|By Dana Gardner||
|October 24, 2012 08:30 AM EDT||
Welcome to the next edition of the HP Discover Performance Podcast Series. Our latest discussion examines how the culture of security -- and the openness and therefore responsiveness about it -- can have a huge beneficial impact on organizations.
We'll be learning from the example of Heartland Payment Systems, and how they moved rapidly from a security breach to an overall improved security stance largely thanks to embedding a security-as-culture position across their operations and into their business strategy.
Join co-host Raf Los, Chief Security Evangelist at HP Software, and special guest John South, Chief Security Officer at Heartland Payment Systems, based in Princeton, New Jersey. The chat is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]
Here are some excerpts:
Gardner: You've been at Heartland Payment Systems for several years now, but you got there at a pretty tough time. Why don't you tell us a little about what was going on at Heartland when you arrived?
South: Certainly 2009, when I joined, was one of turmoil and anxiety, because they had just gone through a breach. The forensics had been completed. We understood how the breach had taken place, and we entered a period of how to not only remediate and contain that and future breaches, but also how to make that security consistent and reliable in the future.
It was not only a technical problem, but it became very quickly a business and a cultural problem that we also had to solve. As we took the elements of the breach and broke it down, we were able to figure out technically the kinds of controls that we could put in place that would assist in shortening the gap between the time we would see a future breach and the time we were able to respond.
More importantly, as you pointed out, it was developing that culture of security. Certainly, the people who made it through the breach understood the impact of the breach, but we wanted to make sure that we had sustainability built it into the process, so that people would continue to use security as the foundation.
Whether they were developing programs, or whatever their aspect in their business, security would be the core of what they looked at, before they got too far into their projects. So, it's been an interesting couple of years for Heartland.
Gardner: Just for background for our listeners, in early 2009, something on the order of 94 million credit card records were stolen due to a SQL injection inserted into your data-processing network. I’d also like to hear more about Heartland Payment Systems, again for those of our listeners who might not know. I believe you’re one of a handful of the largest credit card processors in the U.S., if not the world.
South: We are. Right now, we’re number six in the US, and with consolidation and other aspects, that number floats around a bit. We're basically the pipeline between merchants and the banking system. We bring in payments from credit cards and debit cards. We handle payroll, micro payments and a number of other types of payroll channel or payment channels that we can then move from whatever that source, the merchant, to the appropriate bank that needs to handle that payment.
It's a very engaging process for us, because we’re dealing with card brands on one side, banks on another, and the merchants and their customers. But the focus for Heartland has always been that our merchants are number one for our company.
That's the approach we took to the breach itself, as you may know. We’ve been very open with the way we work with our merchants. In fact, we established what we call The Merchants Bill of Rights. That was part of the culture, part of the way that our executive team thought all along. So, the way they handled the breach was just an extension of the way they always thought about our merchants and our customers themselves.
Gardner: Raf Los, we’ve seen a variety of different ways companies have reacted to breaches of this magnitude, and even for things smaller and everything in between. Most of the time, the reaction is to put up more barriers, walls, or a perimeter, not only around the systems, but around the discussion of what happens to their systems when security can become an issue. So, why is Heartland’s case different, and why do you think it's interesting and perhaps beneficial in how they’ve handled it?
Los: Dana, first, there are two ways that you can take a monumental impact like this to your business. You can either be negative about it, and in some cases, try to minimize it, keep the media from it, keep your customers from getting the full information, and try to sweep it under the rug.
In some cases, that even works. Maybe the world forgets about it, and you get a chance to move on. But, that's one of those karmic things that comes back to bite you. I fully believe that.
What Heartland did is the poster child for the phoenix transformation. John touched on an interesting point earlier. For them, it was a focus on the merchants, or their customers. The most important thing wasn’t the fact that they had a data breach, but it was the fact that a lot of their merchants were impacted. The people they did business with were impacted. Their reputation was impacted.
Their executives took a stand and said, "Look, we can do this the easy way, try to get out of it and scoot, and pretend it didn’t happen. Or, we can take responsibility for it, step up, and take the big kick in the pants in the short run. But in the long term, we'll both earn the industry’s respect, the respect of our customers, and come out of it with a transformation of the business into a culture where, from the people that lead the company down to the technologist, security is pervasive." That's gutsy, and now we know that it works, because they did it.
Gardner: It's my understanding that it only took them a couple of months after this breach to issue a statement about being in compliance with payment card industry data security standard (PCI DSS) and returning to Visa's list of validated service providers. So you had a fairly quick response to the major issues.
I'd like to hear more, John, about how the culture has changed since that time, so that others might learn from it, not only the openness benefits, but how the culture of security itself has changed?
South: Dana, you made a very good point that going back to becoming compliant under the eyes of PCI and the card brands took six weeks. I have to plug the guys in the company for this, because that was six weeks of some people working 20-22 hours a day to bring that about.
There was a huge effort, because it was important for us and important for our customers to be able to have the reliance that we could stem this thing quickly. So, there was a lot of work in that period of time to bring that together.
That also helped build that culture that we’re talking about. If you look at the two parameters that Raf had put out there, one being we could have obfuscated, just hid the fact, tried to run from the press, and been very evasive in our wording. That may have worked. And it may not have worked. But, for us, it wasn’t an option, and it wasn’t an option at all in the process.
For us, it was part of the executive culture to be very open and the people who participated in the breach understood that. They knew the risk and they knew that it was a time of great distress for them to be able to handle the breach and handle the pressure of having been breached.
What that did for our customers is build a strong reliance upon the fact that we took this very seriously. If we had taken this as “let's hide the fact, let's go ahead and fix the problem and see what we can get away with,” it would have been the wrong message to carry to our people to begin with. It would have said to our people that it's okay if we go ahead and fix the problem, but it's just a fix. Fix it and walk away from it.
For us, it became more that this is something we need to take responsibility for. We took that responsibility. As we say, we put on the big-boy pants, and even though we had the financial hit in the short run, the benefits have been wonderful from there. For instance, during the course of the breach, our attrition was very, very low. Our customers realized by our being that open that we were seriously involved in that process.
Honesty and openness
Los: John, that speaks perfectly to the fact that honesty and openness in the face of a failure like that, a big issue, is the thing to do. If I found that something like that happened and the first thing you told me was, "It's no big deal. Don’t worry about it," I'd get suspicious. But if you told me, "Look, we screwed up. This is our fault. We're working to make it better. Give us some time, and it will be better," as a customer, I'm absolutely more apt to give you that benefit of the doubt.
In fact, if you deliver on that promise long-term, now you’ve got a really good relationship. I hope by now we've realized, most people have realized, that security is never going to reach that magical utopian end state. There is no secure.
We provide the best effort to the alignment of the business and sometimes, yes, bad things happen. It's the response and recovery that’s absolutely critical. I don't want to beat a dead horse, but you guys did a fantastic job there.
South: Thank you, Raf, and you hit a really important point. Security is not that magic pill. We can't just wave a security wand and keep people out of our networks. If someone is motivated enough to get into your network, they're going to get into your network. They have the resources, the time, the money, and, in many cases, nation-state protection.
So they have the advantage in almost every case. This goes back into the concept of asymmetric warfare, where the enemy has a great deal more power to execute their mission than you may have to defend against it. For us, it's a message that we have to carry forward to our people and to our customers -- that our effort is to try to minimize the time from when we see an attempt at a compromise to the time we can react to it.
Los: I took that note earlier, because you said that a couple times now and I'm intrigued by "mean time to discovery" (MTTD). I think that’s very meaningful, and I don’t know how many organizations really and truly know what their MTTD is, whether it's in applications, and how long it takes to find a bug now in the wild, once it’s made it past your relief cycle, or how long it takes to discover an intrusion.
That's extremely important, because it speaks to the active defenses and the way we monitor and audit, because audit isn't just a dirty word that says somebody walks through, checks a couple of boxes, and walks out.
I mean audit in the true sense. Someone goes through and looks at systems, does some critical thinking, and does some deep analysis. Because, at the end of the day, John, I think will probably be the first to say this, systems have gotten so complex right now to maintain. Real control on this kind of sprawl is virtually impossible. Forget how much budget you can have. Forget how many staff you can hire. It's just not possible with the way the business moves and the way technology speeds along.
The rational way to look at that is to have a team that, every so often, takes a look at a system, looking to fully audit on this. Let's figure out what's going, what's really going on, in this platform.
South: That’s one of the cultural changes that we've made in the company. I have the internal IT audit function also, which is very nontraditional for a company to do. A lot of times, the audit function is buried up in an internal audit group that is external to the operation. That makes it a more difficult for them to do a truly effective audit of IT security.
Separate and independent
I have an audit group that stands separate and independent of IT, but yet is close enough with IT that we can go in and effectively conduct the audits. We do a large number of them a year.
What's important about that audit function and what positively influences the effectiveness of an audit is that you go into the meeting with, say, a technical group or a development group that you want to audit, with a positive, reinforcing attitude -- an attitude of not only finding the issues, but also of a willingness to help the group work out its solutions. If you go into the audit with the attitude that “I am the auditor. I'm here to see what you are doing,” you're going to evoke a negative reaction.
My auditors go in with a completely different attitude. "I'm here to help you understand where your risks are." That whole concept of both moving from an adversarial to a proactive response to auditing, as well as having a very proactive engagement with security, is what's really made a big cultural shift in our company.
Gardner: Help me better understand how we get companies, for those who are listening, to shift perceptions about security.
South: That’s always a strong question that has to be put to your executive team. How do we shift the understanding and the culture of security? In our case, our executive team realized that one of the fundamental things that was important for security of our company as a whole was that security had to be baked into everything that we did.
So we've taken that shift. The message that I take out to my people, and certainly to the people who are listening to this podcast, is that when you want to improve that security culture, make security the core of everything that takes place in a company. So whether you're developing an application or working in HR, whether you're the receptionist, it doesn't matter. Security has to be the central principle around which everything is built.
If you make security the adjunct to your operation, like many companies do, where security is buried several layers down in the IT department, then you don't have the capability of making it the fundamental and core principle of your company. Again, it doesn't matter who you are in a company, you have some aspect of security that is important to the company itself.
For us, the message that we're trying to get out to people is to wrap everything you do around the security core. This is really big, particularly in the application world. If you look at many other traditional ways that people do application development, they'll develop a certain amount of the code and then they'll say, "Okay, security, go check it."
And of course, security runs their static and dynamic code analysis and they come back with a long list of things that need to be fixed, and then that little adversarial relationship starts to develop.
Los: John, as you're talking about this, I think back. Everybody's been there in their career and made mistakes. I'll readily admit that this is exactly what I was doing about 12 or 13 years ago in my software security role.
I was a security analyst. The application would be ready to go live. I'd run a scan, do a little bit of testing and some analysis on it, and generate a massive PDF report. Now you either walk it over to somebody’s cube, drop it off, walk away, and tell them to go fix their stuff, or I email it, or virtually lob it over the wall.
There was no relationship. It's like, "I can't believe you're making these mistakes over and over. Now go fix these things.” They'd give me that “I am so confused. I don’t know what you're talking about look." Does it ever get fixed? Of course, not.
South: And, Raf, the days of finishing a project on Thursday, turning it over to security, saying, "This is going live on Friday," are long gone. If you're still doing that, you're putting your company at risk.
Gardner: Perhaps, Raf, for those of us who are in the social media space, where we're doing observations and we're being evangelists, that there is a necessary shift, too, on how we react to these security breaches in the media.
Rather than have a scoreboard about who screwed up, perhaps it's a better approach to say who took what problems they had and found a quick fix and limited the damage best. Is there a need for a perception shift in terms of how security issues in IT and in business in general are reported on and exposed?
Los: I absolutely believe that rather than a shamed look, it's always better to lead by example, and hold those who do a good job in higher esteem, because then people will want to aspire to be better. I fundamentally believe that human beings want to be better. It's just we don’t always have the right motivations. And if your motivation is, "I don’t want to be on that crap list," for lack of a better term, or "I don’t want to be on that worst list," then you'll do the bare minimum to not be on that worst list.
People will respond
If there's a list of top performing security companies or top performing companies that have the best security culture, whatever you want to call it, however you want to call that out, I firmly believe people will respond. By nature, people and companies are competitive.
What if we had an industry banquet and we invited everybody from all the heads of different industries and said, "Nominees for best security in an industry are, finance, health care, whatever?" It would be a show like that, or something.
It wouldn't have to be glitzy, but if we had some way of demonstrating to people that your customers in the world genuinely care about you doing a good job -- here are the people who really do a good job; let's hold them up at high esteem rather than shame the bad ones -- I think people will aspire to be better. This is always going to work going forward. The other way just hasn’t worked. I don’t see anything changing.
South: I think that's the right direction, Raf. We still have some effort to go in that direction. I know of one very, very large company, and one of their competitors had been breached just recently. So I called a contact I had in their security group and passed on the malware. I said you might want to check to see if this is in your organization.
He said, thanks and I called him up a couple of days later and I asked, "How did it go?" He said, "Upper management kind of panicked for a little bit, but I think everything settled down now." This was code for "they didn't do much."
We have some progress still to make in that direction, but I think you're absolutely correct that the more these people see successful examples of how you can deal with security issues, the more it's going to drive that cultural change for them. Too often they see the reverse of that and they say, "Thank God that wasn’t us."
Gardner: Is there something that comes together between what's new and interesting about the technologies that are being deployed to improve posture around security and that might aid and abet this movement toward openness and the ability to be direct, and therefore more effective in security challenges?
Los: One of the keys is the pace of change in technology. That technology, for a number years, in our personal lives, used to lead technology in the business world.
So a laptop or desktop you had at home was usually in the order of magnitude greater than what was sitting on your desktop at the office and your corporate phone would be an ancient clamshell, while you have your smartphone in your pocket for home use.
What's starting to happen is people are getting annoyed with that, and they want to carry fewer devices. They want to be able to interact more and organizations want maximum productivity.
So those worlds are colliding, and technology adoption is starting to become the big key in organizations to figure out what the direction is going to be like, what is the technology trend going to be. Then, how do we adapt to it and then how do we apply technology as a measure of control to make that workable? So understand technology, understand direction, apply policy, use technology to enforce that policy.
South: And it's finding what elements of technology are relevant to what you're doing. You see a large push today on bring your own device (BYOD), and the technologies that are making almost a commodity of the ability to handle information inside your company.
The biggest challenge that we are facing today is being able to make relevant technology decisions, as well as to effectively apply that new technology to our organizations. It's very simple, for instance, put a product like an iPad onto your network and start using it, but is it effectively protected and have you thought about all of the risks and how to manage those risks by putting that device out there?
Technology is advancing, as it always does, at a very high clip, and business has to take a more measured response to that, but yet be able to effectively provide something for its employees, as well its costumers, to be able to take advantage of the new technologies in today's world.
That's what you're seeing a lot in our customer base and the payments space in mobile technologies, because that's the direction that a lot of the payment streams are going to go in the future, whether it be contact or contactless Europay, Mastercard, and Visa (EMV) cards or phones that have near field communication (NFC) on them. Whatever that direction might be, you need to be responsive enough to be able to be in that market.
As you said, it's technology that’s driving something of the business itself, as well as the business and the culture in the company being able to find ways to effectively use that technology.
Gardner: I'm afraid we will have to leave it there. Please me join me in thanking our co-host, Raf Los, Chief Security Evangelist at HP Software, and our special guest, John South, Chief Security Officer at a Heartland Payment Systems. You can gain more insights and information on the best of IT Performance Management at http://www.hp.com/go/discoverperformance.
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