Will New NY Banking Regulations Actually Tighten Cybersecurity?

Proposed New York banking regulations might not help that much.

New York is proposing new cybersecurity rules that would raise the bar for banks over which they have jurisdiction (wouldn’t that be just about all of them?). On their face, the new regulations would seem to improve overall bank posture, but digging a bit deeper leads me to conclude that these regulations require a bit of work.

A few key new aspects of the new rules are as follows:

Banks must perform annual risk assessments and penetration tests;
New York’s Department of Financial Services (DFS) must be notified within 72 hours of an incident (there are currently numerous timeframes);
Banks must use 2-factor authentication for employee access; and
All non-public data must be encrypted, both in flight and at rest.

The first item on that list is what Chief Information Security Officers (CISOs) already get paid to do. Risk assessment is in particular the most important task on this list, because as banks evolve their service offerings, they must ascertain both evolving threats and potential losses. For example, as banks added iPhone apps, the risk of an iPhone being stolen became relevant, thus impacting app design.

Notification laws exist already in just about all jurisdictions. The proposed banking regulation does not say what the regulator will do with the information or how it will be safeguarded. A premature release can harm ongoing investigations.

Most modern banks outside the United States already use two-factor authentication for employee access, and many require two-factor authentication for customer access.

That last one is a big deal. Encrypting data in flight (e.g., transmissions from one computer to another) protects against eavesdroppers. At the same time, absent other controls, encryption can obscure data exfiltration (information theft). Banks currently have many tools that rely on certain transmissions being “in the clear”, and it may require some redesign of communication paths to address both the encryption in flight requirement and auditing needs. Some information is simply impractical today to encrypt in flight. This includes discovery protocols such as DHCP, name service exchanges (DNS), and certain other network functions. To encrypt much of this information would require yet lower layer protection such as IEEE 802.1AE (MACSEC) hop-by-hop encryption. The regulation is, again, vague on precisely what is necessary. One thing is clear, however: their definition of non-public information is quite broad.

To meet the “data at rest” requirement banks will either have to employ low level disk encryption or higher level object-level encryption. Low level encryption protects against someone stealing a disk or taking it from the trash and reading it, but provides very little protection against someone breaking into a computer when the disk is still spinning. Moreover, banks generally have rules about crushing disks before they can leave a data center. Requiring data at rest to be encrypted in data centers may not provide much risk mitigation. While missing laptops have repeatedly been a source data breaches, how often has a missing data center disk caused a breach?

Object-level encryption, or the encryption of groups of information elements (think Email messages) can provide strong protection should devices be broken into. Object-level encryption is particularly interesting because if done right, it can address both data in flight and data at rest. The challenge with object-level encryption is that the tools for it are quite limited. While there are some tools such as email message encryption, and while there are various ways one can use existing general purpose mechanisms such as OpenSSL to encrypt objects at rest, on object-level encryption remains a challenge because it must be implemented at the application level across all applications. Banks may have tens of thousands of applications running at any one time.

This is an instance where the financial industry could be a technology leader. However, all such development must be grounded in a proper risk assessment. Otherwise we end up in a situation where banks will have expended enormous amounts of resources without having substantially improved security.

Looming wireless problems with IoT security

Security experts have two common laments:

Security is an afterthought, and
Security is hard to get right.

No place else has this been more true than in wireless security, where it took the better part of two decades to get us to where we are today. “Wireless” can mean many different things. It could mean 3G cellular service or Wifi or Bluetooth or something else. In the context of Wifi, we have standards such as WPA Personal and WPA Enterprise that were developed at the IEEE. Similarly, 3GPP has developed secure access standards for your phone through the use of a SIM card. With either WPA Enterprise or 3G, you can bet that if your device starts to misbehave, it can be uniquely identified.

Unfortunately that’s not so much the case with other wireless standards, and in particular for IEEE’s 802.15.4, where security has for the time being been largely left to higher layers. And that’s just fine if what we’re talking about is your Bluetooth keyboard. But it’s not fine at all if we’re talking large number of devices, where one of them is misbehaving.

mesh-insecurity

Here we have a lighting network. It might consist of many different light bulbs. Maybe hundreds. Now imagine a bad guy breaking into one of those devices and attacking the others. Spot the bad guy. In a wired world, assuming you have access to the switch, you can spot the device simply by looking at which port a connection came into. But this is wireless, and mesh wireless at that. In the case where each device has its own unique key, you can trace per session per device. But if all devices use a shared key, you need to find other means. A well hacked device isn’t going to give you many clues; it’s going to try to mimic a device that isn’t hacked, perhaps one that isn’t turned on or one that doesn’t even exist.

These attacks can be varied in nature. If the mesh is connected to other networks, like enterprise networks, then attacks can be aimed at resources on those networks. This might range from a form of a so-called “Snow Shoe” attack, where no one device generates a lot of traffic but the aggregate of hacked devices overwhelm a target, to something more destructive, like attempts to reconfigure critical infrastructure.

Some attacks aren’t even intended as such, as Raul Rojas discovered in 2009, when a single light bulb took down his IoT-enabled house.

What to do?

The most obvious thing to do is not to get into this situation in the first place. From a traceability standpoint, network managers need to be able to identify the source of attacks. Having unique wireless sessions between leaf and non-leaf nodes that are bound to source addresses is ideal. Alternatively, all communications in a mesh could tunnel to non-leaf nodes that have strong diagnostic capabilities, like IPFIX and port spanning. At that point administrators can at least log traffic to determine the source of attacks. That’s a tall order for a light bulb, but it’s why companies like Cisco exist- to protect your infrastructure.

If none of these alternatives exist, poor network administrators (who might just be home owners like Mr. Rojas) are forced into a position where they might need to consider the entire mesh a single misbehaving device, and disconnect it from the network. And even that might not do the job: a smart piece of malware might notice and quiet itself until it can determine that the mesh has been re-connected.

Some careful thought is required as these capabilities develop.

Comey and Adult Conversations About Encryption

What does an adult conversation over encryption look like? To start we need to understand what Mr. Comey is seeking. Then we can talk about the risks.

AP and others are reporting that FBI director James Comey has asked for “an adult conversation about encryption.” As I’ve previously opined, we need just such a dialog between policy makers, the technical community, and the law enforcement community, so that the technical community has a clear understanding of what it is that investigators really want, and policy makers and law enforcement have a clear understanding of the limits of technology. At the moment, however, it cannot be about give and take. Just as no one cannot legislate that π = 3, no one can legislate that lawful intercept can be done in a perfectly secure way. Mr. Comey’s comments do not quite seem to grasp that notion. At the same time, some in the technical community do not want to give policy makers to even evaluate the risks for themselves. We have recently seen stories of the government stockpiling malware kits. This should not be too surprising, given that at the moment there are few alternatives to accomplish their goals (whatever they are).

So where to start? It would be helpful to have from Mr. Comey and friends a concise statement as to what access they believe they need, and what problem they think they are solving with that access. Throughout All of This, such a statement has been conspicuous in its absence. In its place we have seen sweeping assertions about grand bargains involving the Fourth Amendment. We need to be specific about what the actual demand from the LI community is before we can have those sorts of debates. Does Mr. Comey want to be able to crack traffic on the wire? Does he want access to end user devices? Does he want access to data that has been encrypted in the cloud? It would be helpful for him to clarify.

Once we have such a statement, the technical community can provide a view as to what the risks of various mechanisms to accomplish policy goals are. We’ve assuredly been around the block on this a few times. The law enforcement community will never obtain a perfect solution. They may not need perfection. So what’s good enough for them and what is safe enough for the Internet? How can we implement such a mechanism in a global context? And how would the mechanism be abused by adversaries?

The devil is assuredly in the details.

Hilary Clinton: A little improvement over making America break again

HIllary Clinton Many of us have experienced loss in our lives, and we get hit with the cruel irony that we don’t know what we’ve got until it’s gone. We Americans like complaining. To be sure there is plenty to complain about. You have your own list; I won’t write one for you. But things can get a lot worse for Americans than they are.

Donald Trump looks up to President Putin and envies China, because he sees an uncontested leader and hunger to win, regardless of rules, respectively. But that doesn’t mean we want to live in those countries, where people are subject to arrest without cause, where one cannot say what wants to say. These are countries that operate by the rule of man (and I do mean “man”) and not the rule of law, where might makes right, and where the ends justify the means. Putin took the Crimea because he could. He imprisoned and poisoned his opposition because he could. He has interfered with an American election because he could. China violates intellectual property rules and builds islands in the Pacific because they can. These are the ones Trump looks up to.

The American ideal is different. We don’t believe in kings, and we surely do not believe in thugs. We like our freedom, where government acts on the will of the People and not the will of an individual, and where it is constrained not only by the People, but by those who we elect through their oaths to uphold the Constitution, a document that guarantees freedom and fairness, that a person won’t be treated different because of sex, race, or religion. Our ideal extends the Constitution to cover other innate characteristics, such as sexual orientation. Fairness is something we hold dear.

I do not believe that Donald Trump understands any of this. He has spent his life cheating people out of money. To him, the ends will always justify the means. To him, the art of the deal is a matter of deceit, and knowing when to violate its terms. And he does so as long as he can get away with it. An agreement to him only binds him until he finds it inconvenient. Donald Trump will never deliver on his promises, and we know this because of all the broken promises of his past. He is vindictive, and spews hatred towards others. He does not know how to delegate responsibility, and he does not know how to accept responsibility for his mistakes. According to Trump, he’s never made a mistake.

Hillary Clinton lacks the charisma of her husband. She is not a visionary like Bernie Sanders. She is an incrementalist. She is a policy wonk, and she’s a bit nerdish. She will be challenged by a vociferous and resentful opposition. Under a President Hillary Clinton we will not see a Democratic House of Representatives. That will never be her mission. What we will see is steady leadership. Mostly status quo. Status quo means that we get mostly what we have.

And we have quite a lot. We have freedom. We have a functioning, if imperfect, support infrastructure. We have an innovative society. We have democracy. We have checks and balances. We have the right to practice whatever religion we want, so long as we don’t hurt others. Under a President Clinton we would have humility in leadership, and someone who is serious about trying to take a great America and make it better; not by a lot, but at least in the right direction. She is the type that will work to fix the potholes and leaks in the roofs. And she won’t promise more.

She will also deal honestly and ably with what crises hit her. No president is defined by his or her campaign platform, but rather how they react to the problems that are thrown at them. Hillary Clinton will do that will a cool head. We cannot say the same about Trump.

Image Courtesy: Gage Skidmore from Peoria, AZ, USA – Hillary Clinton, CC BY-SA 2.0

Guns and Gun Control: The Numbers Are Beginning To Add Up

Drawing_from_holster Many people have made the claim that they need to own guns to protect themselves, that they can’t leave it to police to protect them, the enormous assumption being that a gun actually does offer some protection. There are a number of scholarly works to test that assertion.

A longitudinal study by Johns Hopkins and Berkeley published in 2015 the American Journal of Public Health shows that Connecticut’s Permit to Purchase law reduced firearm homicide by 40%.
A separate Johns Hopkins study showed that firearm suicide rates in Connecticut dropped 15.4% after that law was passed, while Missouri’s firearm suicide rate increased by 16.1% after they repealed gun control legislation. There was also a lower than expected overall suicide rate in Connecticut.
Missouri also saw a 25% increase in homicides after their background check law was repealed.
An earlier CDC study published in 2004 in the Journal of American Epidemiology showed that simply having a gun in the home, regardless of how it is stored, increases the odds of death by firearm by a factor of 1.9.
A more recent meta-study by Harvard researchers in the Annals of Internal Medicine showed an increase risk of both suicide and homicide in homes where guns are present. In particular, that study found that homicide victimization rates were slightly higher for those who had guns in their homes than those who did not.
A 2011 CMU study did show that having a gun in the home seems to deter certain planned crimes such as burglary, but has no effect for unplanned crimes. Furthermore, it showed that only having a gun in the home does not provide the deterrence, but that this fact needs to be somehow brought to the attention of the burglar.

Summing up: studies thus far demonstrate that having a gun in the house increases the chances of someone in that house dying by firearm, it increases the risk of suicide, and it does not prevent a crime of passion, although it may deter a burglary. More analysis is needed. It is likely, for instance, that the type of gun matters. A lot of studies are needed about open carry laws. Still, if you think a gun offers you any sort of protection against others, consider the risks.

Image courtesy of aliengearholsters.com.