterprise GRC solutions. 

Cyber-attacks can get costly if not resolved quickly. Results show a positive relationship between the time to contain an attack and organizational cost. The average time to resolve a cyber-attack was 24 days, with an average cost to participating organizations of $591,780 during this 24-day period. This represents a 42% increase from last year’s estimated average cost of $415,748, which was based upon an 18-day resolution period. Results show that malicious insider attacks can take more than 50 days on average to contain. 

Information theft continues to represent the highest external cost, followed by the costs associated with business disruption. On an annualized basis, information theft accounts for 44% of total external costs (up 4% from 2011). Costs associated with disruption to business or lost productivity account for 30% of external costs (up 1% from 2011). 

Recovery and detection are the most costly internal activities. On an annualized basis, recovery and detection combined account for 47% of the total internal activity cost with cash outlays and labour representing the majority of these costs. 

Deployment of security intelligence systems makes a difference. The cost of cybercrime is moderated by the use of security intelligence systems (including SIEM). Findings suggest companies using security intelligence technologies were more efficient in detecting and containing cyber-attacks. As a result, these companies enjoyed an average cost savings of $1.6 million when compared to companies not deploying security intelligence technologies. 

A strong security posture moderates the cost of cyber-attacks. Ponemon utilize a well-known metric called the Security Effectiveness Score (SES) to define an organization’s ability to achieve reasonable security objectives. The higher the SES, the more effective the organization is in achieving its security objectives. The average cost to mitigate a cyber-attack for organizations with a high SES is substantially lower than organizations with a low SES score. 

Deployment of enterprise security governance practices moderates the cost of cybercrime. Findings show companies that invest in adequate resources, appoint a high-level security leader, and employ certified or expert staff have cybercrime costs that are lower than companies that have not implemented these practices. This so-called “cost savings” for companies deploying good security governance practices is estimated at more than $1 million, on average. 

UK report is here – registration is required. 

US report is here  – registration is required.

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Database security and SIEM are the top Risk and Compliance concerns

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The McAfee report Risk and Compliance Outlook: 2012, has been published and has discovered Database Security and Security Information and Event Management (SIEM) were among the top priorities due to an increase in Advanced Persistent Threats (APT).

Database hold the valuable data the criminals are searching for, it therefore follows that Database Security is a growing issue and one flagged as the biggest concern. The report indicates that over one quarter of those surveyed had either had a breach or did not have the visibility to detect a breach. This is a huge concern when considering that most compliance requirements are concerned with knowing if a breach could or has occurred for example Payment Card Industry Compliance (PCI DSS) and the pending European Wide Data Protection Act.

The other major was Security Information Event Management (SIEM) which correlates well with the fears over Database Security with approximately 40% of organizations planning on implementing or update their SIEM solution.

Key findings of the report:

  • Similar to the 2011 survey, there is a positive trend in security budgets for 2012 with 96% of the organizations indicating same or more expenditure on risk and compliance
  • Organization state ‘Compliance’ as the driver for almost 30% of IT projects
  • Software and Appliance are the top choices for Risk and Compliance products. On average, one-third of all organizations prioritized the upgrade/implementation of unique risk and compliance products to address vulnerability assessment, patch management, remediation, governance, risk management, and compliance
  • Survey data showed rapid uptake towards Hosted SaaS and Virtualization. Nearly 40% organizations claim to be moving towards these deployment models in 2012
  • Patch Management frequency is a challenge – almost half of the organizations patch on a monthly basis with one-third doing it on a weekly basis. Just like last year’s analysis, not all companies are able to pinpoint threats or vulnerabilities, as a result, 43% indicate that they over-protect and patch everything they can

“Managing risk through security and compliance continues to be a leading concern for organizations the world over,” said Jill Kyte, vice president of security management at McAfee. “Meeting the requirements of increasingly demanding regulations while reducing exposure to the new classes of sophisticated threats and having an accurate understanding of risk and compliance at any point in time — can be challenging. To address this issue, organizations are looking to ‘best-of-breed’ solutions to manage all aspects of their risk and compliance needs and reduce the amount of time spent managing multiple solutions.”

Some other headline findings of the survey show:

  • Visibility is a pervasive challenge organizations continually face in managing their IT risk posture. The issues revolve around having the visibility to see vulnerabilities within their processes and controlling the ever-changing internal and external threat vectors
  • 80% of the survey respondents recognize the importance of visibility; more than 60% have about the same visibility they had in 2010; 27% improved their visibility since 2010; and 8% now have less visibility compared to 2010
  • The top two controls that respondents have implemented to manage risk and subsequently their compliance postures are the monitoring of databases and of configuration changes for the entire enterprise environment/ infrastructure
  • Approximately 60% of surveyed organizations view SIEM solutions as an important solution to provide real-time visibility into their applications, databases, system performance, and event correlation

A summary of the whole report is below along with a link to the full report.

Risk and Compliance Posture

During 2011, over 60% of the respondents implemented and updated existing tools to improve the visibility and control of their IT processes in an effort to minimize organizational risk. Product groupings include:

  • Risk Management
  • Application, Database and Network Vulnerability Assessment
  • Log Management and Security Information Event Management (SIEM)
  • Database Activity Monitoring
  • Policy Compliance Assessment and Governance Risk and Compliance (GRC)

Respondents indicate that their 2012 implementation and upgrade priorities include

  • Risk Management at 19% and 18% respectively
  • Vulnerability Assessment at 18% and 19%
  • Patch Management at 16% and 21%
  • SIEM at 16% and 21%
  • Further, 48% of the respondents (an increase of 8% over last year) indicate that their organizations have updated/deployed a GRC solution in 2011 in an effort to aggregate and monitor organizational risk and compliance status

Overall it appears that enterprises recognize that they cannot efficiently address risk unless they understand what they are up against and can apply the appropriate controls. Without this knowledge and insight, the effectiveness of any security and compliance efforts cannot be effectively measured against the risks there are:

  • 39% of incidents involved a negligent employee or contractor
  • 37% concerned a malicious or criminal attack
  • 24% involved system glitches including a combination of both IT and business process failures

Mainline cybercriminals continued to automate and streamline their method du jour of high-volume, low-risk attacks against weaker targets. Most victims fell prey because they were found to possess an (often easily) exploitable weakness rather than because they were pre-identified for attack. Given this, it’s not surprising that most breaches were avoidable (at least in hindsight) without difficult or expensive countermeasures

Patch Management

At the time they wrote the report McAfee believed there are over 49,000 known common vulnerabilities and exposures (CVE’s) as reported by US-Cert National Vulnerability Database (NVD).

During 2011 the NVD reported 3,532 vulnerabilities, which translates to about ten new security vulnerabilities being discovered each day. While the rate of newly discovered vulnerabilities is impressive, the good news is that the trend is on a descending path: 4,258 vulnerabilities were reported in 2010 and the peak was in 2008, when almost 7,000 vulnerabilities were reported.

More than half of the surveyed companies indicated they know precisely which assets need to be patched when new threats materialize to prevent the threats from impacting their businesses. Conversely, 15% of the surveyed indicate they are not confident in their ability to know which assets to patch when new threats materialize.

Comparison of patch cycle (weekly, monthly, and quarterly) to confidence levels shows that that as the patching frequency declines so does an organization’s confidence. Specific analysis shows:

  • Organizations with weekly patching practice – 53% feel confident about patching of assets
  • Organizations with monthly patching practice – 49% feel confident about patching of assets
  • Organizations with quarterly patching practice – 43% feel confident about patching of assets

SIEM

Ever changing threats, data breaches, and IT complexity add additional burdens to the already difficult tasks associated with having the visibility necessary to monitor security events, detect attacks, and assess real and potential damage.

Near real-time visibility is critical to any risk management program in today’s complex and diverse computing environments. Without it, organizations are flying blind.

Similar to last year,

  • approximately half of the respondents spend 6 to 10 hours per month on risk management activities that assess and correlate the impact of threats on their organizations
  •  7% of small organizations (1,000 or less employees) spend 15-20 hours on risk and threat activities
  • 16% of organizations with more than 1,000 employees spent 15-20 hours on risk and threat activities

Policy Compliance and Configuration Challenges in Achieving Compliance

Regardless if an organization views industry standards and compliance mandates as a way to improve their practices or as a necessary evil, implementing standards is just the beginning of the road to compliance.

The real challenge often lies in maintaining compliance over time, especially as compliance standards and mandates evolve and increase in number. Organizations need to recognize:

  • Business and technology boundaries are constantly changing, expanding
  • New technology brings new risks, new processes and thus new compliance issues
  • Businesses require flexibility to maintain competitiveness – rigid controls can hinder flexibility, thus hurt operational effectiveness.

According to the Ponemon Institute

“True Cost of Compliance” study: “…while the average cost of compliance for the organizations in our study is $3.5 million, the cost of non-compliance is much greater. The average cost for organizations that experience non-compliance related problems is nearly $9.4 million.”

Database Security When asked about sensitive database breaches,

  • 12% of the organizations stated that they have experienced a breach
  • 15% “are not sure”

These results indicate weakness in security control effectiveness and a lack of visibility. Conversely, three-fourths of the respondents overall and in particular those from North America, Germany and the UK, indicate that their databases have never been breached.

According to Forrester Research analyst Noel Yuhanna in his most recent database security market overview report:

“The database security market is likely to converge with the overall data security market in the future, as DBMS vendors extend the security features that are bundled with their products”.

Mr Yuhanna’s market insight closely corresponds with our respondents’ use of database security solutions:

  • 49% of the organizations use dedicated database security solutions; McAfee, followed by Oracle, tops the list of database security solution providers
  • 42% of the organizations use DBMS vendor security features to protect their databases
  • As compared to 34% organizations from Brazil, a higher number of organizations from France (66%) and the UK (58%) have dedicated database security solutions. Regional analysis shows 61% of Brazil-based organizations use DBMS vendor security features compared to 36% of the North American organizations. IBM holds a strong market share in North America, France and Germany as compared to its share in APAC and the UK.

The link to the full McAfee report is here.

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