Compliance Is Wasted Money, Study Finds

Trailrunner7 writes "Enterprises are spending huge amounts of money on compliance programs related to PCI-DSS, HIPAA and other regulations, but those funds may be misdirected in light of the priorities of most information security programs, a new study has found. A paper by Forrester Research, commissioned by Microsoft and RSA, the security division of EMC, found that even though corporate intellectual property comprises 62 percent of a given company's data assets, most of the focus of their security programs is on compliance with various regulations. The study found that enterprise security managers know what their companies' true data assets are, but find that their security programs are driven mainly by compliance, rather than protection (PDF)."

Comments

Naturally...

[russotto]

Screw up with your customers data, and the worst that happens is you get a PR black eye, or you lose money. Don't follow regulations and unless you've got a Congressman in your pocket, you can go to jail.

Re:Naturally...

[MillionthMonkey]

And people wonders why so few startups are going on that may produce new jobs.

I've been to several startups in the past year that exist solely for compliance purposes. They'll have only a few customers, all large corporations. Typically they'll come up with some little scheme like building physical "appliances" that clients plug in to their internal network and voila all this stupid traffic is being logged and kept on record and emails are flying out to customers a mile a minute. On average these outfits hire a couple dozen people. Very dull jobs but they pay well.

Re:Naturally...

[Anonymous Coward]

Posting anonymously for semi-obvious reasons....

I work for a Fortune 200 firm. We have branches in all 50 states (and many countries as well, but I'm in the US division.)

Every locality - city, state, whatever - has its own little set of laws. Some of the tax laws are very complex. Our software can't handle all of them.

So every one that comes up, one of the questions that go into the decision making is this: How big is the fine if we don't?

If the defined fine is less than it will cost to implement the change, sometimes we let it go and figure we'll pay the fine if we're caught.

On the other hand, it's absolutely true that compliance gets a higher emphasis and a higher visibility than actual security. We're redoing our credit card processing at the moment, and although the new implementation meets the PCI-DSS regulations better than the old one (in other words, it does) it also has a much larger potential for major data loss.

The old architecture was totally decentralized. You would have to compromise each of our locations to get their credit card data.

The new one is centralized. Compromise one server and you've got it all.

Re:Naturally...

[Ritchie70]

PCI-DSS isn't government, though. It's supposedly an "industry coalition" but what it really is, mostly, is Visa.

If anything goes wrong, the merchant involved can be found to be in violation - everyone is in violation if you look hard enough - so it's the merchant's fault.

I read an article somewhere that said merchants should just find the cheapest, least competent auditor they can, and get them to declare the merchant PCI-DSS compliant, then do what you think is right to be secure.

Anything else is just wasted money - because if there's a breach, by definition, you were insecure, and therefore not PCI-DSS compliant.

So get the paper, then make yourself as secure as you possibly can, ignoring the BS from the auditors who don't really understand your environment.

I"m not saying I 100% agree, but it is an interesting argument.

Re:Naturally...

[EvolutionsPeak]

If that isn't an instance of the Broken Window Fallacy I don't know what is.

Process/Objective Inversion

[Citizen of Earth]

The purpose of the 'process' is to serve the 'objective'. When serving the process becomes the objective, you're boned.

Re:Process/Objective Inversion

[Daniel Dvorkin]

There are two different objectives here, with (at least) two different processes. The first of these objectives is securing corporate assets. The second is securing sensitive individual information about people with whom the corporation does business. Security processes should ideally serve both objectives, but if that's impossible, then one process (or set of processes) has to be given prioroty over the other. As a customer of, say, Amex or Cigna, I care a whole hell of a lot more about the second objective than the first, so it doesn't displease me at all that the processes related to that objective are well-funded.

Well...

[Pojut]

...considering we are a pharmaceutical call center, we pretty much have to invest heavily in HIPAA security.

Re:Well...

[Rophuine]

...considering we are a pharmaceutical call center, we pretty much have to invest heavily in HIPAA security.

No, and that's the point of TFA. You have to invest heavily in HIPAA compliance. I worked in banking for years, and got a pretty good picture of why it happens this way.

Here's how it was before compliance:
[Some random CIO guy] thinks we need X level of security, and that's what we get. But it turns out [SRCIOG] isn't too good at working out how much security we need, so we get hacked and lots of [patients/customers/federal agents] lose all of their [medical records/money/lives]. We fire [SRCIOG] and hire [SRCIOG2], but it turns out we have the same problem.

Compliance solves the arbitrary nature of the security level we aim at. We're now all aiming at Z, but the problem is [SRCIOG27] still doesn't really know what he's doing, and there's still budget pressure and he still doesn't think we REALLY need all that security because hackers happen to OTHER CIOs. So he looks at Z, and says "How can we meet each objective of Z in the cheapest and least intrusive fashion? After all, we have products to build, and research to do, and this compliance Z target is so expensive and annoying and FOR CRYING OUT LOUD DON'T TELL THE AUDITOR ABOUT THE OFFSITE BACKUP SYSTEM!!!?!"

So yes, people focus on compliance and spend lots of money to get minimal security: it's a bad solution, but it's better than just letting them set their own (often much lower) standards. Some organisations will get it right, spend the resources appropriately, and end up with a compliance solution which provides real benefits and isn't costly to maintain. The pack, by and large, spend the minimum possible up front, and keep spending and spending and spending every year in order to convince the auditors they're "making good progress".

Ultimately, compliance doesn't give us security. It gives us a big stick to beat people with when they blatantly ignore security.

Re:Well...

[RMH101]

I spent 10 years in pharma IT. Compliance gives you, as the IT tech guy, a stick to hit the bean counters with to justify your security. You have serious licence-to-operative FDA tigers growling at you, and it's no longer acceptable to not bother with some reasonable baseline of security and repeatability - ComVal. If you need to spend a small fortune on fixing a security problem, you'll get it if you phrase your request in terms of compliance.

wasted?

[Lord Ender]

If you aren't compliant, you won't be able to sell certain services or take on certain customers. Being compliant is certainly not a waste from a business standpoint.

Re:wasted?

[CrimsonAvenger]

If you aren't compliant, you won't be able to sell certain services or take on certain customers. Being compliant is certainly not a waste from a business standpoint.

Note that if the Feds required that all of your marketing department drive Rolls-Royces, then what you said would still be true.

It would even be true if the Feds required that any software guy had to wear a clown suit to work.

Neither of these things is at all relevant to your business, however. And the point of the article is that much of the (unnecessary) compliance requirements of various Federal laws are about as important as my two examples.

Re:wasted?

[Jah-Wren Ryel]

FWIW - PCI-DSS is a requirement of Visa, Mastercard, et al. Not the feds.
It is an acronym for "Payment Card Industry Data Security Standard."

Re:wasted?

[Lunix Nutcase]

So you think that the feds requiring people to protect your health records, for example, is a waste? Would you really rather go back to a time when the same companies didn't care? Sure these compliance laws are usually flawed in many ways, but since this holds the companies accountable for a minimum of data security at least they will do something whereas they would normally do nothing.

Re:wasted?

[Jer]

The title of the Slashdot summary is unsurprisingly misleading and inflammatory. Reading TFA it doesn't suggest that money going into compliance is "wasted" - it suggests that companies aren't spending enough money to protect their own IP from corporate thieves.

IOW - the article suggests that companies are spending the same amount of money to protect so-called "custodial" data (i.e. information they've collected about their employees and customers that are protected by HIPAA and other statutes) and their own IP. But the financial losses from losing their own IP are substantially higher than the losses they'll incur through leakage of "custodial" data, so they actually should be spending more money protecting custodial data than they spend on protecting custodial data.

The underlying assumption in the article is that, unless you've implemented your compliance stupidly, you actually can't fix this disparity by spending less money. You can't cut your budget on compliance because it's required by statute. So instead you should be spending more money on protecting IP assets so that the ratios more realistically reflect the importance of the data being protected. Money that Microsoft and RSA, the funders of the study, are happy to take to help you implement solutions to protect your oh-so-valuable IP assets.

Re:wasted?

[Jah-Wren Ryel]

Would you really rather go back to a time when the same companies didn't care?

I think I would because I would like to see the follow-on effects. I believe that most of HIPPA is smoke & mirrors, that violations are rampant and the requirements full of loopholes thus it gives a false sense of security to the public. I would rather the public be made acutely aware of the risks and that instead of just trusting that the law will protect the public, that we start relying on other mechanisms, like minimizing the data we give to health care companies and allow them to keep. It's a lot simpler to avoid disclosing data you don't have than it is to build up a wall of fallible procedures around the data instead.

Re:wasted?

[Gerzel]

Neither is having a good fire escape strictly relevant to manufacturing shirt-waists, but it is still necessary for a good reason.

You have to look at why the compliance regulations are there and not if the regulations themselves have anything to do with the business.

The process is part of the goal in order to make sure things get done and done correctly. While yes many can indeed do things correctly outside of the process and many more might be able to muddle through the process is a form of insurance paid in extra time and labor to make sure things get done right.

Re:wasted?

[peragrin]

And that is why your delusions is worse. without HIPPA companies weren't held responsible because it was always some other companies fault. Every company could plead it wasn't us because there was no way to track who was actually responsible.

There is a reason greed is a deadly sin among some religions. Let's try this another way. dec. of 2006 Circuit city BOD executives noticing a small drop in sales and in need of their bonus checks, fired their top 3000 sales earners. the top 3000 who the company paid the most in salary that weren't managers. But who also accounted for the majority of their sales. They paid themselves tens of millions of dollars in bonuses. By July 2007 Sales were a third of what they should be and by dec. 2007 most stores were closing up as the whole company was bankrupt.

That same kind of executive thinking is found in the majority of CEO's. read http://money.cnn.com/galleries/2010/news/1004/gallery.top_ceo_pay/index.html?source=cnn_bin&hpt=Sbin over half the people on this list have gotten major bonuses yet are still posting losses for the same year. Do you want that kind of thinking to have total but deniable control over your health? that is life without HIPPA.

Just remember the vast majority of laws are there because someone abused something to the detriment of many. The law may not be perfect but having it is better than the alternative.

Re:wasted?

[WalkingBear]

Federal requirements to protect health records, financial data, personal information, etc.. are great things. Federal requirements that say "unlawful disclosure of X information will result in Y penalties" is definitely a good thing. Federal requirements stating *HOW* every business within an industry or even across all industries perform a function are outdated at best, counter-productive at worst, before the ink's dry on the legislation.

Re:wasted?

[Rophuine]

The problem is that you're right. Compliance doesn't generally add value to the individual product or service. It adds value to the network or industry. Take PCI-DSS and the VISA and MasterCard networks.

Each individual bank/merchant wants to spend the minimum possible. As one of 30,000 odd banks on the network, or one of however many millions of merchants, they think their odds of being involved in a major breach is pretty small, and the risk of a lot of people losing a lot of money is that they change their name and set up shop down the road (in the case of a merchant), or shake their head, say they're sorry, and spend a million bucks on a brand name security solution (in the case of the banks). If you spend a little bit of money before anything happens, you raise the bar a bit, and reduce your risk a bit, but still, YOUR customers don't really see any benefit to those fee rises, so lots of places just try to sit below the radar of the hackers and the scammers and the other random crims.

Enter compliance: VISA and MasterCard say "hey, this sucks, nobody will spend money on security 'cause they think it won't happen to THEM. But EVERY SINGLE TIME IT HAPPENS, IT HAPPENS TO US. If each bank has one little problem once a year, we have THIRTY THOUSAND problems, and we're SICK OF IT." So they go to industry and say "you guys have to do this. And this. And this and this and this. And if you don't do it, we're gonna fine you a hundred grand. And if you don't pay the fine AND fix the problem, you're off our network, which pretty much means you're out of business."

And VISA and MasterCard create a whole new industry, and lots of jobs, and it turns out having a minimum level of security (or at least, a big stick to hit people with if they don't bother with a minimum level of security) is actually a financial plus across the system as a whole, even if it's bad for the some of the businesses. And consumer confidence is up, too, so we have more people spending more money, so even the banks and the merchants are happy in the end (by and large). And VISA and MasterCard say "HEY! This is cool, our profit margins are much better. Let's pay ourselves bigger bonuses."

Re:wasted?

[Rophuine]

So yes, I think it's a waste that the government forces corporations to spend a shit ton of money doing things that don't actually help me, instead of spending that money actually securing my data.

You're positing that if HIPAA was removed, industry would take all that wasted compliance money and spend it on security. I postulate that they'd instead take all that wasted compliance money and spend it on Ferraris.

Re:wasted?

[Rophuine]

Are you sure it's true? It might be, but it could also be that overall, every 100 dollars spent on security reduces fraud by only 60 dollars. Your point about where the burden falls is valid, but for the economy as a whole it's be better to just not bother.

I'll counter with the same question: Are you sure it's true? PCI-DSS is an unusual example, because it's market-driven and there is competition. The PCI-DSS was developed by MasterCard. VISA have their own (similar) compliance program. American Express do something different again. There are all sorts of smaller card schemes which would like to compete, again with their own rules. VISA and MasterCard focus on security, while smaller schemes often go for enhanced services or lower fees. Again, PCI-DSS is driven by whatever generates the most Ferraris (which while not necessarily great for consumers, is kinda the foundation of capitalism - and thus, hard to separate, at least for me).

In general terms, with things like medical privacy, doing it without a regulatory need generates 0 Ferraris. Doing it when there is a regulatory requirement (or at least, faking it) prevents the regulator from reducing your otherwise-positive Ferrari generation to zero (or worse, taking away Ferraris).

I agree that lots of things on 'The List' (when making sure you're compliant) are going to be value-less. Some of them are probably counter-productive, in that they take away from Money-You-Would-Totally-Spend-On-Voluntary-Compliance-Initiatives-Not-Ferraris. But that was kinda my point: MasterCard doesn't care how many Ferraris YOU (as a bank/merchant/poor sucker who has to comply with PCI-DSS) earn. They care about how many Ferraris THEY earn. So you will install high-security mesh above your ceiling and encrypt all of your emails, even if neither of those things actually increases the security of your particular offering.

Sadly, MasterCard were neither incompetent, nor charlatans, nor idiots, when writing the PCI-DSS: they just weren't very interested in protecting your money, except so far as it protected theirs. So, when it comes to government departments developing compliance schemes, what are they protecting? Their own jobs and reputations. And the best way to get fired from a cushy government job writing compliance documents for HIPAA? Write something that lets millions of patient records become public. The best way to keep getting paid? Make sure it's so long-winded and complicated that it would take forever to train your replacement.

Thus, just like an under-graduate engineer on their first bridge design assignment: over-engineer, over-engineer, over-engineer.

So you're saying

[compucomp2]

If there were no regulations and standards, then all the money would be funneled into actual security protocols?

Doesn't seem like that would be the case, especially since they are now just "going through the motions" to ensure compliance with regulations. The companies may well ignore data security altogether. By complying with regulations there is at least some level of security.

It's like the teachers' complaint that standardized tests force them to "teach to the test", well at least they're teaching something rather than nothing, which was the point of the test in the first place.

Re:So you're saying

[Eskarel]

And the astute teacher would be right, but still a crappy teacher.

However, the only way to find teachers who aren't teaching before it's too late is to periodically check their performance which means testing the students to see what they know.

The good teacher might question whether the test was doing an adequate job of measuring their performance(is it actually checking if the students are being taught what they need to know as opposed to what is on the test), and they might complain about the burden the test put on them when they're doing their job correctly, but they'd understand what the test was for.

Compliance is an expensive exercise, be it through testing or audits or whatever other avenue it might arrive, but the only way to determine whether someone is doing what they say they are before it's too late to change things is to check every so often. The issue for discussion is whether the checks are checking the right things.

Wow, way to miss the point.

[Daniel Dvorkin]

If a company's IP is insecure, it may, possibly, lose some money. If data which falls under regulation is insecure, people go to prison. This is exactly as it should be, and so the "imbalance" is entirely appropriate.

I suppose the folks at Forrester Research think that IP protection is more important than protecting, say, personal medical information. Fortunately, most people in the world are sane enough to disagree.

Re:Wow, way to miss the point.

[Attila Dimedici]

If a company's IP is insecure, it may, possibly, lose some money. If data which falls under regulation is insecure, people go to prison. This is exactly as it should be, and so the "imbalance" is entirely appropriate.

I suppose the folks at Forrester Research think that IP protection is more important than protecting, say, personal medical information. Fortunately, most people in the world are sane enough to disagree.

An important correction: if data which falls under regulation is not kept according to the regulation people go to prison. If following the regulation decreases the security of the data, no problem.

Re:Wow, way to miss the point.

[Daniel Dvorkin]

An important correction: if data which falls under regulation is not kept according to the regulation people go to prison. If following the regulation decreases the security of the data, no problem.

Fair enough, and if you can show that following HIPAA regulations makes personal medical data less secure, go for it. But the article doesn't address this point at all. They're talking solely about the relative value of corporate IP vs. data such as medical and credit information which is covered by regulation, and making the (absurd, to most people with a brain) argument that because the first is more valuable to the corporation than the second, corporations should spend their security dollars accordingly. In the absence of regulation, of course, this is exactly what would happen; the laws which specify harsh penalties for non-compliance are an entirely appropriate correction to this tendency.

Re:Wow, way to miss the point.

[Daniel Dvorkin]

Who has gone to prison (in the US) for not securing data, pre the standards being discussed in the article?

Before the standards were in place? Nobody, of course. Which is why the standards were put in place!

If you think the standards are unrealistic, or don't achieve their objectives, or could be implemented better ... fine, those are all valid points. But TFA doesn't address that at all. The point of HIPAA, PCI-DSS et al. is to ensure that corporations which deal with sensitive personal data take appropriate care with that data. Apparently some people in the exceutive suite are whining that they have to spend too much money protecting other people's information, because even though having the data is absolutely necessary to running their business, protecting it takes too much time and money. Well, cry me a river.

Re:Wow, way to miss the point.

[profplump]

I know for a fact that some insurers and claims processors have stopped using encrypted archives and moved to faxes for "secure" documents, because faxes only fall under the privacy rule, not the security rule, and their archive vendor would not indemnify them against security rule violations.

I seriously doubt this is the only example of "following the specific rules decreases system security" related HIPAA or any other rule-based security policy/regulation. It's pretty much a given that any new rule you enact will result in people changing their behavior to avoid the scope of the rule rather than simply complying with the rule; it happens even with 8-year-olds who want to stay up late, let alone managers who spend all day looking for a way to gain $0.02/unit over the competition.

--

And let's not even get into the harm caused by selling people "secure" systems that are not. For example, most "secure" email solutions neither guarantee encryption of outbound mail nor provide authentication of the intended recipient. But since they comply with the specific requirements of the relevant regulation we buy them anyway. Then users feel safe in sending sensitive information over the new "secure" system -- information that they may never have sent if we didn't tell them it was secure -- thereby increasing the risk profile while at the same time wasting money on non-secure "security" systems, all in the name of regulatory compliance.

Well That Makes Sense

[TheNinjaroach]

Regulations are in place to force companies to protect data that they would otherwise have very little incentive to protect. Protecting data that is important to the company itself comes naturally and does not require mandates.

Re:Well That Makes Sense

[guruevi]

The main problem with most compliance protocols (HIPAA or PCI) is that at best they do nothing at all, at worst it's actually counterproductive as it opens the company up to more breaches (due to human nature, laziness or conflicting policies).

I am involved in both HIPAA and PCI compliance and in the past I have been involved with Sarbanes-Oxley as well. For example with PCI as well as Federal wiretapping compliance, you need to have your respectively wireless and public networks (if you're a de-facto wireless internet provider to random strangers - eg. libraries, universities, ...) run through a separate (3rd party) provider and needs to be either logically or physically divided from the main network. Therefore, anyone on your public or wireless network will have to tunnel a VPN through a 3rd party provider, route it out to the internet and back into your primary provider to get work done which makes the whole system inherently less secure because your data goes outside your network.

PCI requires a firewall before your internet facing servers but also a perimeter firewall (if you have a really large institution) before all your edges even though you may have separate departmental firewalls. This does not make sense as you get to have 2 or 3 layers of firewalls - the first 2 layers being the ones that were historically built-up and the 3rd layer, a concentrated firewall and internet provider hub which becomes 1) easier to attack because it's all in one point, 2) easier to fail for the same reason, 3) more difficult to maintain because you still need the hierarchy of departmental firewalls to prevent attacks from other departments or other points in the network.

Re:Well That Makes Sense

[bearsinthesea]

I think you have some misconceptions about PCI. "At best", I have seen PCI make companies improve firewall rules, secure WLANs, and encrypt your plaintext credit card numbers (for starters).

If someone has told you that PCI requires using a 3rd party provider for public networks, you should get a second opinion. I have never seen that required or implemented.

Similarly, your firewall problem seems specific to your implementation. PCI requires firewalls between public networks and the cardholder data environment. Internal firewalls are not required, but are usually used to limit the scope of PCI. You don't want to make your CEO or secretary's computer PCI compliant, so you use firewalls to isolate only the systems in the cardholder data environment. You don't -have- to do this, but it makes things easier. I don't understand specifically what you mean by "a concentrated firewall and internet provider hub", but it does not sound like something required by PCI. Although it may have been a system designed by your organization to make compliance easier.

Checklist Security...

[Jah-Wren Ryel]

their security programs are driven mainly by compliance, rather than protection (PDF).

Sadly, this seems to be the way of the world. Even the things you would expect to be high-security, like classified information, tends to get this sort of treatment. I like to call it "Checklist Security" because most of the people doing security work are more interested in checking off steps an official procedure to CYA themselves than to make sure that whatever they are trying to protect is actually secured.

The TSA is another classic example - no containers of liquid greater than 100ml on the plane because that's on the checklist, but indiscriminate dumping of hundreds of them into one big trash bucket next to 30+ people in line at the checkpoint is fine because that's not on the checklist.

It's more than IT compliance

[grimsnaggle]

My school, working with VW, built a new building for automotive projects. It has handicapped parking spaces, handicapped showers and bathroom stalls, male and female restrooms, and multiple chemical showers. There are few handicapped people in the school, fewer in engineering, and none on any of the automotive teams - for obvious reasons. There are also very few females, to the point that unisex bathrooms (like those used in more gender-normal parts of campus) would have been a fine option.

There's also wasted space for clearance around electrical panels (which are everywhere), inspection points, etc. All told, some 30% of the square footage of the new building is wasted by complying with regulations. And the government charged us $130/sq ft just for the permit.

And we wonder why China is whipping our ass...

Re:It's more than IT compliance

[vlm]

Sometimes things are overbuilt for future use. For example in my area a large building at the local CC was designed and built for a "printing industry center of excellence". Crashed and burned, now they have general ed classes in the empty rooms.

The womens bathrooms will get more use when VW moves out and nursing holds some classes in the empty rooms. Or the handicapped folks training to become accountants, or whatever.

I find it highly unlikely you'll pay $130/sq for a permit alone. Maybe total project cost from say go until first class is held.

Sounds about right

[VTI9600]

What TFA refers to as "custodial data" (customer PII, CC numbers, etc.) *should* be protected by compliance with government and industry-specific regulation. If a company wants to shoot itself in the foot by not protecting intellectual property, trade secrets, sales leads, etc. then let them. CxO's far more likely to be paranoid about security of their precious secrets than with their customer's data anyway, since one is an asset while the other is a burden (security-wise).

One of two ways

[david_thornley]

The point of these regs is that the corporation and its clients have diverging interests. It's in my interest that my medical records not be publicly distributed (well, it certainly could be), but releasing them wouldn't really matter to the companies that keep them. Since I don't have much of a choice of companies, and can't audit these companies, market forces are inadequate to protect my interests.

Therefore, the government steps in. There are three ways the government could do this. One is to prescribe security measures. One is to allow me to sue for a whole lot of money in statutory damages if my privacy is breached. This gives the company some incentive, but it means that a large breach (despite what may be good security measures) kills the company. The last way is to have criminal penalties for data breaches, and that has the same result.

The prescribed security measures are actually the safest way for a given business. They require some expense, but they're also a form of insurance.

As far as the company's vital data goes, well, protecting their data is up to them. They have the resources, authority, and incentive. They have resources and authority to protect my data, and I have the incentive.

Re:The report is plain wrong IMHO

[sweatyboatman]

the report doesn't actually say that companies should not spend money on compliance. the summary says that, sure, but this is slashdot.

the paper says that the costs to companies of IP theft is far larger than for data leaks.

since companies cannot spend less on compliance, clearly the point is to get them to spend more on IP security. Which might be why Microsoft and RSA commissioned the paper in the first place. Now they can go into corporate board rooms and say "Yes, you already spend $X millions on security, but this report shows why you should spend $2X millions more on our new and improved security!"

How did they measure compliance?

[prgrmr]

The HIPAA regs have a lot of criteria for data protection, but practically nothing about how to implement or measure a given implementation for that criteria. I worked at a hospital where the CIO honestly thought that having a backup tapes and spreadsheet of prioritized servers to bring back up in the event of a disaster was a sufficient D.R. plan to cover what HIPAA required. So how did the study measure compliance?

The ansewr is that they didn't. Nor did they measure effectiveness of compliance-based processes and procedures, nor did they take into account the benefit of being in compliance. There's a chart in the .PDF that contrasts "custodial data" with "secrets". One of the criteria is Consequences. For "Secrets", the consequence is revenue loss, which is not necessarily automatic; however, they don't list revenue loss for "custodial data", even though there will be some, even if short-term, drop-off in business due to the incident.

The study is presented from the bias that the two commissioning companies wanted, namely to drum-up a motive via this presumably expertly manufactured need for greater security for security's sake. And you can bet that both Microsoft and RSA are going to be using this study to drive more product sales, and doing so from the perspective that better overall security equal better compliance--whether it actually does, or not.

Accounting

[Herkum01]

Compliance is about appeasing the corporate bureaucrat with something which they can measure. Why do you think they hate IT, they don't know how to measure anything. Better to make up a measurement and pretend it means something rather than spend time and effort in something you have no interest and really don't understand.

News Flash: Life boats no help in desert!

[cenobyte40k]

The idea behind those laws are not about protecting the company, it's about protecting the consumer and investor in that company. They are designed to give the same protection to the little investor, or individual customer the company doesn't care about as the big guy the company could have trouble with if they piss off. I know that these laws don't always work that way, but to say they don't help protect the company is like saying that life boats aren't worth anything because don't help people trapped in the desert. It the boat doesn't help people at sea then it's worthless and we should do something about it. I don't care if Murder being a crime doesn't help against rape, I still want it to be a crime.

Well of course

[ZouPrime]

The reason why security programs are geared toward compliance is because that's what sells to stakeholders!

A security manager in a typical organisation can rarely go see his boss to ask for massive investment in security without being laughed at. Security cost money, and without facing a real, quantifiable risk, his boss simply won't care. Obviously your mileage may vary depending of your boss cluelessness, your ability to efficiently sell fear, and your industry.

Compliance, on the other hand, is scary. There are penalties directly associated with non-compliance, and you know someone will actually come here and check if your compliant or not. So the risk is very direct and very obvious. That's why it's a much easier sell.

Of course, standards and regulations are designed to enforce security to begin with. Not saying that they are always succeeding, but at least they try to. So in the end, being compliant to a security standard does helps your organisation's security. The issues arise when one try to game the compliance, by falsely reporting which assets are critical for example. But if you're ready to lie (or bend the truth) around compliance, I don't see why you wouldn't do the exact same thing for security if you were let alone with your own risks.

PCI-DSS certification is a joke

[pongo000]

I have a merchant account for my performance shop. I'm required by my merchant account bank to submit to "certification" via PCI-DSS. Certification consists of logging into a site yearly and answering a series of questions, such as "Are customer receipts printed so that no more than the last 4 digits of the customer's CC number are printed, with no expiry dates or CVVs?" It's like the psych tests you take for a government job: You basically answer what you believe they want to hear.

The cost for this "certification" process? $100 a pop. I have no choice...get "certified" or lose my account.

Re:PCI-DSS certification is a joke

[Ritchie70]

You are a small merchant. You are making the mistake of believing that what you experience is what everyone experiences.

Merchants are split into three groups, "A", "B", and "C" if I remember correctly.

Class "C" merchants just have to do a questionnaire.

Class "B" merchants have to do more, I'm not sure what exactly.

Class "A" merchants have auditors in every year writing reports, and they always find something to ding you on.

It's a nightmare.

There are four objectives

[FreeUser]

There are two different objectives here, with (at least) two different processes. The first of these objectives is securing corporate assets. The second is securing sensitive individual information about people with whom the corporation does business. Security processes should ideally serve both objectives, but if that's impossible, then one process (or set of processes) has to be given prioroty over the other.

You are quite right, as far as you go. In fact, there are at least four objectives being served here.

(Disclaimer, I work at a large international investement bank)

3. Kissing corporate executive ass
4. Kissing government regulatory ass

Most of compliance falls into the latter two categories, and is about perception and ticking of boxes in corporate compliance forms far more than protecting assets. In fact, more often than not, the compliance requirements result in technical and bureaucratic logjams that are so onerous that the employees of the company are forced to route around them in order to do their jobs, resulting in far less security than would be in place of the compliance requirements were more sensible (and common sense) and less attorney driven. In either event, neither corporate nor customer security is enhanced...merely the bottom line of government bureaucrats, third party vendors, an entire division of the company whose sole purpose is to prostrate themselves before the ass of said parties, and the most important bottom line of all: ticking off a few annual objectives of some of the higher-up executives so they can "show their impact" and pad their bonus.

Day-to-day operating procedures are routinely decimated by this, but that only affects the bonuses and bottom line of the lower ranks and the day-to-day security of the firm...hardly a concern (after all, if something does happen, there's always someone (far) beneath said executives to fire).