Risk Assessments: Knowing What to Protect

2011-10-04 by . 1 comments

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A company’s data is as much a risk as it is an asset. The way that customer data is stored in modern times requires it to be protected as a vulnerable asset and regarded as an unrealized liability even if not considered on the annual financial statement. In many jurisdictions this is enforced by legislation (eg Data Protection Act of 1998 in the UK)

One of the challenges of this as a modern concern lies in knowing where your data is.

To make a comparable example, consider a company that owns its place of operation. That asset must be protected with an investment both for sound business sense and by regulatory requirement. Fire protection, insurance, and ongoing maintenance are assumed costs that are considered all but mandatory. A company that isn’t covering those costs is probably not standing on all its legs. The loss of a primary building because of inadequate investment in protection and maintenance could be anywhere from a major event to fatal to the company.

It may seem a surreal comparison, but data exposure can have an impact as substantial as losing a primary building. A bank without customer records is dead regardless of the cash on hand. A bank with all its customer records made public is at risk of the same fate. Illegitimate transactions, damage to reputation, liability for customer losses related to disclosure and regulatory reaction may all work together to end an institution.

Consider how earlier this year Sony’s Playstation online gaming network was hacked. In the face of this compromise Sony estimated their present losses at $171 million, suffered extended periods of service downtime, and suffered further breaches in attempting to restore service. Further losses are likely as countries around the world investigate the situation and consider fines. Private civil suits have also been brought in response to the breaches. To put the numbers in perspective, the division responsible for the Playstation network posted a 2010 loss of approximately $1 billion dollars.

In total (across several divisions), Sony suffered at least 16 distinct instances of data loss or unintended access including an Excel file containing sweepstakes data from 2001 that Sony posted online. No compromise was needed for that particular failure — the file was readily available and indexed by Google. In the end, proprietary source code, administrator credentials, customer birthdays, credit card information, telephone numbers and home addresses were all exposed.

In regards to Sony’s breaches, the following question was posed, “If you were called by Sony right now, had 100% control over security, what would you do in the first 24-hours?” The traditional response is isolating breaches, identifying them, restoring service with the immediate attack vectors closed, and shoring up after that. However, from the outside Sony’s issue appears to be systemic. Their systems are varied, complicated, and numerous. Weaknesses appear to be everywhere. They were challenged in returning to a functioning state because even they were not compromised in an isolated way. Isolating and identifying breaches was far as one could get in those first 24 hours. Indeed, a central part of the division’s core revenue business was out of service for roughly 3 weeks.

The root issue behind everything is likely that Sony isn’t aware of their assets. Everything grew in place organically and they didn’t know what to protect. Sony claims it encrypted its credit card data, but researchers have found numbers related to the attack. Other identifying information wasn’t encrypted. Regardless of the circumstances related to the disclosure of credit card data, Sony failed protect other valuable information that can make it liable for fraud. Damage to Sony’s reputation and regulatory reaction, including Japan preventing restarting the service there at least through July, are additional issues.

The lack of awareness about what data is at risk can impact a business of any size. Much as different types of fire protection are needed to deal with an office environment, outdoor tire storage at an auto shop, a server room and a chemical factory, different types of security need to be applied to your data based on its exposure. Water won’t work on a grease fire, and encrypting a database has no value if a query can be run against it to retrieve all the information without encryption. While awareness is acute about credit card sensitivity, losing names, addresses, phone numbers and dates of birth can present just as much risk for fraud and civil or regulatory liability. This is discussed in ‘Data Categorisation – critical or not?’ and should be a key step in any organisation’s plans for resilience.

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  • [...] in Security, we have an entry that ties in very nicely with our most recent podcast: Risk Assessments: Knowing What to Protect. This entry sums up the crux of business risk, and why security is not only relevant to everyone, [...]

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