Data protection predictions for 2021

2020 presented us with many surprises, but the world of data privacy somewhat bucked the trend. Many industry verticals suffered losses, uncertainty and closures, but the protection of individuals and their information continued to truck on.

data protection 2021

After many websites simply blocked access unless you accepted their cookies (now deemed unlawful), we received clarity on cookies from the European Data Protection Board (EDPB). With the ending of Privacy Shield, we witnessed the cessation of a legal basis for cross border data transfers.

Severe fines levied for General Data Protection Regulation (GDPR) non-compliance showed organizations that the regulation is far from toothless and that data protection authorities are not easing up just because there is an ongoing global pandemic.

What can we expect in 2021? Undoubtedly, the number of data privacy cases brought before the courts will continue to rise. That’s not necessarily a bad thing: with each case comes additional clarity and precedent on many different areas of the regulation that, to date, is open to interpretation and conjecture.

Last time I spoke to the UK Information Commissioner’s Office regarding a technicality surrounding data subject access requests (DSARs) submitted by a representative, I was told that I was far from the only person enquiring about it, and this only illustrates some of the ambiguities faced by those responsible for implementing and maintaining compliance.

Of course, this is just the GDPR. There are many other data privacy legislative frameworks to consider. We fully expect 2021 to bring full and complete alignment of the ePrivacy Regulations with GDPR, and eradicate the conflict that exists today, particularly around consent, soft opt-in, etc., where the GDPR is very clear but the current Privacy and Electronic Communication Regulation (PECR) not quite so much.

These are just inside Europe but across the globe we’re seeing continued development of data localization laws, which organizations are mandated to adhere to. In the US, the California Consumer Privacy Act (CCPA) has kickstarted a swathe of data privacy reforms within many states, with many calls for something similar at the federal level.

The following year(s) will see that build and, much like with the GDPR, precedent-setting cases are needed to provide more clarity regarding the rules. Will Americans look to replace the shattered Privacy Shield framework, or will they adopt Standard Contractual Clauses (SCCs) more widely? SCCs are a very strong legal basis, providing the clauses are updated to align with the GDPR (something else we’d expect to see in 2021), and I suspect the US will take this road as the realization of the importance of trade with the EU grows.

Other noteworthy movements in data protection laws are happening in Russia with amendments to the Federal Law on Personal Data, which is taking a closer look at TLS as a protective measure, and in the Philippines, where the Personal Data Protection Act 2021 (PDPA) is being replaced by a new bill (currently a work in progress, but it’s coming).

One of the biggest events of 2021 will be the UK leaving the EU. The British implementation of the GDPR comes in the form of the UK Data Protection Bill 2018. Aside from a few deregulations, it’s the GDPR and that’s great… as far as it goes. Having strong local data privacy laws is good, but after enjoying 47 years (at the time of writing) of free movement within the Union, how will being outside of the EU impact British business?

It is thought and hoped that the UK will be granted an adequacy decision fairly swiftly, given that historically local UK laws aligned with those inside the Union, but there is no guarantee. The uncertainty around how data transfers will look in future might result in the British industry using more SCCs. The currently low priority plans to make Binding Corporate Rules (BCR) easier and more affordable will come sharply to the fore as the demand for them goes up.

One thing is certain, it’s going to be a fascinating year for data privacy and we are excited to see clearer definitions, increased certification, precedent-setting case law and whatever else unfolds as we continue to navigate a journey of governance, compliance and security.

Compliance activities cost organizations $3.5 million annually

Organizations are struggling to keep up with IT security and privacy compliance regulations, according to a Telos survey.

compliance cost

Annual compliance cost

The survey, which polled 300 IT security professionals in July and August 2020, revealed that, on average, organizations must comply with 13 different IT security and/or privacy regulations and spend $3.5 million annually on compliance activities, with compliance audits consuming 58 working days each quarter.

As more regulations come into existence and more organizations migrate their critical systems, applications and infrastructure to the cloud, the risk of non-compliance and associated impact increases.

Key research findings

  • IT security professionals report receiving an average of over 17 audit evidence requests each quarter and spend an average of three working days responding to a single request
  • Over the last 24 months, organizations have been found non-compliant an average of six times by both internal and third party auditors resulting in an average of eight fines, costing an average of $460,000
  • 86 percent of organizations believe compliance would be an issue when moving systems, applications and infrastructure to the cloud
  • 94 percent of organizations report they would face challenges when it comes to IT security compliance and/or privacy regulations in the cloud

Compliance teams are overwhelmed

“Compliance teams spend 232 working days each year responding to audit evidence requests, in addition to the millions of dollars spent on compliance activities and fines,” said Dr. Ed Amoroso, CEO of TAG Cyber. “The bottom line is this level of financial and time commitment is unsustainable in the long run.”

“As hammer, chisel and stone gave way to clipboard, paper and pencil, it’s time for organizations to realize the days of spreadsheets for ‘checkbox compliance’ are woefully outdated,” said Steve Horvath, VP of strategy and cloud at Telos.

Automation can solve numerous compliance challenges, as the data shows. It’s the only real way to get in front of curve, rather than continuing to try and keep up.”

99 percent of survey respondents indicated their organization would benefit from automating IT security and/or privacy compliance activities, citing expected benefits such as increased accuracy of evidence (54 percent), reduced time spent being audited (51 percent) and the ability to respond to audit evidence requests more quickly (50 percent).

CPRA: More opportunity than threat for employers

Increasingly demanded by consumers, data privacy laws can create onerous burdens on even the most well-meaning businesses. California presents plenty of evidence to back up this statement, as more than half of organizations that do business in California still aren’t compliant with the California Consumer Privacy Act (CCPA), which went into effect earlier this year.

CPRA

As companies struggle with their existing compliance requirements, many fear that a new privacy ballot initiative – the California Privacy Rights Act (CPRA) – could complicate matters further. While it’s true that if passed this November, the CPRA would fundamentally change the way businesses in California handle both customer and employee data, companies shouldn’t panic. In fact, this law presents an opportunity for organizations to change their relationship with employee data to their benefit.

CPRA, the Californian GDPR?

Set to appear on the November 2020 ballot, the CPRA, also known as CCPA 2.0 or Prop 24 (its name on the ballot), builds on what is already the most comprehensive data protection law in the US. In essence, the CPRA will bring data protection in California nearer to the current European legal standard, the General Data Protection Regulation (GDPR).

In the process of “getting closer to GDPR,” the CCPA would gain substantial new components. Besides enhancing consumer rights, the CPRA also creates new provisions for employee data as it relates to their employers, as well as data that businesses collect from B2B business partners.

Although controversial, the CPRA is likely to pass. August polling shows that more than 80% of voters support the measure. However, many businesses do not. This is because, at first glance, the CPRA appears to create all kinds of legal complexities in how employers can and cannot collect information from workers.

Fearful of having to meet the same demanding requirements as their European counterparts, many organizations’ natural reaction towards the prospect of CPRA becoming law is fear. However, this is unfounded. In reality, if the CPRA passes, it might not be as scary as some businesses think.

CPRA and employment data

The CPRA is actually a lot more lenient than the GDPR in regard to how it polices the relationship between employers and employees’ data. Unlike for its EU equivalent, there are already lots of exceptions written into the proposed Californian law acknowledging that worker-employer relations are not like consumer-vendor relations.

Moreover, the CPRA extends the CCPA exemption for employers, set to end on January 1, 2021. This means that if the CPRA passes into law, employers would be released from both their existing and potential new employee data protection obligations for two more years, until January 1, 2023. This exemption would apply to most provisions under the CPRA, including the personal information collected from individuals acting as job applicants, staff members, employees, contractors, officers, directors, and owners.

However, employers would still need to provide notice of data collection and maintain safeguards for personal information. It’s highly likely that during this two-year window, additional reforms would be passed that might further ease employer-employee data privacy requirements.

Nonetheless, employers should act now

While the CPRA won’t change much overnight, impacted organizations shouldn’t wait to take action, but should take this time to consider what employee data they collect, why they do so, and how they store this information.

This is especially pertinent now that businesses are collecting more data than ever on their employees. With companies like the workplace monitoring company Prodoscore reporting that interest from prospective customers rose by 600% since the pandemic began, we are seeing rapid growth in companies looking to monitor how, where, and when their employees work.

This trend emphasizes the fact that the information flow between companies and their employees is mostly one-sided (i.e., from the worker to the employer). Currently, businesses have no legal requirement to be transparent about this information exchange. That will change for California-based companies if the CPRA comes into effect and they will have no choice but to disclose the type of data they’re collecting about their staff.

The only sustainable solution for impacted businesses is to be transparent about their data collection with employees and work towards creating a “culture of privacy” within their organization.

Creating a culture of privacy

Rather than viewing employee data privacy as some perfunctory obligation where the bare minimum is done for the sake of appeasing regulators, companies need to start thinking about worker privacy as a benefit. Presented as part of a benefits package, comprehensive privacy protection is a perk that companies can offer prospective and existing employees.

Privacy benefits can include access to privacy protection services that give employees privacy benefits beyond the workplace. Packaged alongside privacy awareness training and education, these can create privacy plus benefits that can be offered to employees alongside standard perks like health or retirement plans. Doing so will build a culture of privacy which can help companies ensure they’re in regulatory compliance, while also making it easier to attract qualified talent and retain workers.

It’s also worth bearing in mind that creating a culture of privacy doesn’t necessarily mean that companies have to stop monitoring employee activity. In fact, employees are less worried about being watched than they are by the possibility of their employers misusing their data. Their fears are well-founded. Although over 60% of businesses today use workforce data, only 3 in 10 business leaders are confident that this data is treated responsibly.

For this reason, companies that want to keep employee trust and avoid bad PR need to prioritize transparency. This could mean drawing up a “bill of rights” that lets employees know what data is being collected and how it will be used.

Research into employee satisfaction backs up the value of transparency. Studies show that while only 30% of workers are comfortable with their employer monitoring their email, the number of employees open to the use of workforce data goes up to 50% when the employer explains the reasons for doing so. This number further jumps to 92% if employees believe that data collection will improve their performance or well-being or come with other personal benefits, like fairer pay.

On the other hand, most employees would leave an organization if its leaders did not use workplace data responsibly. Moreover, 55% of candidates would not even apply for a job with such an organization in the first place.

Final thoughts

With many exceptions for workplace data management already built-in and more likely to come down the line, most employers should be able to easily navigate the stipulations CPRA entails.

That being said, if it becomes law this November, employers shouldn’t misuse the two-year window they have to prepare for new compliance requirements. Rather than seeing this time as breathing space before a regulatory crackdown, organizations should instead use it to be proactive in their approach to how they manage their employees’ data. As well as just ensuring they comply with the law, businesses should look at how they can turn employee privacy into an asset.

As data privacy stays at the forefront of employees’ minds, businesses that can show they have a genuine privacy culture will be able to gain an edge when it comes to attracting and retaining talent and, ultimately, coming out on top.

Technologies that enable legal and compliance leaders to spot innovations

COVID-19 has accelerated the push toward digital business transformation for most businesses, and legal and compliance leaders are under pressure to anticipate both the potential improvements and possible risks that come with new legal technology innovations, according to Gartner.

legal technology innovations

Legal technology innovations

To address this challenge, Gartner lists the 31 must watch legal technologies to allow legal and compliance leaders to identify innovations that will allow them to act faster. They can use this information for internal planning and prioritization of emerging innovations.

“Legal and compliance leaders must collaborate with other stakeholders to garner support for organization wide and function wide investments in technology,” said Zack Hutto, director in the Gartner Legal and Compliance practice.

“They must address complex business demand by investing in technologies and practices to better anticipate, identify and manage risks, while seeking out opportunities to contribute to growth.”

Analysts said enterprise legal management (ELM), subject rights requests, predictive analytics, and robotic process automation (RPA) are likely to be most beneficial for the majority of legal and compliance organizations within a few years. They are also likely to help with the increased need for cost optimization and unplanned legal work arising from the pandemic.

Enterprise legal management

This is a multifaceted market where several vendors are trying to consolidate many of the technologies on this year’s Hype Cycle into unified platforms and suites to streamline the many aspects of corporate governance.

“Just as enterprise resource planning (ERP) overhauled finance, there is promise for a foundational system of record to improve in-house legal operations and workflows,” said Mr. Hutto. “Legal leaders should take a lesson from ERP’s evolution: ‘monolithic’ IT systems tend to lack flexibility and can quickly become an anchor not a sail.”

Legal application leaders and general counsel must begin with their desired business outcomes, and only then find a technology that can help deliver those outcomes.

Subject rights requests

The demand for subject rights requests (SRRs) is growing along with the number of regulations that enshrine a data subject’s right to access their data and request amendment or deletion. Current regulations include the CCPA in the U.S., the EU’s GDPR and Brazil’s Lei Geral de Proteção de Dadosis.

Many organizations are funneling their subject access requests (SARs) through internal legal counsel to limit the potential exposure to liability. This is costing, on average, $1,406 per SAR.

“In the face of rising request volumes and significant costs, there is great potential for legal and compliance leaders to make substantial savings and free up time by using technology to automate part, if not most, of the SRR workflow,” said Mr. Hutto.

Predictive analytics

This is a well-established technology and the market is mature, so it can be relatively simple to use “out-of-the-box” or via a cloud service. Typically, the technology can examine data or content to answer the question, ”What is likely to happen if…?”

“Adoption of this technology in legal and compliance is typically less mature than other business functions,” said Mr. Hutto. “This likely means untapped use cases where existing solutions could be used in the legal and compliance context to offer some real benefits.

“While analytics platforms may make data analysis more ‘turnkey’ extracting real insights may be more elusive. Legal and compliance leaders still should consider and improve the usefulness of their data, the capabilities of their teams, and the attainability of data in various existing systems.”

Robotic process automation (RPA)

RPA’s potential to streamline workflows for repetitive, rule-based tasks is already well-established in other business functions. Typically, RPA is best suited to systems with a standardized — often legacy — user interfaces for which scripts can be written.

“Where legal departments already use these types of systems it is likely that RPA can drive higher efficiency,” said Mr. Hutto. “However, not all legal departments use such systems. If not, it could make sense to take a longer view and consider investing in systems that have automation functionality built in.”

Gartner advice is to consider these four technologies is not solely based on their position on the Hype Cycle. Legal and compliance leaders should focus on the technologies that have the most potential for driving the greatest transformation within their own organizations in the near to medium term; the position on the Hype Cycle is part of that but not the whole story.

For example, Mr. Hutto said blockchain is a technology that has the potential to make a successful journey to the Plateau of Productivity within five years. But for now, its application will likely be limited to quite a narrow set of use cases, and it is unlikely to be transformational for corporate legal and compliance leaders.

Why are certain employees more likely to comply with information security policies than others?

Information security policies (ISP) that are not grounded in the realities of an employee’s work responsibilities and priorities expose organizations to higher risk for data breaches, according to a research from Binghamton University, State University of New York.

information security policies

The study’s findings, that subcultures within an organization influence whether employees violate ISP or not, have led researchers to recommend an overhaul of the design and implementation of ISP, and to work with employees to find ways to seamlessly fit ISP compliance into their day-to-day tasks.

“The frequency, scope and cost of data breaches have been increasing dramatically in recent years, and the majority of these cases happen because humans are the weakest link in the security chain. Non-compliance to ISP by employees is one of the important factors,” said Sumantra Sarkar, associate professor of management information systems in Binghamton University’s School of Management.

“We wanted to understand why certain employees were more likely to comply with information security policies than others in an organization.”

How subcultures influence compliance within healthcare orgs

Sarkar, with a research team, sought to determine how subcultures influence compliance, specifically within healthcare organizations.

“Every organization has a culture that is typically set by top management. But within that, you have subcultures among different professional groups in the organization,” said Sarkar. “Each of these groups are trained in a different way and are responsible for different tasks.”

Sarkar and his fellow researchers focused on ISP compliance within three subcultures found in a hospital setting – physicians, nurses and support staff.

The expansive study took years to complete, with one researcher embedding in a hospital for over two years to observe and analyze activities, as well as to conduct interviews and surveys with multiple employees.

Because patient data in a hospital is highly confidential, one area researchers focused on was the requirement for hospital employees to lock their electronic health record (EHR) workstation when not present.

“Physicians, who are dealing with emergency situations constantly were more likely to leave a workstation unlocked. They were more worried about the immediate care of a patient than the possible risk of a data breach,” said Sarkar.

“On the opposite end, support staff rarely kept workstations unlocked when they were away, as they felt they were more likely to be punished or fired should a data breach occur.”

The conclusion

Researchers concluded that each subculture within an organization will respond differently to the organization-wide ISP, leaving organizations open to a higher possibility of data breaches.

Their recommendation – consult with each subculture while developing ISP.

“Information security professionals should have a better understanding of the day-to-day tasks of each professional group, and then find ways to seamlessly integrate ISP compliance within those job tasks,” said Sarkar. “It is critical that we find ways to redesign ISP systems and processes in order to create less friction.”

In the context of a hospital setting, Sarkar recommends touchless, proximity-based authentication mechanisms that could lock or unlock workstations when an employee approaches or leaves a workstation.

Researchers also found that most employees understand the value of ISP compliance, and realize the potential cost of a data breach. However, Sarkar believes that outdated information security policies’ compliance measures have the potential to put employees in a conflict of priorities.

“There shouldn’t be situations where physicians are putting the entire hospital at risk for a data breach because they are dealing with a patient who needs emergency care,” he said. “We need to find ways to accommodate the responsibilities of different employees within an organization.”

Only 27.9% of organizations able to maintain compliance with the PCI DSS

Global organizations continue to put their customers’ cardholder data at risk due to a lack of long term payment security strategy and execution, flags the Verizon report.

maintain compliance PCI DSS

With many companies struggling to retain qualified CISOs or security managers, the lack of long-term security thinking is severely impacting sustained compliance within the Payment Card Industry Data Security Standard (PCI DSS).

Cybercriminals still mostly targeting payment data

Payment data remains one of the most sought after and lucrative targets by cybercriminals with 9 out of 10 data breaches being financially motivated, as highlighted by the report. Within the retail sector alone, 99 percent of security incidents were focused on acquiring payment data for criminal use.

On average only 27.9 percent of global organizations maintained full compliance with the PCI DSS, which was developed to help businesses that offer card payment facilities protect their payment systems from breaches and theft of cardholder data.

More concerning, this is the third successive year that a decline in compliance has occurred with a 27.5 percentage point drop since compliance peaked in 2016.

“Unfortunately we see many businesses lacking the resources and commitment from senior business leaders to support long-term data security and compliance initiatives. This is unacceptable,” said Sampath Sowmyanarayan, President, Global Enterprise, Verizon Business.

“The recent coronavirus pandemic has driven consumers away from the traditional use of cash to contactless methods of payment with payment cards as well as mobile devices. This has generated more electronic payment data and consumers trust businesses to safeguard their information.

“Payment security has to be seen as an on-going business priority by all companies that handle any payment data, they have a fundamental responsibility to their customers, suppliers and consumers.”

Few organizations successfully test security systems

Additional findings shine a spotlight on security testing where only 51.9 percent of organizations successfully test security systems and processes as well as unmonitored system access and where approximately two-thirds of all businesses track and monitor access to business critical systems adequately.

In addition, only 70.6 percent of financial institutions maintain essential perimeter security controls.

“This report is a welcome wake-up call to organizations that strong leadership is required to address failures to adequately manage payment security. The Verizon Business report aligns well with Omdia’s view that the alignment of security strategy with organizational strategy is essential for organizations to maintain compliance, in this case with PCI DSS 3.2.1 to provide appropriate levels of payment security.

“It makes clear that long-term data security and compliance combines the responsibilities of a number of roles, including the Chief Information Security Officer, the Chief Risk Officer, and Chief Compliance Officer, which Omdia concurs with,” comments Maxine Holt, senior research director at Omdia.

maintain compliance PCI DSS

Difficulty to maintain PCI DSS compliance impacts all businesses

SMBs were flagged as having their own unique struggles with securing payment data. While smaller businesses generally have less card data to process and store than larger businesses, they have fewer resources and smaller budgets for security, impacting the resources available to maintain compliance with PCI DSS.

Often the measures needed to protect sensitive payment card data are perceived as too time-consuming and costly by these smaller organizations, but as the likelihood of a data breach for SMBs remains high it is imperative that PCI DSS compliance is maintained.

The on-going CISO challenge: Security strategy and compliance

The report also explores the challenges CISOs face in designing, implementing and maintaining an effective and sustainable security strategy, and how these can ultimately contribute to the breakdown of compliance and data security management.

These problems were not found to be technological in nature, but as a result of organizational weaknesses which could be resolved by more mature management skills including creating formalized processes; building a business model for security as well as defining a sound security strategy with operating models and frameworks.

Priorities and technologies defining the mainframe in the digital enterprise

There’s an overwhelming support for mainstreaming the mainframe, new strategic priorities, and a resurgence of next generation mainframe talent, according to a BMC survey.

mainframe priorities

The study queried over 1000 executives and practitioners on their priorities, challenges, and growth opportunities for the platform. High-level insights include:

  • 90% of respondents see the mainframe as a platform for growth and long-term applications.
  • 68% expect MIPS, the mainframe’s measure of computing performance, to grow.
  • 63% of respondents say security and compliance were their top mainframe priorities.
  • More than half of survey respondents increased mainframe platform data and transaction volume by 25% or more, signaling its ongoing importance in the digital business environment.

“The Mainframe Survey validates that businesses see the mainframe as a critical component of the modern digital enterprise and an emerging hub for innovation,” says Stephen Elliot, Program VP, Management Software and DevOps, IDC.

“They’re putting it to work more and more to support digital business demands as they strive to achieve greater agility and success across the enterprise.”

Top mainframe priorities

With mainframe enterprises competing to bring new, digital experiences to market to delight customers, the survey’s themes are resoundingly strong: adapt, automate, and secure.

Adapt – responses indicated that enterprises’ need to adapt spanned several areas:

  • New processes to keep up with digital demand.
  • Technology demands such as application development/DevOps across the mainframe; 78% of respondents want to be able to update mainframe applications more frequently than currently possible.
  • Changing workforce, as the number of next generation mainframe talent increases along with the number of women working on the platform.

Automate – mainframe modernization continues to play a key role in priorities among respondents with the need to implement AI and machine learning strategies jumping by 8% year over year.

Secure – while the mainframe has a reputation of being a naturally secure platform, respondents are seeing the growing need to fortify its “walls.” Security trumped cost optimization as the leading mainframe priority among respondents for the first time in the 15-year history of the survey.

“Early results were shared with leading industry analysts and key customers from our Mainframe Executive Council in order to validate findings with market sentiment,” states John McKenny, SVP of Mainframe Innovation and Strategy at BMC.

“These conversations further solidified the study’s findings that the platform’s positive outlook and growth is largely due to the need to create intuitive, customer-centric digital experiences. The mainframe continues to shine as innovative, agile, and secure and is a vital component to digital success.”

Workforce demographic shifts

The survey revealed the demographic shifts in mainframe operations, as younger, less experienced staff replaces departing senior staff, and a higher proportion of women respondents than last year.

Cybersecurity practices are becoming more formal, security teams are expanding

Organizations are building confidence that their cybersecurity practices are headed in the right direction, aided by advanced technologies, more detailed processes, comprehensive education and specialized skills, a research from CompTIA finds.

cybersecurity practices

Eight in 10 organizations surveyed said their cybersecurity practices are improving.

At the same time, many companies acknowledge that there is still more to do to make their security posture even more robust. Growing concerns about the number, scale and variety of cyberattacks, privacy considerations, a greater reliance on data and regulatory compliance are among the issues that have the attention of business and IT leaders.

Elevating cybersecurity

Two factors – one anticipated, the other unexpected – have contributed to the heightened awareness about the need for strong cybersecurity measures.

“The COVID-19 pandemic has been the primary trigger for revisiting security,” said Seth Robinson, senior director for technology analysis at CompTIA. “The massive shift to remote work exposed vulnerabilities in workforce knowledge and connectivity, while phishing emails preyed on new health concerns.”

Robinson noted that the pandemic accelerated changes that were underway in many organizations that were undergoing the digital transformation of their business operations.

“This transformation elevated cybersecurity from an element within IT operations to an overarching business concern that demands executive-level attention,” he said. “It has become a critical business function, on par with a company’s financial procedures.”

As a result, companies have a better understanding of what do about cybersecurity. Nine in 10 organizations said their cybersecurity processes have become more formal and more critical.

Two examples are risk management, where companies assess their data and their systems to determine the level of security that each requires; and monitoring and measurement, where security efforts are continually tracked and new metrics are established to tie security activity to business objectives.

IT teams foundational skills

The report also highlights how the “cybersecurity chain” has expanded to include upper management, boards of directors, business units and outside firms in addition to IT personnel in conversations and decisions.

Within IT teams, foundational skills such as network and endpoint security have been paired with new skills, including identity management and application security, that have become more important as cloud and mobility have taken hold.

On the horizon, expect to see skills related to security monitoring and other proactive tactics gain a bigger foothold. Examples include data analysis, threat knowledge and understanding the regulatory landscape.

Cybersecurity insurance is another emerging area. The report reveals that 45% of large companies, 41% of mid-sized firms and 37% of small businesses currently have a cyber insurance policy.

Common coverage areas include the cost of restoring data (56% of policy holders), the cost of finding the root cause of a breach (47%), coverage for third-party incidents (43%) and response to ransomware (42%).

Financial risk and regulatory compliance pros struggling with collaboration

After several months of working from home, with no clear end in sight, financial risk and regulatory compliance professionals are struggling when it comes to collaborating with their teams – particularly as they manage increasingly complex global risk and regulatory reporting requirements.

financial risk and regulatory compliance

According to a survey of major financial institutions conducted by AxiomSL, 41% of respondents said collaborating with teams remains a challenge while working remotely.

“During the pandemic, financial firms quickly adapted to major changes, although not without some operational and technology weaknesses emerging,” said Alex Tsigutkin, CEO AxiomSL.

“Indeed, businesses might never return to the ‘old normal’, and that has made building data- and technology-driven resilience much more pressing than before the crisis. Our clients have been experiencing heightened regulatory pressures,” he continued.

“Throughout the crisis, we enabled them to respond rapidly to changes in reporting criteria, the onset of daily liquidity reporting, and the Federal Reserve’s emerging risk data collection (ERDC) initiative – that required FR Y­–14 data on a weekly/monthly basis instead of quarterly.”

These data-intensive, high-frequency regulatory reporting requirements will continue in the ‘new normal.’ “To future-proof, organizations should continue to establish sustainable data architectures and analytics that enable connection and transparency between critical datasets,” Tsigutkin commented.

“And, as a priority, they should transition to our secure RegCloud to handle regulatory intensity efficiently, bolster business continuity, and strengthen their ability to collaborate remotely,” he concluded.

Key research findings

Remote collaboration is a top operational challenge for financial risk and regulatory pros: For all the talk of work-from-anywhere policies becoming the future of financial services, 41% of the risk and compliance professionals surveyed said collaborating with colleagues while working remotely has been their biggest challenge during the COVID-19 crisis.

This was the most frequently cited challenge, followed by accessing data from dispersed systems (18%), reliance on offshore resources (15%), and reliance on locally installed technology (15%).

Liquidity reporting expected to get harder: New capital and liquidity stress testing requirements are expected to present a much heavier burden on financial firms, with 18% of respondents citing increased capital and liquidity risk reporting as a major challenge they will face over the next two years.

Cloud adoption gets its catalyst: After years of resisting cloud adoption, many North American financial institutions are finally gearing up to make the move. When it comes to regulatory technology spending over the next two years, enhanced data analytics is the top area of focus among 29% of survey respondents. But cloud deployment rose to second place (23%) followed by data lakes (22%) and artificial intelligence and machine learning (20%).

Reduction of manual processes is an operational focus for the next two years: The top risk and regulatory compliance challenge firms see on the road ahead is continuing to eliminate manual processes (29%), followed by improving the transparency of data and processes (21%), and fully transitioning to a secure cloud (13%).

RegTech budgets largely intact heading into 2021: A total of 83% indicated their near-term projects as virtually unimpacted or mostly going forward. And similarly, 81% said their budgets for 2021 remain intact (70%) or will increase (11%).

GRC teams have a number of challenges meeting regulatory demands

Senior risk and compliance professionals within financial services company’s lack confidence in the security data they are providing to regulators, according to Panaseer.

GRC regulatory demands

Results from a global external survey of over 200+ GRC leaders reveal concerns on data accuracy, request overload, resource-heavy processes and lack of end-to-end automation.

The results indicate a wider issue with cyber risk management. If GRC leaders don’t have confidence in the accuracy and timeliness of security data provided to regulators, then the same holds true for the confidence in their own ability to understand and combat cyber risks.

41% of risk leaders feel ‘very confident’ that they can fulfill the security-related requests of a regulator in a timely manner. 27.5% are ‘very satisfied’ that their organization’s security reports align to regulatory compliance needs.

GRC leaders cited their top challenges in fulfilling regulator requests, as:

  • Getting access to accurate data (35%)
  • The number of report requests (29%)
  • The length of time it takes to get information from security team (26%)

The limitations of traditional GRC tools

The issue has been perpetuated by the limitations of traditional GRC tools, which rely on qualitative questionnaires to provide evidence of compliance. This does not reflect the current challenges from cyber.

92% of senior risk and compliance professionals believe it would be valuable to have quantitative security controls assurance reporting (vs qualitative) and 93.5% believe it’s important to automate security risk and compliance reporting. However, only 11% state that their risk and compliance reporting is currently automated end to end.

96% said it is important to prioritize security risk remediation based on its impact to the business, but most can’t isolate risk to critical business processes composed of people, applications, devices. Only 33.5% of respondents are ‘very confident’ in their ability to understand all the asset inventories.

GRC regulatory demands

Charaka Goonatilake, CTO, Panaseer: “Faced with increasing requests from regulators, GRC leaders have resorted to throwing a lot of people at time-sensitive requests. These manual processes combined with lack of GRC tool scalability necessitates data sampling, which means they cannot have complete visibility or full confidence in the data they are providing.

“The challenge is being exacerbated by new risks introduced by IoT sensors and endpoints, which rarely consider security a core requirement and therefore introduce greater risk and increase the importance of controls and mitigations to address them.”

Andreas Wuchner, Panaseer Advisory Board member: “To face the new reality of cyberthreats and regulatory pressures requires many organizations need to fundamentally rethink traditional tools and defences.

“GRC leaders can enhance their confidence to accurately and quickly meet stakeholder needs by implementing Continuous Controls Monitoring, an emerging category of security and risk, which has just been recognised in the 2020 Gartner Risk Management Hype Cycle.”

CISOs struggling to prep for security audits

Calendars for security and compliance audits are largely unchanged despite COVID-19, yet the pandemic is straining teams as they work remotely, according to Shujinko.

CISOs security audits

Moreover, CISOs are tasked with preparing for more than three audits on average in the next 6-12 months, but struggle with inadequate tools, limited budgets and personnel, and inefficient manual processes.

Furthermore, the results show that migration to the cloud is dramatically increasing the scope and complexity of audit preparation, obsoleting old methods and approaches.

“This survey clearly shows that CISOs at major companies are caught between a rock and hard place when it comes to security and compliance audits over the second half of 2020 and want automated tools to help dig them out. Unfortunately, they’re simply not able to find them,” said Scott Schwan, Shujinko CEO.

“Teams are cobbling together scripts, shared spreadsheets, ticketing systems and a hodgepodge of other applications to try to manage, resulting in inefficiency, lengthy preparation and limited visibility. More than two-thirds of CISOs are looking for something better.”

CISOs preparing for more than three audits

Despite changes in the economic climate due to COVID-19, CISOs are still tasked with preparing for more than three upcoming compliance audits across multiple security frameworks (e.g., PCI, SOC 2, NIST-CSF, ISO 27001, etc.).

Most common audits are for HITRUST, HIPAA and PCI DSS

51% of CISOs surveyed indicated they are preparing for a HITRUST audit in the next six to twelve months, 45% are preparing for HIPAA, 43% for PCI DSS, 41% for CCPA and 36% for an internal audit. In addition, 77% of companies preparing for SOC-2 audits were software companies.

CISOs are worried about doing more with less

COVID-19 has amplified CISOs’ concerns about doing more with less (both people and budget) with both teams and auditors working remotely. Worries over conflicting priorities, draining available resources and ensuring that evidence is complete round out their top five CISO concerns.

CISOs desperately want more automation

72% of security executives say they want to improve the automation of their audit preparation process, and automation was cited as the number one element most CISOs would change if they could. Team communication and collaboration rounded out the top three most desired improvements.

CISOs security audits

Two-thirds of CISOs dislike their current tool set

The survey found that CISOs are currently using a mix of home-grown scripts, spreadsheets, ticketing systems, shared documents, Sharepoint and e-mail to prepare for audits. No CISOs reported having a security audit preparation tool that they are completely satisfied with.

CISOs have poor visibility into the audit process

No CISOs rated visibility into key audit preparation steps a complete success and only one rated it a 4 out of 5 – suggesting poor executive line-of-sight into hitting audit deadlines.

Audit processes don’t fit a cloud development model

Only 1 percent of CISOs said that their audit preparation process completely aligns with the speed and agility that is needed for rapid cloud application development and frequent iteration.

Most compliance requirements are completely absurd

Compliance is probably one of the dullest topics in cybersecurity. Let’s be honest, there’s nothing to get excited about because most people view it as a tick-box exercise. It doesn’t matter which compliance regulation you talk about – they all get a collective groan from companies whenever you start talking about it.

compliance requirements

The thing is, compliance requirements are often being poorly written, vague and confusing. In my opinion, the confusion around compliance comes from the writing, so it’s no surprise companies are struggling, especially when they have to comply with multiple requirements simultaneously.

Poor writing is smothering compliance regulations

Take ISO 27001 as an example. Its goal is to improve a business’ information security management and its process has six-parts, which include commands like “conduct a risk assessment”, “define a security policy” and “manage identified risks”. The requirements for each of these commands are extremely vague and needlessly subjective.

The Sarbanes-Oxley Act (SOX), which covers all businesses in the United States, is no better. Section 404 vaguely says that all publicly traded organizations have to demonstrate “due diligence” in the disclosure of financial information, but then it does not explain what “due diligence” means.

The Gramm-Leach-Bliley Act (GLBA) requires US financial institutions to explain information-sharing practices to their customers. It says financial organizations have to “develop a written information security plan”, but then doesn’t offer any advice on how to achieve that.

Even Lexcel (an accreditation indicating quality in relation to legal practice management standards) in the United Kingdom, which is written by lawyers for lawyers, is not clear: “Practices must have an information management policy with procedures for the protection and security of the information assets.”

For a profession that prides itself on being able to maintain absolute clarity, I’m surprised Lexcel allows this type of subjectivity in its compliance requirements.

It’s not easy to write for such a wide audience

Look, I understand. It’s a pretty tricky job to write compliance requirements. It needs to be applicable to all organizations within a particular field, each of which will have their differences in the way they conduct business and how they’ve set up their technological infrastructure.

Furthermore, writers are working against the clock with compliance requirements. IT regulations are changing at such a quick pace that the requirements they write today might be out of date tomorrow.

However, I think those who write requirements should take the Payment Card Industry Data Security Standard (PCI DSS) as an example. The PCI DSS applies to all organizations that store cardholder data and the requirements are clear, regularly updated, and you can find everything you need in one place.

The way PCI DSS compliance is structured (in terms of requirement, testing procedures and guidance) is a lot clearer than anything else I’ve seen. It contains very little room for subjectivity, and you know exactly where you stand with it.

The GDPR is also pretty well written and detailed. The many articles referring to data protection are specific, understandable and implementable.

For example, when it comes to data access, this sentence is perfectly clear: “Unauthorized access also includes accidental or unlawful destruction, loss, alteration, or unauthorized disclosure of personal data transmitted, stored or otherwise processed” (Articles 4, 5, 23 and 32).

It’s also very clear when it comes to auditing processes: “You need to maintain a record of data processing activities, including information on ‘recipients to whom the personal data have been or will be disclosed’, i.e. whom has access to data” (Articles 5, 28, 30, 39, 47).

So, while you’re faced with many compliance requirements, you need to have a good strategy in place. However, it can get complex when you’re trying to comply with multiple mandates. If I can give you one tip, it is to find the commonalities between all of them, before coming up with a solution.

You need to do the basics right

In my opinion, the confusing nature of compliance only spawns the relentless bombardment of marketing material from vendors on “how you can be compliant with X” or the “top five things you need to know about Y”.

You have to understand that at the core of any compliance mandate is the desire to keep protected data secure, only allowing access to those who need it for business reasons. This is why all you need to do with compliance is to start with the basics: data storage, file auditing and access management. Get those right, and you’re on your way to demonstrating your willingness to comply.

2020 trends in SOX compliance

SOX & Internal Controls Professionals Group released a survey which measures the costs, execution, challenges and priorities faced by companies that comply with the Sarbanes-Oxley Act (SOX).

SOX compliance trends

“In its fifth year, our survey reflects the broad experience of SOX professionals over time and presents a balanced perspective of the current state of SOX and internal controls management,” said Camille Kearns Rudy, National Director of the SOX & Internal Controls (IC) Professionals Group.

“Importantly, the survey confirms that the C-suite views SOX as highly valuable in their organizations. This acknowledgement ensures that SOX will have access to institutional capital needed to thrive and be effective.”

Improving efficiency in the SOX function was the top priority for SOX/IC practitioners in 2020. One-third of respondents reported they spend more than half their time on SOX, and that finding new ways to reduce the complexity of the controls processes and the time spent on manual testing was key.

Many still relying on spreadsheets and desktop publishing tools

Forty-four percent of respondents said they will focus heavily on controls automation, which ushers in the need for intelligent, cloud-based technology.

More than half of the market currently uses a SOX-specific software to execute their SOX compliance program, but one-third still rely on spreadsheets and desktop publishing tools.

While upgrading technology has been a concern, but not a priority in previous years, the high-risk environment created by COVID-19 has sparked a renewed sense of urgency to make changes to existing technologies and processes.

Cybersecurity and IT controls have also historically been among the top three areas of concern for SOX/IC professionals. These too have received increased attention in 2020, as over half of write-in comments highlighted the impacts of remote working and the ability to execute compliance.

Data protection critical to keeping customers coming back for more

Although consumers remain concerned about sharing personal data with companies, the results of a Privitar survey highlight an opportunity for businesses to take a leadership role and build brand loyalty by protecting their customers.

customers data protection

The report found that more than three-quarters of respondents are concerned or very concerned about protecting their personal data, with 42 percent of consumers saying they wouldn’t share sensitive data (e.g. name, address, email address, phone number, location information, health information, banking information, social security number) with a business for any reason.

As consumers grow increasingly apprehensive when it comes to their data, business success will depend on an organizations’ ability to prioritize and successfully execute on privacy initiatives.

Disconnect between consumer sentiment and actions surrounding data protection

When it comes to the management of their data, many consumers aren’t fully aware of how brands are securing their personal information. According to the survey, 43 percent of consumers don’t know if they’ve worked with a business that has been impacted by a data breach.

When it comes to privacy notices, 28 percent admit to not reading privacy notices at all and 42 percent admitted to only skimming the text. These findings point to a growing sentiment that data privacy should be the responsibility of the business – not the customer. With this, businesses have a tremendous opportunity to make data privacy a differentiator and way to build long-term loyalty.

Pandemic creating more data sharing opportunities, still consumers are wary

Despite the growing advancements on the data protection front, 51 percent of consumers surveyed said they are still not comfortable sharing their personal information. One-third of respondents said they are most concerned about it being stolen in a breach, with another 26 percent worried about it being shared with a third party.

In the midst of the growing pandemic, COVID-19 tracking, tracing, containment and research depends on citizens opting in to share their personal data. However, the research shows that consumers are not interested in sharing their information.

When specifically asked about sharing healthcare data, only 27 percent would share health data for healthcare advancements and research. Another 21 percent of consumers surveyed would share health data for contact tracing purposes.

As data becomes more valuable to combat the pandemic, companies must provide consumers with more background and reasoning as to why they’re collecting data – and how they plan to protect it.

Upcoming U.S. elections driving consumer awareness of data privacy

Recently, there’s been increased conversation about data privacy and protection legislation across the United States, especially as the CCPA is enacted and the CDPSA awaits its fate in Congress.

As the debate grows louder across the nation, 73 percent of consumers think that there should be more government oversight at the federal and/or state/local levels. While legislation can take years to pass, it’s important for businesses to overhaul their technology and processes now to quickly address consumers’ concerns and keep business running.

Businesses must drive data privacy action

Companies rely on brand loyalty to keep their operations up and running. While often referring to affordable costs and personalization as a means to keeping business moving, many overlook the importance of instilling a more personal sense of trust within their customer base.

When working with a business, 40 percent of consumers think the brand’s trustworthiness is most important when it comes to brand loyalty and 31 percent say it’s the brand’s commitment to protecting their data.

Evenly matched up with the 30 percent of consumers who believe customer service matters most, the results prove that data protection is just as critical to keeping customers coming back for more.

However, broken trust and lost responsibility for protecting that data have severe consequences, with 24 percent saying they have either stopped doing business or done less business with a company after it was breached.

As markets grow increasingly competitive in a fluctuating economy, it’s critical for businesses to keep customer loyalty high – and as such, be more open and transparent with how they’re using personal data.

“The global COVID-19 pandemic has underscored the importance of the trust relationship companies and governments need to build with consumers in an increasingly digital world,” said Jason du Preez, CEO, Privitar.

“The results of the survey affirm the growing need for brands to focus on building and maintaining this trust, starting first and foremost with protecting customer data. As more businesses utilize the cloud to enable data driven insights, a firm commitment to data privacy will help to ensure long-term loyalty, consumer satisfaction and shareholder value.”

The state of GDPR compliance in the mobile app space

Among the rights bestowed upon EU citizens by the General Data Protection Regulation (GDPR) is the right to access their personal data stored by companies (i.e., data controllers) and information about how this personal data is being processed. A group of academics from three German universities has decided to investigate whether and how mobile app vendors respond to subject access requests, and the results of their four-year undercover field study are dispiriting.

The results of the study

“In three iterations between 2015 and 2019, we sent subject access requests to vendors of 225 mobile apps popular in Germany. Throughout the iterations, 19 to 26 % of the vendors were unreachable or did not reply at all. Our subject access requests were fulfilled in 15 to 53 % of the cases, with an unexpected decline between the GDPR enforcement date and the end of our study,” they shared.

“The remaining responses exhibit a long list of shortcomings, including severe violations of information security and data protection principles. Some responses even contained deceptive and misleading statements (7 to 13 %). Further, 9 % of the apps were discontinued and 27 % of the user accounts vanished during our study, mostly without proper notification about the consequences for our personal data.”

GDPR mobile

The researchers – Jacob Leon Kröger from TU Berlin (Weizenbaum Institute), Jens Lindemann from the University of Hamburg, and Prof. Dr. Dominik Herrmann from the University of Bamberg – made sure to test a representative sample of iOS and Android apps: popular and less popular, from a variety of app categories, and from vendors based in Germany, the EU, and outside of the EU.

They disguised themselves as an ordinary German user, created accounts needed for the apps to work, interacted with each app for about ten minutes, and asked app providers for information about their stored personal data (before and after GDPR enforcement).

They also used different a request text for each round of inquiries. The first one was more informal, while the last two were more elaborate and included references to relevant data protection laws and a warning that the responsible data protection authorities would be notified in the case of no response.

“While we cannot precisely determine their individual influence, it can be assumed that both the introduction of the GDPR as well as the more formal and threatening tone of our inquiry in [the latter two inquiries] had an impact on the vendors’ behavior,” they noted.

Solving the problem

Smartphones are ubiquitous and most users use a variety of mobile apps, which usually collect personal user data and share it with third parties.

In theory, the GDPR should force mobile app vendors to provide information about this data and how it’s used to users. In practice, though, many app vendors are obviously hoping that users won’t care enough about it and won’t make a stink when they don’t receive a satisfactory reply, and that GDPR regulators won’t have the resources to enforce the regulation.

“We (…) suspected that some vendors merely pretended to be poorly reachable when they received subject access requests – while others actually had insufficient resources to process incoming emails,” the researchers noted.

“To confirm this hypothesis, we tested how the vendors that failed to respond to our requests reacted to non-privacy related inquiries. Using another (different) fake identity, we emailed the vendors who had not replied [to the first inquiry] and [to the third inquiry], expressing interest in promoting their apps on a personal blog or YouTube channel. Out of the group of initial non-responders, 31 % [first inquiry] and 22 % [third inquiry] replied to these dummy requests, many of them within a few hours, proving that their email inbox was in fact being monitored.”

The researchers believe the situation for users can be improved by authorities doing random compliance checks and offering better support for data controllers through industry-specific guidelines and best practices.

“In particular, there should be mandatory standard interfaces for providing data exports and other privacy-related information to data subjects, obviating the need for the manual processing of GDPR requests,” they concluded.

Internal investigations are changing in the age of COVID-19

Internal investigations in corporations are typically conducted by the human resources (HR) department, internal compliance teams, and/or the IT department. Some cases may also require the involvement of outside third parties like forensic experts, consultants, law or accounting firms, or security experts.

internal investigations

These are often complex matters from a legal, process and technical perspective. Depending on the nature and extent of the potential misconduct, the stakes can be very high, with risks that include legal jeopardy, large fines or damages, negative publicity, and damage to company culture and morale. Speed and efficiency are vital: organizations need to understand the extent of the problem and act immediately to prevent further damage.

Key phases of an internal investigation

An internal investigation typically follows five key phases: a trigger event; a legal hold and custodian interviews; requests for data and data collection; processing, review and analysis of files; and the recommendation of next steps. COVID-19 and work-at-home requirements are most relevant to the second and third phases, in which interviews take place and data is requested and collected.

A trigger event kicks off an action from a legal, compliance, or investigative standpoint. While complaints to HR alleging discrimination or harassment based on race or gender are among the most common triggers of an internal investigation, other triggers include leaked or stolen intellectual property, whistle-blower complaints alleging fraud or compliance violations, the loss or theft of physical assets, or leaked or stolen data containing sensitive or personally identifiable information (PII).

In the next phase, legal hold and custodian interviews, the legal department must quickly perform an assessment of the veracity of the allegation(s) and the degree of risk involved, and then determine whether further investigative action is required. If a decision to continue is made, a legal hold is immediately put in place.

While some companies may be able to preserve information by working with their IT department without notifying the person(s) being investigated, in other cases the organization may need to send an official notification to the person(s) and ask for their cooperation in preserving information. The latter option is more common, especially in the age of COVID-19.

Initial interviews will often expand the scope of the investigation. A custodian may say, “I only worked on that project for a week; X was the driving force behind it,” or “I’ve only been with the company for a month, but Y and Z have been working on this since last year.” As the number of custodians grows, so does the number of devices to collect data from. Data locations and data types also have a tendency to multiply, with sources ranging from corporate email, text messages, file shares, and “loose” files stored on local devices or thumb drives to cloud storage like Office 365, Dropbox, Google Vault and even, in some cases, surveillance video.

After custodian interviews, it’s time for the request for and collection of data. The complexity at this stage depends to a large extent on the company’s information infrastructure. Especially during the pandemic, cloud-based data or work product saved in a virtual environment will be more straightforward to collect than on-premise data or data stored locally on a mobile device. Collection can become especially challenging with work-at-home requirements. A custodian may need to allow a forensics professional to access their device(s) at home. In other cases a device—which the custodian presumably needs to do their job—may need to be shipped.

Before COVID-19, an employee under investigation could be surprised with an on-the-spot collection at the office under the guise of an in-person meeting or “routine” request to bring in a device for an IT upgrade or a mandatory security update. Such strategies are much less likely to be practical or successful in a remote work environment. “At home” collection may also become impossible if the employee has opted to work from a second home or another location in a different region.

Employees using their own devices for remote work present a further complication. Devices like personal phones or tablets usually lack many of the security protections embedded in a company-provided mobile device and are therefore more vulnerable to malware, spyware, and co-mingled (personal and work-related) data. The data is also much more likely to be accessible by family and friends, increasing the potential for vulnerability as well as foul play. Upon collection, such data will often need to go through more extensive screening, and custodians may be more reluctant to cooperate when personal information is stored on a device targeted for collection. It is also possible they may use the virus as a pretext and refuse to allow a forensic professional into their home.

Increasing numbers of companies are turning to remote assisted collection kits (RACKs), which allow a forensic investigator to gain access to a device online and gather data directly from it. While RACK collections are forensically sound and legally defensible, some RACKs are designed to create a forensic image of a device and can consume large amounts of Internet bandwidth in the process. With less robust home connections, this can result in the disruption of ordinary work, or perhaps open the door to delaying tactics or data erasure on the part of custodians who have something to hide.

Once the data collection phase is complete, COVID-19-related constraints on the investigation recede from the picture. Processing, reviewing and analyzing files can proceed as normal—although review teams will be dispersed and have to be managed via a virtual collaborative workspace. The last phase in the investigation, recommending a next step, involves either closing the investigation, expanding it or possibly bringing in third parties such as a managed document review company and/or outside counsel.

Best practices

Given the complexity of many internal investigations and the risks involved, it’s surprising how many organizations conduct them in an ad hoc manner. This is asking for trouble, especially in the age of COVID-19. Careful planning, clear policies and a consistent, formal process are essential. Each matter should begin with the development of a step-by-step plan based on the type of event and the trigger.

Detailed documentation is crucial every step of the way, so stakeholders can continually monitor progress while assessing scope and risk, and to be certain information is gathered in a legally defensible way. Documentation should address:

1. The investigation plan, processes and updates.
2. The data chain of custody.
3. The scope of the investigation, which needs to be legally “reasonable.”

In addition to working closely with the IT department, the investigation team should also consider engaging a company that specializes in forensic collections and solicit the input of the organization’s trusted eDiscovery provider. While some companies do not routinely use eDiscovery tools in internal investigations, these tools can save significant time and money in the culling, analysis, and review of data, particularly when they have a built-in cloud collections capability. AI technologies can dramatically speed up the process while minimizing human error and increasing accuracy, especially in investigations involving large volumes of data.

AI tools also have tremendous potential for companies seeking to apply more proactive controls over information governance and record management, identify security potential vulnerabilities before they become serious liabilities, and perform regular compliance audits. For example, these tools can perform privacy audits and assess an organization’s vulnerability to violations of regulations like the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). AI technologies can also be deployed to look for data anomalies that may indicate security breaches or suspicious behavior.

While the age of COVID-19 presents new challenges for internal investigations, companies should be able to weather the storm by identifying which processes in their investigation workflows will need to change, carefully following best practices, and ensuring they have appropriate, scalable technologies that can be deployed quickly when a new matter emerges.

How AI can alleviate data lifecycle risks and challenges

The volume of business data worldwide is growing at an astounding pace, with some estimates showing the figure doubling every year. Over time, every company generates and accumulates a massive trove of data, files and content – some inconsequential and some highly sensitive and confidential in nature.

Throughout the data lifecycle there are a variety of risks and considerations to manage. The more data you create, the more you must find a way to track, store and protect against theft, leaks, noncompliance and more.

Faced with massive data growth, most organizations can no longer rely on manual processes for managing these risks. Many have instead adopted a vast web of tracking, endpoint detection, encryption, access control and data policy tools to maintain security, privacy and compliance. But, deploying and managing so many disparate solutions creates a tremendous amount of complexity and friction for IT and security teams as well as end users. The problem with this approach is that it comes up short in terms of the level of integration and intelligence needed to manage enterprise files and content at scale.

Let’s explore several of the most common data lifecycle challenges and risks businesses are facing today and how to overcome them:

Maintaining security – As companies continue to build up an ocean of sensitive files and content, the risk of data breaches grows exponentially. Smart data governance means applying security across the points at which the risk is greatest. In just about every case, this includes both ensuring the integrity of company data and content, as well as any user with access to it. Every layer of enterprise file sharing, collaboration and storage must be protected by controls such as automated user behavior monitoring to deter insider threats and compromised accounts, multi-factor authentication, secure storage in certified data centers, and end-to-end encryption, as well as signature-based and zero-day malware detection.

Classification and compliance – Gone are the days when organizations could require users to label, categorize or tag company files and content, or task IT to manage and manually enforce data policies. Not only is manual data classification and management impractical, it’s far too risky. You might house millions of files that are accessible by thousands of users – there’s simply too much, spread out too broadly. Moreover, regulations like GDPR, CCPA and HIPAA add further complexity to the mix, with intricate (and sometimes conflicting) requirements. The definition of PII (personally identifiable information) under GDPR alone encompasses potentially hundreds of pieces of information, and one mistake could result in hefty financial penalties.

Incorrect categorization can lead to a variety of issues including data theft and regulatory penalties. Fortunately, machines can do in seconds–and often with better accuracy–what it might take years for a human to do. AI and ML technologies are helping companies quickly scan files across data repositories to identify sensitive information such as credit card numbers, addresses, dates of birth, social security numbers, and health-related data, to apply automatic classifications. They can also track files across popular data sources such as OneDrive, Windows File Server, SharePoint, Amazon S3, Google Cloud, GSuite, Box, Microsoft Azure Blob, and generic CIFS/SMB repositories to better visualize and control your data.

Retention – As data storage costs have plummeted over the past 10 years, many organizations have fallen into the trap of simply “keeping everything” because it’s (deceptively) cheap to do so. This approach carries many security and regulatory risks, as well as potential costs. Our research shows that exposure of just a single terabyte of data could cost you $129,324; now think about how many terabytes of data your organization stores today. The longer you retain sensitive files, the greater the opportunity for them to be compromised or stolen.

Certain types of data must be stored for a specific period of time in order to adhere to various customer contracts and regulatory criteria. For example, HIPAA regulations require organizations to retain documentation for six years from the date of its creation. GDPR is less specific, stating that data shall be kept for no longer than is necessary for the purposes for which it is being processed.

Keeping data any longer than absolutely necessary is not only risky, but those “affordable” costs can add up quickly. AI-enabled governance can track these set retention periods and minimize risk by automatically securing or eliminating any old or redundant files longer required (or allowed). With streamlined data retention processes, you can decrease storage costs, reduce security and noncompliance exposure and optimize data processing performance.

Ongoing monitoring and management – Strong governance gets easier with good data hygiene practices over the long term, but with so many files to manage across a variety of different repositories and storage platforms, it can be challenging to track risks and suspicious activities at all times. Defining dedicated policies for what data types can be stored in which locations, which users can access it, and all parties with which it be shared will help you focus your attention on further minimizing risk. AI can multiply these efforts by eliminating manual monitoring processes, providing better visibility into how data is being used and alerts when sensitive content might have been shared externally or with unapproved users. This makes it far easier to identify and respond to threats and risky behavior, enabling you to take immediate action on compromised accounts, move or delete sensitive content that is being shared too broadly or stored in unauthorized locations, etc.

The key to data lifecycle management

The sheer volume of data, files and content businesses are now generating and managing creates massive amounts of complexity and risk. You have to know what assets exist, where they’re stored, the specific users have access to them, when they’re being shared, what files can be deleted, which need to be stored in accordance with regulatory requirements, and so on. Falling short in any one of these areas can lead to major operational, financial and reputational consequences.

Fortunately, recent advances in AI and ML are enabling companies to streamline data governance to find and secure sensitive data at its source, sense and respond to potentially malicious behaviors, maintain compliance and adapt to changing regulatory criteria, and more. As manual processes and piecemeal point solutions fall short, AI-enabled data governance will continue to dramatically reduce complexity both for users and administrators, and deliver a level of visibility and control that business needs in today’s data-centric world.

Data crisis: Companies pivot from disruption to transformation

Only 10% of organizations are using data effectively for transformational purposes, according to NTT DATA Services.

data crisis

While 79% of organizations recognize the strategic value of data, the study concludes their efforts to use it are hindered by significant challenges including siloed islands of data across the organization and lack of data skills and talent.

The study analyzes the critical role of data and analytics in helping businesses and organizations pivot from disruption to transformation, an imperative as they respond to today’s global economic climate.

Organizations starting to prioritize a data-driven culture

The study shows only 37% are very effective at using data to adopt or invent a new business model, and only 31% are using data to enter new markets. These different use cases show that organizations have started prioritizing a data-driven culture, but many are still lagging in the most basic aspects of data management and governance.

“Our study reinforces that organizations who act quickly and decisively on their data strategies – or Data Leaders – will recover from the global crisis better and even accelerate their success,” said Greg Betz, Senior Vice President, Data Intelligence and Automation, NTT DATA Services.

“C-suite executives must be champions for the vital role strong data governance plays in resolving systemic process failures and transitioning to new business models in response to the crisis.

“To rebound effectively, corporations, organizations and government agencies must shift to next-generation technologies and create contactless experiences, increased security, and scalable hybrid infrastructures – all reinforced by quality, integrated data.”

Data crisis: Organizations struggle to use data for transformation

The financial services (FS) sector accounts for 25% of the data leaders, making this the sector with the most data leaders. The survey shows that 59% FS organizations report being aware of and fully prepared for new data regulations.

34% report data is shared seamlessly across the enterprise; however, they are the least likely to report they have clear data security processes in place.

The manufacturing sector boasts the second-highest number of data leaders in the study. More than eight out of 10 respondents say they can act swiftly if there is a data privacy breach; however, as with other sectors, when they attempt to derive value from their data, manufacturers struggle with data silos (24%), and they lack the necessary skills and talent to analyze their data (19%).

Among healthcare respondents, 60% say they’re aware and fully prepared for new and upcoming regulations, and approximately eight out of 10 say they’re confident they can comply with data privacy regulations.

However, this sector ranks first in its lack of data literacy skills — about a fifth of respondents report they don’t understand how to read, create and communicate data as information.

data crisis

Lack of data talent and skills in the public sector

The public sector has the highest number of data laggards at 37%. Like other sectors, lack of data talent and skills is one of the public sector’s biggest barriers when attempting to understand and derive value from data.

Insurance companies are among the most likely to report they’re aware and fully prepared for new data regulations (58%) and have clear processes in place for securely using their data (50%).

However, when it comes to deriving value from data, insurance companies – like manufacturing, struggle with data silos and the lack of the right technologies to analyze their data.

“This study validates that many of the top data challenges organizations face today are decades old,” said Theresa Kushner, Consultant, AI and Analytics, NTT DATA Services. “The 2020 pandemic is a wakeup call for businesses at any scale, and a reminder that in today’s global economic climate the time to address data challenges and chart a new path is now.”

Microsoft releases new encryption, data security enterprise tools

Microsoft has released (in public preview) several new enterprise security offerings to help companies meet the challenges of remote work.

Microsoft enterprise security

Double Key Encryption for Microsoft 365

Secure information sharing is always a challenge, and Microsoft thinks it has the right solution for organizations in highly regulated industries (e.g., financial services, healthcare).

“Double Key Encryption (…) uses two keys to protect your data—one key in your control, and a second key is stored securely in Microsoft Azure. Viewing data protected with Double Key Encryption requires access to both keys. Since Microsoft can access only one of these keys, your protected data remains inaccessible to Microsoft, ensuring that you have full control over its privacy and security,” the company explained.

“You can host the Double Key Encryption service used to request your key, in a location of your choice (on-premises key management server or in the cloud) and maintain it as you would any other application.”

This Microsoft enterprise security solution allows organizations to migrate sensitive data to the cloud or share it via a cloud platform without relying solely on the provider’s encryption. Also, it makes sure that the cloud provider or collaborating third parties can’t have access to the sensitive data.

Microsoft Endpoint Data Loss Prevention

“Data Loss Prevention solutions help prevent data leaks and provide context-based policy enforcement for data at rest, in use, and in motion on-premises and in the cloud,” Alym Rayani, Senior Director, Microsoft 365, noted.

“Built into Windows 10, Microsoft Edge, and the Office apps, Endpoint DLP provides data-centric protection for sensitive information without the need for an additional agent, enabling you to prevent risky or inappropriate sharing, transfer, or use of sensitive data in accordance with your organization’s policies.”

Organizations can use it to prevent copying sensitive content to USB drives, printing of sensitive documents, uploading a sensitive file to a cloud service, an unallowed app accessing a sensitive file, etc.

When users attempt to do a risky action, they are alerted to the dangers and provided with a helpful explanation and guidance.

Insider Risk Management and Communication Compliance

Insider Risk Management is not a new offering from Microsoft, but has been augmented by new features that deliver new, quality insights related to the obfuscation, exfiltration, or infiltration of sensitive information.

“For those using Microsoft Defender Advanced Threat Protection (MDATP), we can now provide insights into whether someone is trying to evade security controls by disabling multi-factor authentication or installing unwanted software, which may indicate potentially malicious behavior,” explained Talhar Mir, Principal PM at Microsoft.

“Finally, one of the key early indicators as to whether someone may choose to participate in malicious activities is disgruntlement. In this release, we are further enhancing our native HR connector to allow organizations to choose whether they want to use additional HR insights that might indicate disgruntlement to initiate a policy.”

Communication Compliance has also been introduced earlier this year, but now offers enhanced insights and improved actions to help foster a culture of inclusion and safety within the organization.

340 GDPR fines for a total of €158,135,806 issued since May 2018

Since rolling out in May 2018, there have been 340 GDPR fines issued by European data protection authorities. Every one of the 28 EU nations, plus the United Kingdom, has issued at least one GDPR fine, Privacy Affairs finds.

GDPR fines

Whilst GDPR sets out the regulatory framework that all EU countries must follow, each member state legislates independently and is permitted to interpret the regulations differently and impose their own penalties to organizations that break the law.

Nations with the highest fines

  • France: €51,100,000
  • Italy: €39,452,000
  • Germany: €26,492,925
  • Austria: €18,070,100
  • Sweden: €7,085,430
  • Spain: €3,306,771
  • Bulgaria: €3,238,850
  • Netherlands: €3,490,000
  • Poland: €1,162,648
  • Norway: €985,400

Nations with the most fines

  • Spain: 99
  • Hungary: 32
  • Romania: 29
  • Germany: 28
  • Bulgaria: 21
  • Czech Republic: 13
  • Belgium: 12
  • Italy: 11
  • Norway: 9
  • Cyprus: 8

The second-highest number of fines comes from Hungary. The National Authority for Data Protection and Freedom of Information has issued 32 fines to date. The largest being €288,000 issued to an ISP for improper and non-secure storage of customers’ personal data.

UK organizations have been issued just seven fines, totalling over €640,000, by the Information Commissioner. The average penalty within the UK is €160,000. This does not include the potentially massive fines for Marriott International and British Airways that are still under review.

British Airways could face a fine of €204,600,000 for a data breach in 2019 that resulted in the loss of personal data of 500,000 customers.

Similarly, Marriott International suffered a breach that exposed 339 million people’s data. The hotel group faces a fine of €110,390,200.

The largest and highest GDPR fines

The largest GDPR fine to date was issued by French authorities to Google in January 2019. The €50 million was issued on the basis of “lack of transparency, inadequate information and lack of valid consent regarding ads personalization.”

Highest fines issued to private individuals:

  • €20,000 issued to an individual in Spain for unlawful video surveillance of employees.
  • €11,000 issued to a soccer coach in Austria who was found to be secretly filming female players while they were taking showers.
  • €9,000 issued to another individual in Spain for unlawful video surveillance of employees.
  • €2,500 issued to a person in Germany who sent emails to several recipients, where each could see the other recipients’ email addresses. Over 130 email addresses were visible.
  • €2,200 issued to a person in Austria for having unlawfully filmed public areas using a private CCTV system. The system filmed parking lots, sidewalks, a garden area of a nearby property, and it also filmed the neighbors going in and out of their homes.

CCPA enforcement to put pressure on financial organizations’ IT resources

Enforcement of the California Consumer Privacy Act (CCPA), which begins on July 1, 2020, is going to put additional pressure on already overstretched IT resources and budgets, Netwrix reveals.

CCPA enforcement pressure

Increase in DSARs

According to the survey, 32% of financial organizations have already seen an increase in data subject access rights requests (DSARs) since the CCPA came into force on January 1, 2020.

73% of respondents stated that manual processing of these requests puts significant or moderate pressure on their IT teams. Every fourth organization (27%) noted that rising interest in execution of privacy rights has increased their expenses.

Gartner warns that fulfilling a single request takes most organizations two or more weeks and costs an average of $1,400 if done manually. This means that many financial organizations, which are already facing tough times, will need to allocate additional workforce and budget to ensure compliance with the CCPA.

Other findings

  • 33% of financial organizations discovered sensitive or regulated customer data outside of designated secure locations.
  • 40% of respondents admitted their IT teams granted direct access to sensitive data based solely on a user’s request in the past 12 months.
  • 75% of financial organizations that classify data can detect data misuse in minutes, while those who don’t usually need days (43%) or months (29%).
  • 70% of incidents of unauthorized data sharing within this vertical led to data compromise.
  • 44% of CISOs and CIOs don’t have or don’t know whether they have KPIs for IT security and risk.

“While organizations are unlikely to be flooded with data subject access requests on July 2, they do need to be prepared to process requests accurately and promptly. One missed deadline or incompletely fulfilled request could result in a thorough audit from the authorities and sizable fines.

“To ensure compliance while controlling costs and relieving the burden on IT, financial organizations need to automate the DSAR process,” said Steve Dickson, CEO of Netwrix.