7 Things All CFOs Should Know About Cyber Security

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1 Insero & Company s Accounting & Finance Education Series Presents 7 Things All CFOs Should Know About Cyber Security September 23, 2014 Michael Montagliano Chief Technologist, IV4. Inc. CERTIFIED PUBLIC ACCOUNTANTS BUSINESS & FINANCIAL ADVISORS

2 Presented by: Insero and IV4 Date: IV4 is a leading IT consulting, engineering, design, and product fulfillment company IV4 consultants and engineers differ by having achieved the Highest Levels of Proficiency in both technology and business. IV4 has 6 major Practice Areas: IV4 leverages our IV4Sight Methodology to help ensure your project s success. IV4 is your IT Partner, not just your provider. Infrastructure, Virtualization, & Cloud Data Management Business Collaboration Governance, Security, & Compliance Mobility & End User Experience Network Management GOLD Moving Your Business to the Forefront 1

3 IV4 Presenter Michael Montagliano Chief Technologist CISSP, CEH, CDRP, MBCI, EDRP 20 years of IT industry experience Subject Matter Expertise: Security and Business Continuity Cyber crimes continue to be costly. We found that the average annualized cost of cyber crime for 60 organizations in our study is $ 11.6 million per year, with a range of $ 1.3 million to $ 58 million. - Ponemon Institute 2

4 Notable Security Breaches..that we know about! 3

5 Target: The Numbers $150 Million to clean up after data breach Profits tumble 62% to $234 million Customer Transactions decline falling 1.3% Sales at stores flat and shares drop at the news Challenges of Perpetually Evolving Security Environment UNDERSTANDING THE THREAT LANDSCAPE DEVELOPING AN APPROACH TO CYBER INTELLIGENCE ADDING CYBER SECURITY CAPABILITIES What are the changes taking place that we need to be aware of? Who is attacking us and why? With more data available from more security devices, what are the right capabilities to turn data into actionable intelligence? Once we have security analytics and intelligence feeds in place, how do we build an effective response strategy? 4

6 Sophistication of Cyber Threats, Attacks, and Motives Escalating Motive National Security Espionage, Political Activism Monetary Gain st Decade of Commercial Internet st Decade of Commercial Internet Nation-states: Targeted Attacks Advanced Persistent Threats Competitors, Hacktivists Organized Crime, Hackers using Sophisticated Tools Revenge Insiders using Inside Information Curiosity Script-Kiddies, Web How-To s Adversary Average Mid to Large Sized ( Employees) Company Must Filter 1,400 Attacks Weekly to Identify 1.7 Incidents SECURITY EVENTS SECURITY ATTACKS SECURITY INCIDENTS ANNUAL 81,893,882 ANNUAL 73,400 ANNUAL 90.2 MONTHLY 6,824,490 MONTHLY 6,100 MONTHLY 7.51 WEEKLY 1,574,882 WEEKLY 1,400 WEEKLY 1.7 Events: Observable occurrences captured by monitoring device(s). Attacks: Security events identified as malicious activity Incidents: Attacks that have been reviewed by analyst and warrant investigation 5

7 Manufacturing and Finance Offer Hackers Biggest Payoff INCIDENTS RATES ACROSS INDUSTRIES Manufacturing 26.5 Finance and Insurance Information and Communication Healthcare and Social Services Retail

8 SMBs create 64% of net new jobs in U.S. Account for 54% of all U.S. sales and ½ of all private-sector payroll No. 1: Your data is more valuable than you think No. 2: Cyber attacks offer low risk and high returns No. 3: You re an easier target No. 4: Many SMBs have their guards down No. 5: Most SMB security tools are no match against attacks 7

9 The original perimeter is constantly being extended. At the outset, building a perimeter seems like a modest undertaking. You have servers and users systems, both relying on some combination of security systems to make up a perimeter for your data. Extending the Data Center: Yesterday s Perimeter 8

10 The New Perimeter The new perimeter is the data itself. It is not all sensitive, nor is it all non-sensitive. This information also lives everywhere. It lives on different devices. It lives in different physical locations. And it exists in many different forms. The new perimeter is the information itself. New IT Landscape: Data Silos and User Types 9

11 10

12 TECHNOLOGY ROADMAP: INTERNET OF THINGS CHALLENGES: DATA VOLUME 11

13 CHALLENGES: IOT SECURITY RISKS Basic IoT Building Blocks Physical Element i.e. Factory Data Flow (Green Arrows) Command Flow (Red Arrows) Server (Analytics and Remote Control Application) CHALLENGES: IOT SECURITY RISKS Eavesdropping: Listening in on the data or the commands Fake Device: Injecting fake measurements Fake Server: Sending incorrect command 12

14 CHALLENGES: HOW TO SECURE THE IOT 1. Devices require tamper-proof capability 2. Track the device from manufacturing to deployment 3. Devices need to authenticate themselves to the control systems 4. Devices must be able to authenticate the server control system 5. Data and command flows must be encrypted 13

15 NATO Set On Joint Defense in Case of a Major Cyber Attack U.S. Military Cyber War Games United States government is building its own "scale model" of the Internet. The system will allow researchers to simulate attacks by foreign powers and from hackers based inside the US. 14

16 15

17 An APT targets a specific organization for a specific purpose, but an ordinary adversary is generally more interested in finding targets of opportunity. An APT is generally slow and methodical you could say strategic. An ordinary adversary is typically opportunistic and performs a quick strike and is done with it. An APT utilizes specially chosen tools and techniques to compromise the entity. An ordinary adversary uses whatever tools he has right now. THE ADVANCED PERSISTENT THREAT LIFE CYCLE 16

18 POINT-IN-TIME SECURITY ASSESSMENTS Fix Problems Ignorance is Bliss Sheer Panic Am I Hosed? Yes, the Vendor s Tools Prove it Audit Results Source: Jaquith, Andrew, Security Metrics,

19 Traditional Solutions to Threats Antivirus Been around since the 1980 s Signature and heuristic based techniques Status quo is starting to crumble Firewalls Long history of blocking or admitting network packets based on originating and destination IP address and port number Intrusion Prevention Systems IPS can be configured to permit or block network packets based on their origin, destination, and particulars about their contents Web Filters Have the ability to block access to websites Spam Filters Block over 99 percent of the spam that rockets in from everywhere Patch Management Windows and 3 rd Party Patch Management at the core of traditional solutions SECURITY CHALLENGES WITH TRADITIONAL APPROACH 18

20 Stopping APT with Modern Methods Applying Big Data Analytics to Detect Malware Scalability and elasticity Strength in numbers Event correlation Technique has been used by hardware based security information and event management (SIEM) solutions Event extrapolation Log data from one part of an organization may reveal botnet-controlled systems that are communicating with other owned systems Machine learning By using machine learning in a Big Data environment, it s possible to distinguish network traffic associated with botnets and malware, from network traffic that s benign Analyzing malware Service analyzes the malware and its network interaction in a sandbox and then puts this malware behavioral profile information into its Big Data analytics system, so that it can recognize the presence of this malware on other customers networks OVERALL APT PROTECTION ARCHITECTURE Advanced Correlation Event Correlation Threshold Correlation Statistical Correlation Cross-Device Correlation Session Correlation Identity Correlation Location Correlation Multi-stage Correlation Accurate Detection and Prioritization of Threats Logs from security devices, servers, and applications Asset categories and asset criticality Types of attacks Reputation data Vulnerability scan data Use Cases that identify risks like unauthorized access of data Cross-correlation of multiple events and use cases 19

21 More than half of corporations with 1,000 or more employees now have a full- or part-time executive in the post. A role that didn t exist a decade ago. Many of the chief information security officers in a Ponemon study rated their position as the most difficult in the organization. CISO Role: Can You Hack It? Most questioned said their job was a bad one, or the worst job they have ever had. Many end up leaving voluntarily or not after two years. 20 Chief executives stick around for 10 years on average.

22 U.S. government was trying to recruit for 30,000 plus security engineers at Black Hat. 21

23 U.S. Law Enforcement Agencies are making an effort to notify business about intrusion activity they have a high confidence could be used in an attack, but, should there be a dedicated agency similar to the Center for Disease Control. 22

24 JUST AS THE CDC PLAYS A KEY PART IN PUBLIC EDUCATION ON PREVENTATIVE HEALTH CARE, SO TOO COULD A CYBER-CDC BE A HUB FOR BETTER CYBERHYGIENE. Saving the Internet: A CDC for Cybercrime 23

25 24 Thank You! Questions?

26 Insero & Company CPAs, P.C. Certified Public Accountants Business & Financial Advisors Rochester >> Corning >> Disclaimer These materials were prepared solely for the purpose of continuing professional education. They are distributed with the understanding that Insero & Company CPAs, P.C. and its employees are not engaged in rendering legal, accounting, or other professional service as part of this CPE presentation. If advice or other expert assistance is required, the services of a competent professional person should be sought. Please contact an Insero & Company team member with any questions. The information contained herein is general in nature and based on authorities that are subject to change. Insero & Company CPAs, P.C. guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omission, or for results obtained by others as a result of reliance upon such information. Insero & Company CPAs, P.C. assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situation. Circular 230 Disclosure: Any information contained herein, or on any website or link associated with this document is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. Insero & Company CPAs, P.C. is an integral part of the McGladrey Alliance, a premiere affiliation of independent accounting and consulting firms in the United States, with more than 90 members in 42 states and Puerto Rico. McGladrey Alliance member firms maintain their name, autonomy and independence and are responsible for their own client fee arrangements, delivery of services and maintenance of client relationships. McGladrey Alliance is a business of McGladrey LLP which operates under the McGladrey brand as the fifth largest U.S. provider of assurance, tax and consulting services. McGladrey, the McGladrey logo and the McGladrey Alliance signatures are used under license by McGladrey LLP. McGladrey, the McGladrey logo, the McGladrey Alliance signatures and The McGladrey Classic logo are used under license by McGladrey LLP. Correspondent of the RSM International network of independent accounting, tax and consulting firms.

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