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Naughty or Nice: The Holidays Put Security Practices of Merchants to the Test

In less than two weeks, US consumers will engage in the annual holiday shopping frenzy known as Black Friday. Nearly 250 million shoppers will generate over $50 billion projected revenues during the Black Friday weekend, which begins on Thanksgiving Day.

The Christmas holiday season has long been a make-or-break period for retailers. Sales in November and December can account for as much as 30% of a retailer’s annual sales, and make up nearly 20% of the industry’s annual $3.2 trillion revenues. All this good news belies the fact that many merchants are relying on security practices that Old Saint Nick would describe as naughty.

The problem with PCI compliance

Some of you have doubts about the merits of using PCI compliance as a measure of an organization’s overall security posture. In part, this may stem from high-profile breaches occurring at merchants that had supposedly been compliant. For example, Target’s PCI compliance was validated a few months before last year’s holiday season breach, raising doubts about their compliance and the QSA’s assessment.

The overall rate of PCI compliance is only 11.1%

We may never know whether Target was actually PCI compliant before or during the period when it was breached. One thing we do know – and this is a significant problem – when it comes to PCI, the goal of many merchants is not achieving better security, it is achieving compliance. In other words, some retailers view PCI as a resource-consuming annoyance, as opposed to a set of guidelines for optimizing defenses. This attitude results in merchants doing only what’s minimally necessary to pass a point-in-time PCI compliance assessment, as opposed to maintaining full compliance on a day-to-day basis as called for in the PCI Data Security Standard.

PCI by the numbers

To help shed some light on security issues that may arise this holiday season, Tenable created an infographic titled, Are the Security Practices of Retailers Naughty or Nice This Holiday Season? (scroll down to view the infographic). Drawing on data from a variety of sources such as IBM, PwC, comScore, and the Verizon 2014 PCI Compliance Report, this infographic highlights some issues associated with PCI compliance. For example:

  • The overall rate of PCI compliance is only 11.1%
  • Compliance with PCI Requirement 11 (which covers the regular vulnerability scanning and penetration testing of processes, applications, and networks) is only 40%
  • Nearly 87% of merchants experiencing breaches were not compliant

It’s the most vulnerable time of the year

Overall PCI compliance rates are quite low. And at this time of year many merchants are operating in production freeze. The focus for IT teams is on uptime, performance, throughput and availability – optimizing retail transactions. Patching and other security-related updates get pushed to the back burner.

If you’re reading this blog, chances are you know that major vendors like Oracle, IBM, Cisco, Microsoft, Red Hat, Google, Apple and Adobe together will announce hundreds of vulnerabilities in Q4 2014. And, if the last two years are any indication, there will be hundreds more in January. This implies that there are lots of merchants running their businesses on vulnerable systems. It also partially explains the exploding growth of the market for cyber insurance, estimated to grow from $1 billion last year to $2 billion this year.

And now a word from the PCI Council

As I was writing this blog, I ran across a comment from Bob Russo, general manager of the PCI Security Standards Council, posted on Dark Reading and made in response to a story about a lawsuit filed against a well-known merchant and its QSA. Russo’s statement reminds merchants that security is a business-as-usual operation, and his message is well worth repeating as we approach Black Friday 2014. It’s also nicely aligned with Tenable’s position on the need for continuous network monitoring against a security policy:

As the Council does not conduct PCI compliance assessments, we cannot speculate on any specific assessment or any related lawsuits or ongoing investigations. The Council reminds organizations that a compliance assessment is just a snapshot in time and that passing a PCI compliance assessment at one point in time does not guarantee the ongoing security of your business or data. PCI Standards are a strong security baseline to help businesses prevent, defend and detect attacks on their systems with a layered approach. But just like a lock is no good if you forget to lock it, these controls are only effective if they are implemented properly and as a part of an everyday, ongoing business process.

Security is a daily habit, not just an annual compliance validation. Changing security habits from naughty to nice requires time, effort, vigilance, investment in comprehensive security solutions, continuous monitoring, employee training, and attitude adjustments. It’s a major investment, but well worth the expense when compared to the cost of recovering from a major breach.

Please let us know what you think of our infographic. And from all of us at Tenable, have a happy Thanksgiving and a secure holiday season!

Naughty or Nice - The Holidays Put Security Practices of Merchants to the Test  | Tenable Network Security