Incident Response, E-Discovery: Crucial for Finance Industry Security and Compliance Planning

Anthony Di Bello A security breach, or fraudster acting from the inside, is expensive for any organization to endure - but such incidents are especially expensive for the heavily regulated financial services industry. 

In addition to direct monetary losses from an incident, breaches also create a significant hit to the trust an institution enjoys. That lost trust causes customers to leave, and creates a loss in confidence among partners and even regulators. The resulting customer churn is expensive, as is the loss of confidence among regulators which can result in more aggressive audits. It’s just human nature to look more closely following a security incident. And then there’s the higher cost of business insurance that follows a breach. 

While they’re naturally targets among cyber-thieves, financial services firms are also very heavily regulated. Now, that’s no secret but it helps to highlight why, in addition to mitigating the damage of attacks, financial services firms should make sure they have solid incident response and e-discovery capabilities in place. These capabilities - properly integrated with IT, IT security, risk management, legal, HR, and business executives - should be on the ready to respond to potential cases of system abuse, fraudulent transactions, unauthorized, or repeated, access attempts to systems and applications, and incidents involving customer financial data.

What many people overlook is that there are quite a few regulations that require these capabilities be in place. And if they don’t require it directly, their mandates make them essential.

For instance, the Payment Card Industry Data Security Standard (PCI DSS) is often overlooked when it comes to e-discovery and incident response. However, as is pointed out in this Information Law Group post, while PCI DSS doesn't directly require an incident response capability, it certainly does through the resulting requirements that are set, and now commonplace, among merchants and their payment processors:

In reality, however, a merchant's true obligations in a security breach situation are dictated by the merchant agreement it has with a payment processor or acquiring bank.  Most modern merchant agreements will require the merchant to comply with the operating regulations and security programs of the relevant card brands.  However, these contracts may also have additional duties relating to incident response, including different reporting requirements, audit rights and indemnification obligations. 

If you are accepting a certain volume of credit card payments chances are you are contractually required to have adequate incident response capabilities in place.

Same is true if you are a public company, the Sarbanes-Oxley Act of 2002 requires companies have the ability to prevent, and detect fraud, as outlined in this this FindLaw article:

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the [company's] assets that could have a material effect on the financial statements.[9]

Section 302 also specifically identifies internal fraud as an event that would require disclosure by senior management. Put simply, an adequate internal control structure must include "controls related to the prevention, identification and detection of fraud."

It’s not just those two, albeit rather substantial, regulations that require financial services firms’ and others to have effective incident response and e-discovery capabilities in place. There’s also the FTC’s Red Flag Rules designed to identify and fight identity theft, as well as the Gramm-Leach-Bliley Act ‘s Notification Rule.

Each of these regulations, as well as numerous others, make incident response and e-discovery capabilities essential. In fact, there isn’t a financial services firm that doesn’t need to be able to quickly find and provide documents necessary for GLBA or Red Flag rule compliance for incidents involving privacy or potentially even fraud.

Of course, all of this is easier written in a blog post than done. Like many things in life, success requires the right combination of technology, people, and practice. We believe Guidance Software provides the right technology for both e-discovery and incident response, so all you need to do is make an incident response plan, put in in place, and test and practice - this way when something unexpected occurs you’ll be ready. 

Sensitive data discovery is an essential part of IT security

Anthony Di Bello

Yet, most organizations don’t give it the attention it deserves. Here’s why it’s hard, and what you can do to do it right.

When we talk about protecting enterprises from attack, we are really talking about protecting our data. After all, it is the data that is so heavily regulated. It’s data - when comprised - that causes breach notifications. And it’s that valuable data that one ultimately doesn't want to fall into the wrong hands.

So it’s surprising why so few companies - companies that spend so much capital and effort on security technologies to defend their networks - actually seek to know where their sensitive, confidential, and regulated data reside. Perhaps it’s because they don’t see the real value in doing so. Perhaps it’s because the process has proven to be insurmountable at some point in the past. Regardless of the reason: it’s a serious oversight.

Why? First consider the benefits of understanding sensitive data location. Understanding and controlling the location of sensitive data can help to significantly reduce risk as that data can be consolidated into fewer data stores as it’s identified. It can also help streamline data leak prevention deployments, help with litigation readiness, (for data disclosure requests) and can improve data retention policies. So why isn't it being done?

Part of the challenge is that auditing endpoint data, without the right tools, isn't ;easy. First, many of the tools require that endpoint data be fully indexed before it can be searched. That’s just ludicrous today, as the process will take weeks, if not a month or more to complete. With the velocity at which data moves today, the locations and nature of the data will change before the indexing process is even completed. Not to mention that much of the data will be on highly-mobile notebooks. Additionally, unstructured data is a big challenge for most tools. This includes finding data in emails, attachments, and local files.

Also, policies alone, without technological enforcement, isn’t enough. Users will always find a way to bypass policies that aren’t monitored and enforced either accidentally or intentionally. So sensitive data discovery technology should also provide remediation: it’s the only way to deliver critical enforcement capabilities to ensure sensitive data is not anywhere against your data policies.

Despite these difficulties, endpoint data classification is something that must be done. Not only because having sensitive data scattered about significantly increases risk exposure, as well as the costs associated with eDiscovery requests - but it’s also a requirement among many regulations. Some of those include Nevada’s Security of Personal Information Law (NRS 603.A), the Health Insurance Portability and Accountability Act (HIPAA), and the Payment Card Industry Data Security Standard (PCI DSS).

For these regulations, and for un-regulated confidential data, the ability to discover sensitive data on endpoints is crucial for reducing the risk and costs of incidents, remaining compliant, and enforcing policies to avoid mishaps and regulatory findings. When looking for a solution, there are certain requirements you need consider:

• Broad Encryption support
• Broad OS support
• Ease and Flexibility of deployment and configuration
• Forensic-grade visibility
• Review capability
• Policy enforcement mechanism
• Integration with other systems

EnCase Cybersecurity enables organizations to find sensitive intellectual property, personally identifiable information, and classified data on endpoints. Also, with disk-level and volatile RAM search ability, EnCase Cybersecurity can target and locate sensitive data wherever it is stored - even if it has already been deleted. Additionally, organizations can target data based on self-defined and pre-defined criteria. Then, when critical data is found in unauthorized areas, the data can be collected to a central repository if needed and then removed in such a way as to be unrecoverable. This way risk is not only instantly reduced, but policy is also continuously enforced going forward as employees will know that endpoint data policy violations will be identified, and won’t be tolerated.

There’s no doubt that endpoint data identification and auditing will be a challenge for some time to come. If you’d like to learn more, you’re invited to watch the on-demand webinar Dude, Where’s My Data – Finding & Securing Sensitive Data, which provides more detail on the challenges of endpoint data auditing and identification, and how EnCase Cybersecurity will help.