Larry Ponemon

The Third Annual Study on the State of Endpoint Security Risk, sponsored by Morphisec, reveals that organizations are not making progress in reducing their endpoint security risk, especially against new and unknown threats. In fact, in this year’s research, 68 percent of respondents report that their company experienced one or more endpoint attacks that successfully compromised data assets and/or IT infrastructure over the past 12 months, an increase from 54 percent of respondents in 2017.

A webinar on the report is available for free at Morphisec’s website.

“Corporate endpoint breaches are skyrocketing and the economic impact of each attack is also growing due to sophisticated actors bypassing enterprise antivirus solutions,” said Larry Ponemon, Chairman and Founder of Ponemon Institute. “Over half of cybersecurity professionals say their organizations are ineffective at thwarting major threats today because their endpoint security solutions are not effective at detecting advanced attacks.”

Ponemon Institute surveyed 671 IT security professionals responsible for managing and reducing their organization’s endpoint security risk. Companies represented in this research are very concerned about the significant increase in new and unknown threats against their organization (an increase from 69 percent of respondents in 2017 to 73 percent in 2019). On a positive note, since 2017 more respondents say their organizations have ample resources to minimize IT endpoint risk due to infection or compromise (an increase from 36 percent to 44 percent).

Following are 10 key findings from this research.

1. The frequency of attacks against endpoints is increasing and detection is difficult. Sixty-eight (68) percent of respondents say the frequency of attacks has increased over the past 12 months. More than half of respondents (51 percent) say their organizations are ineffective at surfacing threats because their endpoint security solutions are not effective at detecting advanced attacks.

2. The cost of successful attacks has increased from an average of $7.1 million to $8.94 million. Costs due to the loss of IT and end-user productivity and theft of information assets have increased. The cost of system downtime has decreased significantly since 2017. 

3. New or unknown zero-day attacks are expected to more than double in the coming year. The frequency of existing or known attacks is expected to decrease significantly from 77 percent to an anticipated 58 percent in the coming year. In contrast, the frequency of new or unknown zero-day attacks is expected to increase to 42 percent next year. 

4. An average of 80 percent of successful breaches are new or unknown “zero-day attacks.” These attacks either involved the exploitation of undisclosed vulnerabilities or the use of new/polymorphic malware variants that signature-based detection solutions do not recognize.
5. Zero-day attacks continue to increase in frequency. In addition to being more successful, zero-day attacks have also become more prevalent. As a result, organizations are investing more budget to protect against these threats. 

6. Most organizations either use or plan to use Microsoft Windows Defender antivirus solution. Eighty percent (80) of respondents say they currently have (34 percent) or plan to have in the near future (46 percent) the Microsoft Windows Defender antivirus solution. The top two reasons are to reduce the number of separate endpoint security tools and the solution is on par with other antivirus tools. 

7. The challenge in the use of traditional antivirus solutions are a high number of false positives and security alerts, inadequate protection and too much complexity. Fifty-six (56) percent of respondents say their organizations replaced their endpoint security solution in the past two years. Of these respondents, 51 percent say they kept their traditional antivirus solution but added an extra layer of protection. According to these respondents, the challenges with traditional antivirus solutions are a high number of false positives and security alerts, inadequate protection and too much complexity in the deployment and management of these solutions. 

8. Antivirus products missed an average of 60 percent of attacks. Confidence in traditional antivirus (AV) solutions continues to drop. On average, respondents estimate their current AV is effective at blocking only 40 percent of attacks. In addition to the lack of adequate protection, respondents cite high numbers of false positives and alerts as challenges associated with managing their current AV solutions. 

9. The average time to apply, test and fully deploy patches is 97 days. The findings reveal the difficulties in keeping endpoints effectively patched. Forty percent (40) of respondents say their organizations are taking longer to test and roll out patches in order to avoid issues and assess the impact on performance.

10. Ineffectiveness and lack of in-house expertise are reasons not to use an EDR. Sixty-four (64) percent of respondents who say their organizations do not have an EDR cite its ineffectiveness against new or unknown threats (65 percent of respondents) followed by 61 percent who say they don’t have the staff to support.

Go to Morphisec’s website to read the full report.

Bob Sullivan

Nearly 100,000 scam-ready domains have been registered since the Covid-19 pandemic began. It’s the Super Bowl for digital criminals, the golden age of computer fraud. Why? Because a con artist’s best friend is urgency.

We are living through the golden age of scams right now, so I’m going to do an ongoing series about coronavirus crimes.  First up: My conversation with Grace Brombach, who just wrote a report on scams(PDF) for the U.S. Public Interest Research Group.

“We are dealing with so much fear and confusion right now,” Brombach tells me. “People are being put in a very difficult situation where they don’t really know what to believe.”

Of particular worry: Homebound computer users are being told to download all kinds of new software and fill out forms full of personal information, doing things that ordinarily they would never do. For example: Employees are working from home, Zooming everywhere.  Think about how believable an email might be that appeared to come from an HR department, promising new video conference guidelines or requiring new software installation.

Making matters worse, as cybersecurity expert Harri Hursti has told me, a lot of corporate security software is designed to look for unusual patterns in network traffic — like massive downloads or a surprising number of remote logins. Everything is unusual now.

In addition, there’s also a lot of burden on parents (and grandparents) to help their kids do schoolwork from home. That opens up a big attack vector.   Urgent messages claiming to be from schools, including assertions that children have been infected are particularly insidious.

Brombach says most scams fall into two categories: Sale of false cures; and phishing scams designed to commit ID theft. Some of these emails are incredibly believable. There are email alerts from scammers posing as the CDC or WHO promising Covid alerts. Criminals benefit from trading off the trust big brand names have.

“There was a recent map that came out tracking coronavirus cases … posing from Johns Hopkins and when people would click on the map it would actually download malware onto their computers to steal their personal information,” Brombach said. “It’s all across the board…They really are difficult to identify.”

NOTE: Organizations like WHO or the CDC will not send you unsolicited texts or emails unless you’ve already signed up for them.  But given all the talk about contact tracing apps, it’s easy to understand why a consumer might fall for a text message with an alert warning them they’d been near someone who’d tested positive for Covid.

“There’s this misconception that people have of, ”I would never fall for a scam,’ but some of them are so, so believable, so it’s really important to be on your guard as much as possible,” Brombach warned.

Here’s the scams she’s most worried about in the near future:

• Criminals offering help with economic impact payments. In some cases, only an SSN and a birthdate are needed to access government benefits.  In other cases, criminals are promising frustrated aid recipients they can help get faster payments.
• Fake Covid testing sites
• Price gouging
• Fake cures and treatments. “It’s so hard for the FDA to keep up with all these claims,” she said. Also, remember that it’s generally legal to sell supplements with broad claims like immune system boosting.

You can hear my conversation with PIRG’s Grace Brombach by clicking play below or by clicking on this link

Larry Ponemon

Ponemon Institute is pleased to present the findings of The Economic Value of Prevention in the Cybersecurity Lifecycle, sponsored by Deep Instinct. The cybersecurity lifecycle is the sequence of activities an organization experiences when responding to an attack. The five high-level phases are prevention, detection, containment, recovery and remediation.

We surveyed 634 IT and IT security practitioners who are knowledgeable about their organizations’ cybersecurity technologies and processes. Within their organizations, most of these respondents are responsible for maintaining and implementing security technologies, conducting assessments, leading security teams and testing controls.

“If we could quantify the cost savings of the prevention of attacks, we would be able to increase our IT security budget and debunk the C-suite’s myth that AI is a gimmick. I believe AI is critical to preventing attacks.” —  CISO, financial services industry.

The key takeaway from this research is that when attacks are prevented from entering and causing any damage, organizations can save resources, costs, damages, time and reputation.

To determine the economic value of prevention, respondents were first asked to estimate the cost of one of the following five types of attacks: phishing, zero-day, spyware, nation-state and ransomware. They were then asked to estimate what percentage of the cost is spent on each phase of the cybersecurity lifecycle, including prevention. Because there are fixed costs associated with the prevention phase of the cybersecurity lifecycle, such as in-house expertise and investments in technologies, there will be a cost even if the attack is stopped before doing damage. For example, the average total cost of a phishing attack is $832,500 and of that 82 percent is spent on detection, containment, recovery and remediation. Respondents estimate 18 percent is spent on prevention. Thus, if the attack is prevented the total cost saved would be $682,650 (82 percent of $832,500).

Seventy percent of respondents (34 percent + 36 percent) believe the ability to prevent cyberattacks would strengthen their organization’s cybersecurity posture. However, 76 percent of respondents (40 percent + 36 percent) say they have given up on improving their ability to prevent an attack because it is too difficult to achieve.

The following are the most noteworthy findings from the research.

• Organizations are most effective in containing cyberattacks. Fifty-five percent of respondents say their organizations are very or highly effective at containing attacks in the cybersecurity lifecycle. Less than half of respondents (46 percent) say their organizations are very or highly effective in preventing cyberattacks. Organizations are also allocating more of the IT security budget to technologies and processes in the containment phase than in the prevention phase. 

• Prevention of a cyberattack is the most difficult to achieve in the cybersecurity lifecycle. Eighty percent of respondents say prevention is very difficult to achieve followed by recovery from a cyberattack. The reason for the difficulty is that it takes too long to identify an attack. Other reasons are outdated or insufficient technologies and lack of in-house expertise. The technology features considered most important are the ability to prevent attacks in real-time and based on different types of files. 

• Automation and advanced technologies increase the ability to prevent cyberattacks. Sixty percent of respondents say their organizations currently deploy AI-based or plan to deploy AI for cybersecurity within the next 12 months. Sixty-seven percent of respondents believe the use of automation and advanced technologies would increase their organizations’ ability to prevent cyberattacks. Further, 67 percent of respondents expect to increase their investment in these technologies as they mature. 

• Deep learning is a form of AI and is inspired by the brain’s ability to learn. In the context of this research, deep learning is defined as follows: once a human brain learns to identify an object, its identification becomes second nature. Deep learning’s artificial brains consist of complex neural networks and can process high amounts of data to get a profound and highly accurate understanding of the data analyzed. The top three reasons to incorporate a deep- learning-based-solution are to lower false positive rates, increase detection rates and prevent unknown first-seen cyberattacks. 

• Perceptions that AI could be a gimmick and lack of in-house expertise are the two challenges to deployment of AI-based technologies. Fifty percent of respondents say when trying to gain support for the adoption of AI there is internal resistance because it is considered a gimmick. This is followed by the inability to recruit personnel with the necessary expertise (49 percent of respondents).

• Organizations are making investments in technology that do not strengthen their cybersecurity budget based on the wrong metrics. Fifty percent of respondents say their organizations are wasting limited budgets on investments that don’t improve their cybersecurity posture. The primary reasons for the failure are system complexity, personnel and vendor support issues. Another reason is that most organizations are using return on investment (ROI) to justify investments and is not based on the technology’s ability to increase prevention and detection rates. 

• IT security budgets are considered inadequate. Only 40 percent of respondents say their budgets are sufficient to achieve a strong cybersecurity posture. The average total IT budget is $94.3 million and of this 14 percent or approximately $13 million is allocated to IT security. Nineteen percent or approximately $2.5 million will be allocated to investments in enabling security technologies such as AI, machine learning, orchestration, automation, blockchain and more.

Sample finding:

With the exception of the exploitation phase of the kill chain, zero-day attacks are very difficult to prevent in the cyber kill chain. The cyber kill chain is a way to understand the sequence of events involved in an external attack on an organization’s IT environment. Understanding the cyber kill chain model is considered helpful in putting the strategies and technologies in place to “kill” or contain the attack at various stages and better protect the IT ecosystem. Following are the 7 steps in the cyber kill chain:

1. Reconnaissance: the intruder picks a target, researches it and looks for vulnerabilities
2. Weaponization: the intruder develops malware designed to exploit the vulnerability
3. Delivery: the intruder transmits the malware via a phishing email or another medium
4. Exploitation: the malware begins executing on the target system
5. Installation: the malware installs a backdoor or other ingress accessible to the attacker
6. Command and Control (C2): the intruder gains persistent access to the organization’s systems/network
7. Actions on Objective: the Intruder initiates end goal actions, such as data theft, data corruption or data destruction

Respondents were asked to rate the difficulty in preventing a zero-day attack in every phase of the cyber kill chain on a scale of 1 = not difficult to 10 = very difficult. Figure 16 presents the very difficult responses (7+ on the 10-point scale). The most difficult phase to prevent the zero-day attack is the command and control phase (80 percent) in which the intruder gains persistent access to the organization’s systems/network followed by the delivery phase of the kill chain (78 percent).

Read the full report by visiting Deep Instinct’s website

Alia “followed” me around through cyberspace during one day in Los Angels.

Bob Sullivan

Erin and her son Noah think they’ve finally found a safe place to live, in a quiet Ohio town, invisible to Erin’s abusive ex-husband.  But that life is shattered by a disturbing voice mail after a single photo of Noah accidentally appears on a school website. The call sends mother and child on the run again, but not before a near-disaster at Noah’s school.

Sometimes, privacy is a matter of life and death. And while Erin and Noah’s story is fiction, the story of how privacy advocate Brian Hofer ended up in a police car, with a gun pointed at his brother’s head, is chillingly real.

This week we begin this second season of No Place to Hide. You’re going to hear something very new, and very different: a combination of fiction and non-fiction storytelling. Each episode begins with a scene from the story of Erin and Noah, a mom and her son on the run from his abusive father.  The story is designed to make listeners feel the way victims feel when they are stalked through cyberspace. Then, Alia and I take on the big privacy topics of our day, concluding with a look at the world in 2030 if nothing is done to manage the coming tsunami of privacy invasive technologies.

No Place to Hide is sponsored by Intel Corp.

I’m really proud of this concept, and this series. Privacy isn’t some esoteric idea, or a first-world problem. Privacy is about freedom, and free will, and personal safety, and creativity.

This week’s episode is about location data, a topic that’s in the news a lot right now. Authoritarian regimes around the world are trying to stem the tide of coronavirus by tracking citizens’ movements via their cell phones. Well, every country is trying to do that. In places like China, there is no pretense of worry about civil liberties. In the U.S., Apple and Google have announced a system that uses Bluetooth to alert people who’ve been near a patient that’s tested positive. Theoretically, that limits the information to a small group who really needs it. Still, plenty of firms and governments are bragging about use of cell phone location data as a public health tool  — the state of New Mexico, for example, is using data to see how well residents are social distancing.   The data is being examined nationally, also.

Only a fool wouldn’t try all available tools to beat back coronavirus. But what are the long-term implications of these more aggressive steps by governments to track citizens via their cell phones? And how did we all end up with tracking devices in our pockets in the first place?

This week’s episode of No Place to Hide delves deep into the history of location data; I hope it will help inform public discussion as we move forward to the next step in this crisis, which is sure to include a lot of arm wrestling between the good technology can do and the potential harms.

Ep 4: On location Summary

Erin and Noah — Dad finds them in Ohio because an errant photo ended up on a school website. They have to drop everything and flee, right as their dad shows up at school.

Bob and Alia: Cell phones track our every move, in perhaps the biggest attack on privacy of our time. On location in Los Angeles, Bob and Alia discuss the past ten years of location-specific data hoarding by large companies. Then we hear why Oakland Privacy Commission chair Brian Hofer ended up in a police squad car, and his brother had a gun pointed to his head ‘executioner-style,’ all over a database error.

Partial transcript

BOB: A single piece of location information doesn’t seem that distressing. But when you can put it all on a map, over time, and build a picture of someone’s life, that’s when you’ve really, really invaded their privacy.

ALIA: You know, it kind of reminds me of this person I knew a long time ago, Bob. And I remember one day we were having coffee, and he was telling me about how, uh, assassinations worked. And I thought that was really creepy, but do you know what the first rule was to figure out how to assassinate someone? The rule was you get to know their habits, and you get to know their days, and you watch them. Where they go, how they get there, when they get there, every single day. Because if you know their habits, then you know where the holes are when you might do the deed.

BOB: …That’s what Liam Youens did to Amy Boyer…

ALIA: Yeah… that’s really scary. So what you’re talking about , in like learning someone’s habits– their daily whereabouts– you can look for opportunities to do something terrible potentially. And he was talking about it in like the old school sense of, you know, like stakeouts. You’re watching this person. And what you’re talking about is, basically, you don’t have to do that anymore, because Google does it for you.

BOB: And not just Google of course, any cellphone does this for you.

ALIA: Right. Ugh. 

BOB: Mobile devices are tracking devices, and so who has access to that information? Maybe through that Terms & Conditions box you checked? Your mobile provider.  Your apps. Hundreds of companies in between that are collecting these incredibly detailed profiles of your movements. You know, I recently wrote about a selfie app that teenagers love — it has 300 million downloads. And sends all their location information to the developer…in China.

ALIA: And there’s that NYTimes exposé on location data, that we’ve both been obsessed with. Someone gave the reporters at the Times a copy of a location database with a year’s worth of data.  Using that, they were able to track specific people, like a secret service agent, someone protecting the president, from their home to the White House to their church. And they had this location data for over 12 million people.

BOB: Just imagine what our fictional angry ex-husband from the opening could do with data like that.

ALIA: That’s so scary. 

BOB: When we talk about issues like privacy and data security, I get emotional and philosophical about civil liberties. And maybe you don’t care if Google knows what websites you visit or Amazon knows what kind of dog food you buy. But location data is next level. And as our little experiment showed, as the NYT story showed, something incredible happened in the past decade. The advent of smartphones means that most Americans, and about half the people on Earth, now carry small, incredibly accurate tracking devices with them at all times. And… I don’t remember anyone having a great, open, honest debate about the wisdom of that.

ALIA: Me neither. But I think we should.

{break}

BRIAN HOFER: Yeah, I, you know, I, I can’t get half of my friends to use like Signal or other encrypted software, or to, you know, have two factor authorization, cause you know, we’ll trade anything for convenience and speed. 

ALIA: That’s Brian Hofer. He’s a community activist in Oakland, California. We’ll hear a lot more about his activism later, but for now, he paints an amazing picture about the importance of location information.

BRIAN HOFER: It only takes four geospatial data points. So that’s time and location. Four different geospatial data points to identify over 95% of humans. Why? Cause I drive to work the same way, I drive to the gym the same way, I go to the same grocery store. We’re creatures of habit. So you know, whether it’s your scooter, uh, whether it’s even public transit that now mostly use like electronic payments, uh, obviously license plate readers, and obviously cell phones, you only need a couple of, you know, four or five data points and you, and your, you can map somebody out, you can figure out who it is.

The question usually is, Well, I have nothing to hide, so I have nothing to fear. And that, and that’s totally wrong. And I like how Edward Snowden, uh, flipped that on its head and said, you have something to protect. What if we just did have an abortion and there’s cameras right outside of that clinic and a license plate scanner, uh, and you’re tracking my phone calls, you know, to the clinic and my location? Or what if I keep driving and parking in front of the same cancer doctor’s office? Maybe I didn’t want to tell you I had cancer. Um, what if I am exploring my sexuality and there is facial recognition on the front of, uh, bars, you know, a same-sex bar that I wanted to walk into, but now I’m scared because there’s facial recognition. So all these little data points by themselves, probably not a civil Liberty threat, probably not, uh, invading my privacy, but together because of the nature of all the commingled data and databases together, what we now call it, and you’ve seen it in, uh, Sotomayor’s, uh, uh, some of her opinions, we call it the Mosaic Theory, that there’s all these little tiles, these little pieces…

BOB: So, Mosaic theory. This is really important.  It’s super creepy that in an instant, you could see everywhere I went all morning. But it should be even creepier to think that with just a few details, I could pretty much size up your whole life. I mean, imagine you are Erin and Noah, trying to get away from an angry ex husband. In just a moment, with data like this, he would know exactly when to show up at school to snatch a child. You see, most people’s lives aren’t really that complex. We only go to a few places 95% of the time. 

We talked Marc Groman about this — he was the first-ever chief privacy officer at the FTC and senior advisor for privacy in the Obama White House. 

MARC GROMAN – If you have my precise location over say a couple of weeks, you essentially can draw highly sensitive inferences about my entire life. You will understand my religious beliefs, my political beliefs, my health issues potentially. And by the way, it’s so precise now we know not just that you’re in the hospital, but if you’re in a 12 story building, we know what floor in the hospital

ALIA: Wow. 

ALIA:  Susan Grant of the Consumer Federation of America. We talked to her for a while about location data and I gotta say, when she talked about the creation of ‘megaprofiles’ I got chills.

SUSAN GRANT: Location is just one of the many, um, very revealing things about you that can be compiled into a mega profiles about you. So it’s not just where you are at any given moment, but it’s where you go most frequently.  Um, which can tell a lot about you. Um, you know, uh, uh, where you go to church reveals what your religion is, for instance. Um, these are things that people have a right to keep private if they want. Um, and uh, yet this information is being collected when it’s not needed

ALIA: Ok, this all sounds pretty awful. Tracking gadgets in our pockets and purses. Really precise data being sent to companies we work with, all around the world, available to the government…but I have to ask a question I know you love, Bob. So, Bob …who’s making money off all this location information?

BOB:  That’s always the important question to ask. And, we have to credit Buzzfeed for a great story explaining how valuable location information is.

BOB: “Location-sharing agreements between app developers and app brokers – where apps can send your GPS coordinates up to 14,000 times per day – can bring in a lot of revenue. With just 1,000 users, app developers can get $4/month. If they have 1 million active users, they can get $4,000/month. And that’s from just one broker. If they work with two app brokers with similar payouts, and have at least 10 million active monthly users, they could stand to make $80,000/month.”

BOB: Quote: “With more dangerous permissions given by the user, they will get more sensitive data, which means they’ll make more money.” End Quote. 

ALIA: So…that selfie app we talked about. It had 300 million downloads! OMG, how much money they must be making.

BOB: Exactly. But to me, it’s important to remember that big fish eat little fish metaphor from the first half of the series.

ALIA: Bob, I was waiting for a metaphor.

BOB: So a consumer group in Norway recently investigated dating apps like  Grindr, Tinder, OkCupid, and so on, and found they were selling sensitive data like location data into this ecosystem…but one of the buyers was a firm named MoPub. Which is owned by Twitter.

ALIA: Ahh Twitter. Because someone has to be writing those big checks, driving this whole ecosystem. And again, when did we decide as a society that we were ok with this? We didn’t. It just kind of…happened

BRIAN HOFER: And what is so scary, you know, back when we all read, like, 1984, we thought the government was just going to force everything on us–

ALIA: Here’s Brian Hofer again–

BRIAN: and what the American business genius was is nah, just ask people to do it voluntarily, you know, we’ll just offer them convenience and they’ll do all these things on their own and most people don’t look beneath the hood and don’t really look to see what the ramifications are.

Larry Ponemon

The Seventh Annual Study: Is Your Company Ready for a Big Data Breach? sponsored by Experian Data Breach Resolution and conducted by Ponemon Institute tracks the steps companies are taking, or not taking, to respond to a data breach. According to the findings, since 2017 significantly more organizations are having data breaches, highlighting the importance of being prepared.

This year, we surveyed 650 professionals in the United States 456 in EMEA[1]. A comparison of the US and EMEA findings are presented in Part 3 of this report. All respondents work in IT and IT security, compliance and privacy and are involved in data breach response plans in their organizations. In the context of this research, we define a data breach as the loss or theft of information assets, including intellectual property such as trade secrets, contact lists, business plans and source code. Data breaches happen for various reasons including human errors and system glitches. They also happen as a result of malicious attacks, hactivism or criminal attacks that seek to obtain valuable data, disrupt business operation or tarnish reputation.

Organizations are challenged to respond to the loss or theft of confidential business information and intellectual property. Sixty-seven percent of respondents say their organizations are most concerned about the loss or theft of intellectual property. However,  since 2017 the ability to respond to a data breach involving this type of information has not improved significantly. Organizations are better able to respond to breaches that require notification to victims and regulators.

In this year’s research, we introduced the following new topics:

• The maturity of organizations’ privacy and data protection program
• The frequency, consequences and preparedness to deal with spear phishing attacks
• The frequency, consequences and preparedness to deal with ransomware
• The impact of the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) on data breach preparedness

The following findings describe organizations’ abilities to respond to a big data breach

Investments in security technologies are increasing to improve the ability to determine and respond quickly to a data breach. More data breaches are occurring. As a result, 68 percent of respondents say their organizations have increased their investments in security technologies in order to be able to detect and respond quickly to a data breach.

C-suite executives are more knowledgeable than the board of directors about data breach preparedness plans. The C-suite’s knowledge about the data breach preparedness plans is much higher than the board of directors (55 percent of respondents vs. 40 percent of respondents).

Most training and awareness programs are conducted when employees are hired. Seventy-two percent of respondents have a privacy and training program for employees and other stakeholders who have access to sensitive or confidential information. Almost half (49 percent of respondents) say training is conducted during the on-boarding of new employees.

Cyber insurance coverage is focused on attacks by cyber criminals and malicious or criminal insiders. About half of respondents (49 percent) say their organizations have a data breach and cyber insurance policy. Of the 51 percent of respondents who currently do not have a cyber insurance policy, 58 percent will purchase one within the next two years. Eighty-three percent of respondents say it covers incidents caused by cyber criminals and 65 percent of respondents say it covers malicious or criminal insiders. Only 38 percent of respondents say it covers human error, one of the major causes of a data breach.

Since 2017, the coverage of identity protection services to victims has increased significantly. The top areas of coverage are legal defense costs and identity protection and notification costs to data breach victims. Seventy-two percent of respondents say identity protection services are covered, an increase from 64 percent in 2017.

The primary benefit of sharing information about data breach experiences and incident response plans is collaborating with peers. Fifty-seven percent of respondents currently or are planning to participate in a sharing program about data breaches and incident response plans. The primary benefit is that it fosters collaboration among peers and industry groups.

Effectiveness of data breach response plans continues to improve. Since 2017, more respondents say their data breach response plans are very or highly effective. An increase from 49 percent of respondents to 57 percent of respondents. However, 66 percent of respondents say their organizations have not reviewed or updated the plan since it was put in place or have not set a specific time to review and update the plan. Only 26 percent of respondents say it is reviewed annually.

The majority of organizations practice responding to a data breach. Seventy-five percent of respondents say they practice their ability to respond to a data breach. Of these, 45 percent of respondents say they do this twice per year.

More organizations are regularly reviewing physical security and access to confidential information. The primary steps being taken to prepare for a data breach are regular reviews of physical security and access to confidential information (73 percent of respondents) and conducting background checks on new full-time employees and vendors (69 percent of respondents).

Organizations are not confident in their ability to minimize reputational consequences and prevent the loss of customers. To prevent the loss of customers, 62 percent of respondents believe credit monitoring protection for victims is the best protection for consumers and the most effective in keeping customers. However, only 23 percent of respondents say their organization is confident in its ability to minimize the financial and reputational consequences of a material data breach and only 38 percent of respondents say they are effective at doing what needs to be done following a material data breach to prevent the loss of customers’ and business partners’ trust and confidence.

Spear phishing attacks are pervasive and confidence in dealing with them is declining. Sixty-nine percent of respondents had one or more spear phishing attacks and 67 percent of respondents say the negative consequences of these attacks was very significant or significant. Despite the frequency of these attacks, 50 percent of respondents do not train their employees to recognize and minimize spear phishing incidents. Since 2017, respondents who say their organizations are very confident or confident in their ability to deal with spear phishing attacks has declined from 31 percent to 23 percent.

Respondents are even less confident in their ability to deal with ransomware. Only 20 percent of respondents are very confident in their ability. Thirty-six percent of respondents say their organizations had a ransomware attack. The average ransom was $6,128 and 68 percent of respondents say it was paid.

More breaches are international or global in scope and only 34 percent of respondents say they are confident in their organizations’ ability to respond to these breaches. As discussed previously, 63 percent of respondents say their organization had a data breach in the past two years. Forty-five percent of respondents say one more of these breaches were global. Since 2017, respondents reporting that their incident response plan includes processes to manage an international data breach increased significantly from 54 percent to 64 percent. Fifty-seven percent say the plan is specific to each location it operates.

Now that the General Data Protection Regulation (GDPR) has been in effect for more than a year, organizations have improved their ability to comply with it. Fifty-four percent of respondents say they have a high or very high ability to comply with the regulation (an increase from 36 percent) and 50 percent of respondents have a high or very high effectiveness in complying with the data breach notification rules (an increase from 23 percent). Having the necessary security technologies in place to detect the occurrence of a data breach quickly is the number one reason for being effective.

CCPA results in organizations having to make comprehensive changes in business practices. Fifty-six percent of respondents say they are aware of the CCPA and of these respondents, 47 percent of respondents say they are subject to the Act. The top two challenges to compliance with the CCPA are similar to achieving compliance with the GDPR, which are the need to change business practices and not enough budget to hire additional staff.

Lessons learned from organizations with a mature privacy and data protection program

The report presents a special analysis on how the maturity of organizations’ privacy and data protection programs can affect data breach preparedness. Nineteen percent of respondents self-reported that their organization have a mature program, which means that activities are fully defined, maintained across the enterprise and measured with KPIs. In addition, C-level executives are regularly informed about the program’s effectiveness. The following findings are persuasive in showing how making the needed investments to achieve maturity will improve data breach preparedness.

• Mature privacy and data protection programs have fewer data breaches. Fifty-five percent of respondents in mature programs say their organizations had a data breach in the past two years. In contrast, a minimum of 60 percent of respondents in the other levels of maturity report having a data breach.
• Mature programs are more adept at preventing negative public opinion and media coverage. Fifty-five percent of respondents say they are effective in managing the risk of negative opinions and media coverage following a material data breach. In contrast, only 37 percent of respondents in programs that are in the middle stage say they are effective.
• More mature programs represented in this study are increasing investments in security technologies to be able to detect and respond quickly to a data breach.
• Mature programs are more likely to participate in sharing information about their data breach and incident response experiences with government and industry peers.
• Mature programs are better prepared to manage an international data breach. Seventy-one percent of respondents in mature programs say their incident response plan includes processes to manage an international data breach.

 For the full results, visit Experian’s website 

Bob Sullivan

Since the 1973 oil embargo, and the nearly concurrent coining of the term “gridlock,” Americans have mused about telecommuting as the solution to many modern ills. When high-speed Internet began making its way into homes in the late 1990s, telecommuting seemed on the verge of a breakout. Why waste time in traffic jams when email can get to your home office just as quickly?  The promise of returning 10 or so hours each week to workers — not to mention dramatic potential savings in office rental costs — sounded irresistible.

Instead, managers seemed too attached to the physical presence of their employees, and some employees wondered if their stay-at-home co-workers were really getting much done in their jammies.  A bit of a backlash emerged after the turn of the century, reaching its apex when Yahoo CEO Marissa Meyer effectively killed that company’s work from home program.

So much for leaving rush-hour traffic behind.

Today, a scant 3 percent of Americans telecommute most of the time, according to FlexJobs. That means just about as many Americans will suffer through daily “extreme commutes” — lasting more than 90 minutes, each way — as will take advantage of full-time telecommuting.

The Coronavirus might finally change that.

In reaction to the outbreak’s foothold in Seattle, big tech companies in the Pacific Northwest have quickly adopted telecommuting plans.  Microsoft, Amazon, Facebook, and Google have all told employees to work from home whenever possible, and to stay there for most of March.  So has King County, the local government in the Seattle area.  Fred Hutchinson Cancer Research Center told many of its employees they have no choice — they must work at home.

Early 2020 might turn into a forced social experiment that could finally answer the question: Do we need rush hour any more?

“While about 50% of people work from home at least half the week on a regular basis, we still see that only about 3-4% work from home full-time. Now, because of the coronavirus, we’re seeing a real focus on remote work that may very well be a tipping point in terms of wider-spread adoption of full-time remote work,” said Brie Weiler Reynolds, Career Development Manager and Coach at FlexJobs. “It seems that, in this latest situation, companies have more easily jumped to remote work as one big solution to keep employees safe, maintain continuity of operations, and handle the uncertainty day by day.”

Of course, not everyone can work from home. Bus drivers and security workers, for example, must remain at their posts. The Seattle Times has an important story about this newly and rapidly forming digital divide.  That group cannot be ignored in this social experiment.

But it’s hard not to imagine Seattle companies might get used to all those empty desks, not to mention emptier highways, and with new work patterns in place, find a way to continue their ad-hoc work-from home arrangements long-term. It’s a stretch to look for silver linings in today’s climate, but climate researchers have found one when looking at China. Air pollution has plummeted there during the crisis.   It’s easy to imagine that kind of unintended consequence in Seattle as well, as thousands of cars are taken off the road and gridlock is reduced.

Widespread adoption of telecommuting holds out big promises, FlexJobs says: 124 billion fewer car miles driven annually, 8 billion fewer trips, an $8 billion reduction in auto accident costs, 54 million tons less greenhouse gas emissions.

While most companies are sensibly making only short-term plans right now, Weiler expects virus-related work-from-home arrangements will probably last well past the end of March.

“Because the virus’s threat is ongoing and it’s hard to predict how long things may stay this way, we may see companies using remote work daily for the coming weeks or months, and realizing that it’s actually a productive, effective way to work over a long term basis,” she said.

Larry Ponemon

The Ponemon Institute is pleased to present the findings of Data Protection and Privacy Compliance in the Cloud, sponsored by Microsoft. The purpose of this research is to better understand how organizations undergo digital transformation while wrestling with the organizational impact of complying with such significant privacy regulations as the GDPR. This research explored the reasons organizations are migrating to the cloud, the security and privacy challenges they encounter in the cloud, and the steps they have taken to protect sensitive data and achieve compliance.

The Ponemon research qualified 1,049 IT and IT security participants from the United States and the European Union (EU). All of them were familiar with their organization’s approach to privacy and data protection compliance and responsibility for ensuring that personal data is protected in  the cloud environment. Fifty five percent of respondents operate a cloud infrastructure with one primary cloud service provider; 45 percent operate in multiple or hybrid cloud environments.

Privacy concerns are not slowing the adoption of cloud services. The importance of the cloud in
reducing costs and speeding time to market seem to override privacy concerns. Only one-third of US respondents and 38 percent of EU respondents say they have stopped or slowed their adoption of cloud services because of privacy concerns,

Most privacy-related activities are easier to deploy in the cloud. These include such governance practices as conducting privacy impact assessments, classifying or tagging personal data for sensitivity or confidentiality, and meeting legal obligations, such as those of the GDPR. However, managing incident response is considered easier to deploy on premises than in the cloud.

However, most organizations lack confidence in, visibility into, and a clear delineation
of responsibility for managing privacy in the cloud.

• Despite the anticipated increase in the importance of the cloud in meeting privacy and data protection objectives, 53 percent of US and 60 percent of EU respondents are not confident that their organization currently meets their privacy and data protection requirements. This lack of confidence may be because most organizations are not vetting cloud-based software for privacy and data security requirements prior to deployment.
  • Organizations are reactive and not proactive in protecting sensitive data in the cloud. Specifically, just 44 percent of respondents are vetting cloud-based software or platforms for privacy and data security risks, and only 39 percent are identifying information that is too sensitive to be stored in the cloud.
  • Just 29 percent of respondents say their organizations have the necessary 360-degree visibility into the sensitive or confidential data collected, processed, and/or stored in the cloud. Organizations also lack confidence that they know all the cloud applications and platforms that they have deployed.
  • In most organizations, the IT security and compliance teams are not responsible for ensuring
  security safeguards and compliance with privacy and data protection regulations. Thirty six percent of respondents expect the cloud service provider to ensure the security of SaaS applications. In contrast, 46 percent of respondents say the organization is responsible. Further, privacy and data protection teams are rarely involved in evaluating cloud applications or platforms when they are under consideration. Almost half of respondents (49 percent) rarely or never determine if certain cloud applications or platforms meet data protection and privacy requirement.

Part 1: Privacy concerns are not slowing migration to the cloud, but organizations struggle to ensure the protection of data

Cloud services or platforms are used to achieve faster deployment and reduce costs.
The top two reasons for using cloud services and platforms are faster deployment
time and lower costs.

Cost savings, scalability, and faster time to market are the top reasons for migrating
to the cloud — 67 percent of respondents agree that migration results in cost savings and 64 percent of respondents agree that it enables scalability and faster time to market. More than half (54 percent) of the respondents believe migration will improve security and privacy protections.

There is no consensus about who is responsible for addressing privacy and data
protection requirements. Respondents were asked who in their organization would be most responsible for ensuring that SaaS and PaaS applications meet privacy and data protection requirements. Some assigned this responsibility to the cloud service provider; some state that the company and the cloud service provider share the responsibility; others allocate the responsibility within the company among end users and IT.

The importance of both SaaS and PaaS in meeting privacy and data protection
objectives will increase significantly —  64 percent of respondents say that deploying SaaS will be essential or very important in meeting privacy and data protection objectives over the next two years. Fifty-three percent of respondents say using PaaS will be essential or very important.

Respondents are not confident that their current use of SaaS and PaaS meets privacy
and data protection requirements. Currently the majority of respondents are not confident that their SaaS applications and PaaS resources meet privacy and data protection requirements. More respondents (60 percent) lack confidence in the privacy and data protection capabilities of PaaS.

Confidence in SaaS and PaaS applications is low because most organizations are not
vetting them for privacy and data security requirements prior to deployment.
As discussed previously, there is a lack of confidence in the ability of SaaS and PaaS applications to protect and secure data. Why? Fifty percent of respondents say their organizations are not
vetting their SaaS applications before deployment and 58 percent say PaaS resources are not being vetted.

To read the rest of this study, visit Microsoft’s website.

Bob Sullivan

When the Center for Facial Restoration announced it had been hit by ransomware recently, the hack attack might have sounded like just another expensive cyber incident for a small business. But the hack of the rhinoplasty practice near Miami included another, darker threat. The criminals added another potential revenue stream to their enterprise — extorting patients by threatening release of potentially embarrassing photos.

So in addition to worrying about restoring data that had been encrypted with malware, Dr. Richard E. Davis had to worry about the publication of before and after photos that might humiliate patients.

This dual threat — criminal hackers stealing data before they scramble it with ransomware — parallels the recent global incident involving currency exchange company Travelex.  It’s a disturbing new trend among computer criminal gangs.

When the Center for Facial Restoration announced on its website recently that it had been hit by ransomware, the firm’s website had to add this chilling warning.

“(Hackers) demanded a ransom negotiation, and as of November 29, 2019, about 15-20 patients have since contacted (the firm) to report individual ransom demands from the attackers threatening the public release of their photos and personal information unless unspecified ransom demands are negotiated and met,” the warning said, “I filed a formal complaint with the FBI Cyber Crimes Center and two days later met with the FBI where they recorded detailed information regarding the cyberattack and ransom demands. The investigation is currently ongoing.”

It’s easy to imagine the seriousness of that kind of threat. On its website, the center says it specializes in repairing other rhinoplasty — or “nose job” — surgeries that left patients unsatisfied.

“Do you avoid cameras or social situations? Let cosmetic rhinoplasty restore your self confidence with a natural-looking, attractive nose that suits your face,” the website says. “Get ready to look at the camera and smile.”

The firm has not immediately responded for comment, so it’s unclear if more patients have been threatened with extortion. But Davis told HealthITSecurity.com that he hopes the damage was limited by recent security upgrades.

“While upgrading my defenses clearly won’t help those individuals whose data has already been stolen, there is reason to suspect that the theft of patient photographs may be limited to only a very small number of individuals – mostly those patients who used email to send or receive their photographs – so the upgrades may prove useful,” Davis said.

But the trend has security professionals worried.

“At least one other ransomware group is also routinely stealing data prior to encrypting it: Maze,” said Brett Callow, a threat analyst who studies ransomware for security firm Emsisoft. “This is a recent and concerning development, especially given how susceptible the public and private sectors seem to be ransomware attacks.”

The double-whammy of ransomware and data breach can leave victim firms scrambling to respond.

“An organization whose data is stolen has no good options available,” Callow said. “Refusal to pay will probably result in the data being published; payment will get them a pinky promise that the data will be deleted. And, as that pinky promise is being made by a criminal enterprise, it carries very little weight.”

Emisoft’s 2019 report about ransomware victims found that nearly 1,000 government agencies, non-profits, and medical organizations were victims of such criminal attacks last year — and there no indication the attacks are slowing down. The dual threat gives small organizations something else to worry about.

“I am dismayed to report (our office)… was the victim of a criminal cyberattack,” Davis says on his website.  “I deeply regret that individuals currently or formally under my care have been victimized by this criminal act, and I urge you to monitor your financial information closely. … . I am sickened by this unlawful and self-serving intrusion, and I am truly very sorry for your involvement in this senseless and malicious act.”

Larry Ponemon

While all industries must ensure appropriate data protection safeguards are in place, the financial services industry must be especially vigilant for a variety of reasons. These include the value of the data to attackers, the need to comply with difficult regulations and prevent costly fines and the importance of maintaining the trust and confidence of consumers. The purpose of this research is to understand the threats to financial technology and software and steps taken to minimize the risks.

Sponsored by Synopsys, Ponemon Institute surveyed 414 IT and IT security practitioners in all sectors of the financial services industry including banking, insurance, mortgage lending/processing and brokerage.

All participants in this research are involved in assessing the security of financial applications within their organizations. Their roles include installation and implementation of financial applications, development and manufacture of financial applications, provider of services to the financial industry.

(Visit Synopsys for the full study; the results are summarized here.)

Financial service companies worry about the third-party risk. We asked respondents to rate their concern about the cybersecurity posture of financial software systems developed by their organization or supplied by a third party from a scale of 1 = not concerned to 10 = very concerned. Figure 1 shows the most concerned responses (7+ on the ten-point scale).

According to respondents, 74 percent of respondents are very concerned about the security of financial software and systems supplied by a third party. However, only 43 percent of respondents require contractors, business parties and other third parties to adhere to their cybersecurity requirements. Fewer respondents (62 percent) are very concerned about the financial software and systems developed by their organizations.

Part 2. Key findings

In this section, we provide a deeper dive into the findings of the research. The complete audited findings are presented in the Appendix of the report. We have organized the research into the following topics.

• The cybersecurity posture of financial services companies
• Risks to financial software and applications
• Security practices in the design and development of financial service software and technologies

The cybersecurity posture of financial services companies

Most companies are effective in detecting and containing cyberattacks. Respondents were asked to rate their effectiveness in preventing, detecting and containing cyberattack from a scale of 1 = ineffective to 10 = very effective. The majority of respondents are confident in their effectiveness in detecting (56%) and containing (53%) attacks but less so in preventing an attack (only 31%).

Most organizations have a cybersecurity program or team. Sixty-seven percent of respondents say their organizations have a cybersecurity program or team. Some  60 percent of respondents say cybersecurity is part of the traditional IT cybersecurity team and more than half (51 percent of respondents) say the cybersecurity team is decentralized, with cybersecurity experts attached to specific product development teams. Only 23 percent of respondents say cybersecurity is the responsibility of product development.

Pen testing and dynamic security testing/DAST are considered the most effective in reducing cybersecurity risks. Some 65 percent of respondents say pen testing and 63 percent of respondents say dynamic security testing/DAST are the most effective activities in reducing cybersecurity risks. Also effective are security patch management, system debugging and threat modeling.

Organizations need more resources and in-house expertise to mitigate cybersecurity risks. Only 45 percent of respondents say they have adequate budget to address cybersecurity risks and only 38 percent of respondents say their organizations have the necessary cybersecurity skills.

Respondents are more concerned about the cybersecurity posture of the financial services industry than the difficulty in complying with regulations. Respondents were asked to indicate their concern about cybersecurity risks on a scale of 1 = no concern to 10 = very concerned. Some 65 percent of respondents are very concerned about the cybersecurity posture of the financial services industry. Despite new regulations, such as NYDFS, 61 percent of respondents say regulatory requirements in the financial services industry are not keeping pace with changing financial technologies.

Risks to financial software and applications

Cloud migration tools pose the greatest cybersecurity risk. Of the software and technologies that pose the greatest cybersecurity risk to financial services companies, 60 percent of respondents say cloud migration tools followed by blockchain tools (52 percent of respondents) create the greatest risk.

The threat of malicious actors is motivating companies to apply cybersecurity-related controls in financial software and technologies.  Some 84 percent of respondents say their organizations are very concerned (7+ on a scale of 1 = not concerned to 10 = very concerned) that a malicious actor may target the financial software and technology developed by or used by their organizations. As a result, 83 percent of respondents say there is a very high urgency (7+ on a scale of 1 = low urgency to 10 = high urgency) to apply cybersecurity-related controls in financial software and systems. Only 25 percent of respondents are confident that security vulnerabilities in financial software and systems can be detected before going to market (7+ on a scale of 1 = not confident to 10 = very confident).

To read the rest of the results, and more comprehensive analysis, visit the Synopsys website.

Click to read the report (in English)

Bob Sullivan

Earlier this week, Bernie Sanders told The New York Times that he had no apps on his smartphone, citing a semi-anonymous but militant cybersecurity staffer named “Melissa” who keeps him safe.  There’s fresh evidence this week that we should all listen to Melissa.

Two separate studies have found that seemingly harmless beauty and dating apps are repeatedly violating users’ privacy, sharing intimate details of their lives — including granular location data — with a vast network of commercial firms looking to exploit it.

As I’ve mentioned in our So, Bob podcast “No Place to Hide,” the privacy-violating arena exists because of a “big fish eat little fish” ecosystem. The big money for surveillance capitalism — AdTech — wouldn’t exist if large companies didn’t support it. Here, you’ll see how it works.

The first report, published by a Norweigian government consumer agency, alleges that the makers of Grindr, Tinder, OkCupid, and several other similar apps packages up user data and sells it to third-party advertisers without user consent or knowledge, a violation of European privacy laws. The report, titled Out of Control, claims “a large number of shadowy entities that are virtually unknown to consumers are receiving personal data about our interests, habits, and behavior.” The 10 apps studied sent data to at least 135 companies, the report found.

For example: “The dating app Grindr shared detailed user data with a large number of third parties that are involved in advertising and profiling. This data included IP address, Advertising ID, GPS location, age, and gender,” the report says. “Twitter’s adtech subsidiary MoPub was used as a mediator for much of this data sharing, and was observed passing personal data to a number of other advertising third parties including the major adtech companies AppNexus and OpenX. Many of these third parties reserve the right to share the data they collect with a very large number of partners.”

The report also studied a makeup app named Perfect360, accusing it of sharing GPS and other data with at least 70 partners.

A separate study, published by a new Lithuanian-based security news site named Cybernews.com, focused entirely on makeup and selfie enhancement apps and found similarly troubling results.

The so-called beauty app category is immensely popular, especially with young women and girls — individual apps boast of as many as 300 million downloads. Cybernews found many of the apps request permissions they don’t need to perform the simple task of fine-tuning selfies.  Among the findings, according to Cybernews:

● Three seemingly separate developers seem to be run by the same group, and may be connected to apps previously found to contain a widely-dispersed Trojan
● One app developer was found to install malware through its software
● Unnecessary permissions include recording audio, using GPS, and seeing users’ phone statuses
● While only a few permissions are required for the app function, one app includes a whopping 40 total permissions
● More than half (16) of these apps are based in Hong Kong or China

In other words, Chinese app developers know an awful lot about the whereabouts of many teen-age Western girls.

“So why does a beauty and filter camera app needs to record audio, track your GPS location, or read through your contacts list? The apps may be free, but they are selling your data and the more they know about you, the more valuable your details become,” the report says. It sites a Buzzfeed article claiming that app makers can earn $4 a month for every 1,000 app users from tracking companies looking for location data. “If they have 1 million active users, they can get $4,000 a month.”

U.S. consumer groups reacted strongly to the report out of Norway; a coalition of nine urged the Federal Trade Commission to open an investigation on Monday.

 “The illuminating report by our EU ally the Norwegian Consumer Council highlights just how impossible it is for consumers to have any meaningful control over how apps and advertising technology players track and profile them,” said Susan Grant, Director of Consumer Protection and Privacy, Consumer Federation of America. “That’s why Consumer Action is pressing for comprehensive U.S. federal privacy legislation and subsequent strong enforcement efforts. Enough is enough already! Congress must protect us from ever-encroaching privacy intrusions.”

The coalition also asked attorneys general in California, Texas, and Oregon to investigate.