Larry Clinton President Internet Security Alliance lclinton@isalliance.org 703-907-7028 202-236-0001
ISA Board of Directors J. Michael Hickey, 1 st Vice Chair Ty Sagalow, Esq. Chair VP Government Affairs, Verizon President, Innovation Division, Zurich Marc-Anthony Signorino, Treasure Tim McKnight Second V Chair , National Association of Manufacturers CSO , Northrop Grumman • Ken Silva, Immediate Past Chair, CSO VeriSign • Joe Buonomo, President, DCR • Jeff Brown, CISO/Director IT Infrastructure, Raytheon • Lawrence Dobranski, Chief Strategic Security, Nortel • Gen. Charlie Croom (Ret.), VP Cyber Security, Lockheed Martin • Eric Guerrino, SVP/CIO, bank of New York/Mellon Financial • Pradeep Khosla, Dean Carnegie Mellon School of Computer Sciences • Bruno Mahlmann, VP Cyber Security, Dell-Perot Systems • Linda Meeks, VP CISO, Boeing Corporation
Bottom line:The unbalanced cyber economics equation • Attacks are comparatively cheap and easy • Profits from attacks are enormous • Little risk of capture • The perimeter to defend is endless • We are inherently a generation behind the attacker • Defense is hard and costly with little perceived ROI
ISA Cyber Social Contract • Similar to the agreement that led to public utility infrastructure dissemination in 20 th Century (RoR regulation) • Infrastructure development -- market incentives. • We know what to do technically & operationally, but the economics & strategy are not in place • Partner at the business plan level and apply market Incentives from rest of the economy to cyber
Regulation is not the answer • Cyber problem is not corp. malfeasance • Technology changes too fast • General regs meaningless • Specific regs outdated • Congress can only regulate US • Increase cost on US firms=weaken competitiveness • Drive investment off shore=bad for economy and bad for security
Problems with cyber security economics • Consumers think they have more protection than they do. • Corporate responsibility is to maximize shareholder value, not secure the (cyber) boarders • Federal government is not managing its cyber cost vulnerabilities • Most companies don’t recognize their true cyber costs and hence don’t invest
Problems with corporate cyber economics • Point of attack in not necessarily the point of cyber loss. 3-party has no incentive to max invest • 3-parties undermine cyber ROI • Old analysis methods mask modern attacks • Corporate data “owners’ don’t feel they own the security of their data • Organizational problems hinder investment
Organizational Problems • “The security discipline has so far been skewed to technology---firewalls, ID management, intrusion detection---instead of risk analysis and intel gathering. Security investment must shift from technology heavy tactical operation it has been to date to an intelligence centric, risk analysis and mitigation philosophy. We have to start addressing the human element of security not just the technical one only then will companies stop being punching bags.” PWC 2008 Info Survey
Organizational Problems • “There is still a gap between IT and enterprise risk management. Survey results confirm the belief among IT security professionals that Boards & Sr. Execs are not adequately involved in key areas of enterprise risk security.” CMU Dec. 2008 • 17% have cross organizational security team • Only 47% have formal risk management plan • 1/3 of the 47% that had a plan did NOT include IT risks in the plan----CMU Dec. 2008
Organizational problems • 75% of companies DO NOT have a Chief Risk Officer (Delloite 2009) • 65% of US companies either don’t have a documented process to assess cyber risk or do not have a person in charge of the process they do “have in place” (Delloite 2009)---which functionally translates into really not having a plan at all.
As a Result of the Organizational problems • Nearly half (47%) of all the enterprises studied in the 2009 PricewaterhouseCoopers Information security survey reported they are reducing or deferring the budgets for info security initiatives • Even though 42% acknowledged “threats to their information security have increased” and 52% acknowledged the cost reductions make adequate security more difficult to achieve---PWC 2009
President Obama’s Report on Cyber Security • The United States faces the dual challenge of maintaining an environment that promotes efficiency, innovation, economic prosperity, and free trade while also promoting safety, security, civil liberties, and privacy rights. (President’s Cyber Space Policy Review page iii) • Quoting from Internet Security Alliance Cyber Security Social Contract: Recommendations to the Obama Administration and the 111th Congress November 2008
Social Contract II Implementing the Obama Cyber Security Strategy via the ISA Social Contract Model
Cyber Space Policy Review is Pro-Economic • The Cyber Coordinator will report to the National Economic Council as well as the National Security Council • CSPR embraces a enterprise wide risk management philosophy (including Enterprise Education) • For the first time the government proposes the use of economic incentives to promote better private sector security
Issues Covered in social Contract 2.0 • Economics of cyber security • Information sharing • Supply chain • Financial Cyber Risk Management • Analog laws governing digital technology • Developing automated security standards for converged media (e.g. VOIP)
Chapter 2: Partnership at the Business Plan Level • Obama personally rejected regulation of Private Sector for cyber security • Gov role to evaluate & create incentives for adopting good cyber secure policies practices and technologies just as in other areas of economy • Market incentives endorsed by Obama Cyber Space Policy Review used as menu for voluntary compliance
ISA Testimony on Incentives (May 1, 2009) 1. R & D Grants 2. Tax incentives 3. Procurement Reform 4. Streamlined Regulations 5. Liability Protection 6. Public Education 7. Insurance 8. SBA loans 9. Awards programs 10. Cyber SAFETY Act
Obama’s Report on Cyber Security (May 30, 2009) The government, working with State and local partners, should identify procurement strategies that will incentivize the market to make more secure products and services available to the public. Additional incentive mechanisms that the government should explore include adjustments to liability considerations (reduced liability in exchange for improved security or increased liability for the consequences of poor security), indemnification, tax incentives, and new regulatory requirements and compliance mechanisms. President’s Cyber Space Policy Review May 30, 2009 page vs. » Quoting Internet Security Alliance Cyber Security Social Contract: Recommendations to the Obama Administration and 111 th Congress
Chapter 3: Information Sharing • Current model doesn’t work • Modern business systems too open • Limited participation in ISACs especially SMEs • Gov wont give source material, industry won’t give attack data or important internal information • Can’t keep out determined attackers • Once in the systems we have more control over attackers
Information Sharing-- Incentives • Large Orgs become designated reporters (gold, silver etc.) which can be used for marketing • Rpt C2 sites, (URLs-web sites) not that they have been breached or internal data • Gov reports---not source data • AV community circulate the info for profit • Small companies able to participate easy and cheap to block C-2
Securing The IT Supply Chain In The Age of Globalization November, 2007
Securing the IT Supply Chain The challenge with supply chain attacks is that a sophisticated adversary might narrowly focus on particular systems and make manipulation virtually impossible to discover. Foreign manufacturing does present easier opportunities for nation- state adversaries to subvert products; however, the same goals could be achieved through the recruitment of key insiders or other espionage activities. For organizations that have not yet made cyber security a true priority there are other barriers, often primarily economic.” President’s Cyber Space Policy Review May 30, 2009 page 34
Supply Chain Economic Issues • Secure Foundry unsustainable (think prisons) • Govt. mandates unsustainable • We are inherently a global economy • US firms can’t compete with heavy special burdens • Mandating security for US firms will hurt economically, reduce quality and harm security by driving providers off-shore even more
ISA Supply Chain Framework • 5 Phases, design, fabrication, assembly, distribution & maintenance • Remedies to interruption of production, corruption of production, discrediting of production and loss of control of production • Legal Support for : unambiguous contracts w/ security measures, responsible corporation w/long term interests, motivation 4 workers and execs, verification & enforcement
2010 Supply Chain Agenda 5 Workshops in first 2 quarters of 2010 • I. Securing the Design and Fabrication Phases. • II. Securing the Assembly, Distribution, and Maintenance Phases. • III. Establishing the Necessary Legal and Contractual Conditions.
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