The document discusses PCI DSS compliance and data protection options. It provides an overview of the PCI DSS standards for protecting cardholder data and discusses challenges with data protection implementations. The document then summarizes various data protection techniques including encryption, tokenization, hashing, and their tradeoffs in terms of security, transparency, and performance. It also presents case studies of large organizations that have implemented data protection solutions to meet PCI compliance.

1. PCI DSS Compliance Ulf Mattsson, CTO Ulf.mattsson @ protegrity.com

2. Bio 20 years with IBM Development & Services IBM Software Development & IBM Research consulting resource IBM Certified in IT Architecture & IT Security Created Protegrity's Data Security Technology Protegrity Policy driven Data Encryption (1994) Inventor of 20+ Patents In the areas of Encryption Key Management, Separation of Duties, Policy Driven Data Encryption, Tokenization, Internal Threat Protection, Data Usage Control, Dynamic Access Control, Intrusion Prevention and Cross System Layer Security. Master's degree in Physics and degrees in Finance and Electrical engineering Research member of the International Federation for Information Processing (IFIP) WG 11.3 Data and Application Security. Member of IEEE, OASIS, Computer Security Institute (CSI), Object Management Group (OMG) CORBA Security Service, Open Web Application Security Project (OWASP), Information Systems Security Association (ISSA), Information Systems Audit and Control Association (ISACA),, The International Association of Science and Technology for Development (IAST), The Medical Records Institute (MRI), and The World Scientific and Engineering Academy and Society for Computer Security (WSEAS). 02

3. 03 PCI DSS Compliance

4. Agenda PCI Information Sources Data Protection Options for PCI and Beyond PCI Case Studies Advanced Attacks on Data Flow Appendix PCI Feedback Determining Risks Cost Effective Approach Resources

5. Source of Information about PCI DSS http://www.knowpci.com

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7. Current Discussion of Data Protection for PCI DSS 7 https://www.pcisecuritystandards.org Protegrity: Participating Organization PCI SSC is currently studying the effect on the standard by different technologies (i.e. End to end encryption, tokenization, chip and pin etc.) Bob Russo (GM) & PCI SSC is currently are working in Europe with the European Payment Council (EPC) .

8. PCI Security Standards Council about Data in Transit The PCI Security Standards Council (https://www.pcisecuritystandards.org/) manages the PCI DSS standards End-to-end encryption is likely to be a central focus as the council seeks input on how this might best be achieved in the payment-card environment through different technologies. If that is accomplished, it might result in a decidedly new PCI standard in the future for card-data protection, PCI Security Standards Council says in http://www.networkworld.com/news/2008/100108-pci-credit-card.html?page=2 . "Today we say if you're going outside the network, you need to be encrypted, but it doesn't need to be encrypted internally," PCI Security Standards Council says. "But as an example, if you add end-to-end encryption, it might negate some requirements we have today, such as protecting data with monitoring and logging. Maybe you wouldn’t have to do that. So we'll be looking at that in 2009." 08

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11. 011 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=940287

13. http://ssrn.com/abstract=1126002

14. PCI DSS 1.2 Applicability Information & PII Aspects 14

15. Discussion of Data Protection for PCI DSS 15

16. Requirement 3: Protect stored cardholder data Section 3.4 Render PAN, at minimum, unreadable anywhere it is stored (including on portable digital media, backup media, in logs) by using any of the following approaches: One-way hashes based on strong cryptography Truncation Index tokens and pads (pads must be securely stored) Strong cryptography with associated key-management processes and procedures The MINIMUM account information that must be rendered unreadable is the PAN. Notes: If for some reason, a company is unable render the PAN unreadable, refer to Appendix B: Compensating Controls. “Strong cryptography” is defined in the PCI DSS Glossary of Terms, Abbreviations, and Acronyms 016

17. Section 3.5 “Protect encryption keys used for encryption of cardholder data against both disclosure and misuse. 3.5.1 Restrict access to keys to the fewest number of custodians necessary 3.5.2 Store keys securely in the fewest possible locations and forms.” Section 3.6 “Fully document and implement all key management processes and procedures for keys used for encryption of cardholder data, including the following: 3.6.1 Generation of strong keys 3.6.2 Secure key distribution 3.6.3 Secure key storage 3.6.4 Periodic changing of keys • As deemed necessary and recommended by the associated application (for example, re-keying); preferably automatically. At least annually. 3.6.5 Destruction of old keys 3.6.6 Split knowledge and establishment of dual control of keys (so that it requires two or three people, each knowing only their part of the key, to reconstruct the whole key) 3.6.7 Prevention of unauthorized substitution of keys 3.6.8 Replacement of known or suspected compromised keys 3.6.9 Revocation of old or invalid keys 017 Requirement 3: Protect stored cardholder data

18. Split knowledge and dual control of keys requires two or three people, each knowing only their part of the key, to reconstruct the whole key The principle behind dual control and split knowledge is required to access the clear text key. Only a single master key will be needed under this control. The determination of any part of the key must require the collusion between at least two trusted individuals. Any feasible method to violate this axiom means that the principles of dual control and split knowledge are not being upheld. At least two people are required to ‘reconstruct’ the key, and they each must have a physical thing and they each must have some information that is required. The use of a key in memory to encipher or decipher data, or access to a key that is enciphered under another key does not require such control by PCI DSS. Keys appearing in the clear in memory, the principles of dual control and split knowledge are difficult but not impossible to enforce. Please review http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1126002 for additional discussion. 018 Requirement 3.6.6: Split knowledge and dual control

19. Currently KM vendor products support different and isolated areas (tape, storage, network, end points …): Over time (maybe years from now) the emerging KM standards will be finalized (and hopefully converge) and eventually be supported by major KM vendor products (and end point platforms that actually can use the keys). This is a list of the major (and conflicting) emerging KM standards and guidelines: OASIS KMIP TC is very broad including e-mail encryption and more compared to the mainly storage-related IEEE P1619.3 and EKMI that is primarily symmetric key focused. KMIP TC is not directly related to the more mature P1619.x and specifically P1619.3, though they share many members. ANSI X9.24 is solving management of symmetric keys with focus on financial and retail industry. NIST SP 800-57 is a very solid recommendation for key management and key states. IETF KEYPROV is defining how to provision symmetric keys. SKSML from the OASIS EKMI group is defining a protocol for acquiring symmetric keys. Key Management Standards & Vendors

20. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1051481

21. PCI – Compensating Controls 21

22. Data Protection Challenges Actual protection is not the challenge Management of solutions Key management Reporting Policy Minimizing impact on business operations Performance v. security Minimizing impact (and costs) Changes to applications Impact on downstream systems Time 22

23. Addressing Data Protection Challenges Full mapping of sensitive data flow Where is the data Where does it need to be Identify what data is needed for processing in which applications What are the performance SLAs Understand the impact of changing/removing data Will it break legacy systems Address PCI, strategize for the larger security issue

24. Data Protection Approaches Data Access Control How the data is presented to the end user and/or application Data Protection How sensitive data is rendered unreadable 024

25. Data Protection Options Data Stored As Clear – actual value is readable Hash – unreadable, not reversible Encrypted – unreadable, reversible Replacement value (tokens) – unreadable, reversible Partial encryption/replacement – unreadable, reversible 025

26. Data Protection Options Data in the Clear Audit only Masking Access Control Limits Advantages Low impact on existing applications Performance Time to deploy Considerations Underlying data exposed Discover breach after the fact PCI aspects 026

27. Data Protection Options Hash Non – reversible Strong protection Keyed hash (HMAC) Unique value if salt is used Advantages None really Considerations Key rotation for keyed hash Size and type Transparency 027

28. Data Protection Options Strong Encryption Industry standard (NIST modes - AES CBC …) Highest security level Advantages Widely deployed Compatibility Performance Considerations Storage and type Transparency to applications Key rotation 028

29. Data Protection Options Format Controlling Encryption Maintains data type, length Advantages Reduces changes to downstream systems Storage Partial encryption Considerations Performance Security and compliance Key rotation Transparency to applications 029

30. Data Protection Options Replacement Value (i.e. tokens, alias) Proxy value created to replace original data Centrally managed, protected Advantages No changes to most downstream systems Out of scope for compliance No local key rotation Partial replacement Considerations Transparency for applications needing original data Availability and performance for applications needing original data 030

31. Different ‘Tokenizing’ Approaches & Topologies Algorithmic Tokenizer CCN 123456 123456 1234 ABCDEF GHIJKL 1234 Application ‘Encryption’ Algorithm On-site Local Tokenizer Token Token & Encrypted CCN Branch Office / Stores Network Home Office / HQ On-site Central Tokenizer Token & Encrypted CCN Token Network Outsourced / ASP ASP Central Tokenizer Token & Encrypted CCN

34. How to Protect the Data Flow Against Advanced Attacks 033 Point Of Data Acquisition 123456 123456 1234 Continuously protected data flow Encrypt 123456 777777 1234 123456 777777 1234 123456 777777 1234 Decrypt Decrypt 123456 123456 1234 123456 123456 1234 Payment Authorization Settlement & Charge-back Unprotected sensitive information: Protected sensitive information

36. Limitations in functionality

37. Limitations in data search

38. Performance issuesMany Applications Most Applications Text Data All Applications Data Field Length I Original I Longer This is a generalized example

39. 035 Preserving the Data Format Data Type !@#$%a^&*B()_+!@4#$2%p^&* Hash - Encryption - Alphanumeric – Encoding – Partial Enc– Clear Text - Binary Data !@#$%a^&*B()_+!@ aVdSaH 1F4hJ5 1D3a 666666 777777 8888 Token / Encoding Text Data 123456 777777 1234 Numeric Data Field Length 123456 123456 1234 I Original Length I Longer This is a generalized example

40. Field Level Data Protection Methods vs. Time Protection Level Tokenized Data High Key Rotation Strong Encryption (AES CBC) Keyed Hash (HMAC) Format Controlling Encryption (AES FCE) Plain Hash (SHA-1 on CCN) Medium Time

41. Format Controlling Encryption vs. Time Protection Level Tokenized Data High AES FCE (numeric & IV) AES FCE (alphanumeric & fix IV) Medium Time

42. Field Level Data Protection Methods vs. Time Protection Level Tokenized Data High AES CBC (rotating IV) AES CBC (fix IV, long data) AES CBC (fix IV, short data) AES ECB Medium Time

43. Data Protection Options & Cost Factors 039 Highest Lowest

44. Data Protection Capabilities 040 Highest Lowest

45. Data Protection Implementation Choices Data Protection Options are not mutually exclusive Data Protection Layers Application Database File System Data Protection Topologies Remote services Local service Data Security Management Central management of keys, policy and reporting 041

46. 042 Data Protection Implementation Choices Highest Lowest

47. Column Encryption Performance - Different Topologies Rows Per Second 10 000 000 – 1 000 000 – 100 000 – 10 000 – 1 000 – Data Warehouse Platforms Mainframe Platforms Unix Platforms Windows Platforms Data Loading (Batch) Queries (Data Warehouse & OLTP) Encryption Topology I Network Attached Encryption (SW/HW) I Local Encryption (SW/HW)

48. Generalization: Encryption at Different System Layers High Ease of Deployment (Transparency) Separation of Duties (Security Level) Low Encryption Layer I File System Layer I Database Layer I Storage Layer SAN/NAS… I Application Layer

49. Application Transparency – Encryption, Tokens & Hashing Transparency level High Low Database Encryption Smart Tokens Hashing Database Operation I Look-up I Range Search I Process Clear-values

50. Application Transparency Transparency level High Low Database File Encryption 3rd Party Database Column Encryption Native Database Column Encryption Smart Tokens Tokens Key based Hash (HMAC) Plain Hash (SHA-2) Security Level

51. Business Value vs. Ease of Compliance Ease of Compliance High Business Value Encryption Tokenizing Hashing Simple Masking Low I I I I Deleting Data Masking One-way Masking-Two-Way Clear Data Lost Data Reusable Data

52. Protecting the Data Flow: Case Studies 048

53. Data Level Attacks DBA ATTACK MALWARE / TROJAN TRUSTED SEGMENT DMZ TRANSACTIONS End- point Internal Users Enterprise Apps DB Server Server Load Balancing SAN, NAS, Tape Internet NW Proxy FW Proxy FW Proxy FW IDS/ IPS Wire- less Network Devices Server Web Apps OS ADMIN FILE ATTACK SQL INJECTION SNIFFER ATTACK MEDIA ATTACK

55. Partners (Financial Institutions) Security for the Sensitive Data Flow Points of collection Store Back Office Web Apps Retail Locales Store Back Office Applications Store DB T-Logs,Journals $%&# Collection $%&# $%&# $%&# $%&# Branches/Stores HQ Polling Server Aggregation Log $%&# Policy Policy Policy Policy Policy Policy Policy Manager Multiplexing Platform ERP $%^& *@K$ Operations Reports Log Log Analytics Analytics Detailed Analytical Archive 7ks##@ Focused / Summary Analytical Tactical Active Access / Alerting Log

56. Case 1: Goal – PCI Compliance & Application Transparency Credit Card Entry Application Application File Encryption FTP Settlement Batch File Encryption Windows File Encryption: Windows, UNIX,Linux, zOS Database Encryption: DB2 (zOS, iSeries), Oracle, SQL Server Local Store Location (Branch) Financial Institution Central HQ Location

57. 053 Case 1: File Encryption & FTP Credit Card Entry Attacker Attacker Network POS Application FTP Application 123456 123456 1234 123456 123456 1234 @$%$^D&^YTOIUO*^ @$%$^D&^YTOIUO*^ File System (Memory) Storage (Disk) Backup (Tape) Protected sensitive information Unprotected sensitive information:

58. 054 Case 1: From Encrypted File to Encrypted Database Attacker Application Attacker Network @$%$^D&^YTOIUO*^ 123456 123456 1234 123456 123456 1234 FTP Application Database @$%$^D&^YTOIUO*^ File File Protected sensitive information Unprotected sensitive information:

59. Case 2a: Goal – Addressing Advanced Attacks & PCI Credit Card Entry Continuously encrypted computing: protection of sensitive data fields Application Encryption Application Application FTP Decryption Settlement FTP File Encryption Windows File Encryption: Windows, UNIX,Linux, zOS Database Encryption: DB2 Oracle SQL Server Financial Institution Local Store Location (Branch) Central HQ Location

60. 056 Case 2a: Application Encryption to Encrypted Database Point Of Data Acquisition Network 123456 123456 1234 POS Application Application 123456 777777 1234 Database File System Storage (Disk) Backup (Tape) Protected sensitive information Unprotected sensitive information:

61. Case 2b: Goal – Addressing Advanced Attacks & PCI Credit Card Entry Continuously encrypted computing: protection of sensitive data fields Application Database Encryption: SQL Server Application FTP Database Encryption: DB2 zOS Central HQ Location Local Store Location

62. 058 Case 2b: From Encrypted Database to File & FTP Point Of Data Acquisition aVdSaH 1F4hJ5 1D3a 123456 123456 1234 Extraction Application Order Application FTP Application aVdSaH 1F4hJ5 1D3a Database aVdSaH 1F4hJ5 1D3a File Storage (Disk) Backup (Tape) Protected sensitive information Unprotected sensitive information:

63. 059 Case 2b: From Selectively Encrypted File to Encrypted Database Network 123456 123456 1234 Application aVdSaH 1F4hJ5 1D3a aVdSaH 1F4hJ5 1D3a FTP Application Database File Storage (Disk) Backup (Tape) Protected sensitive information Unprotected sensitive information:

64. Case 3: Goal – Addressing Advanced Attacks & PCI Credit Card Entry Continuously encrypted computing: protection of sensitive data fields Authorization Transaction Online Decrypting Gateway Encrypting Gateway Application Application Files Databases Local Store Location (Branch) Financial Institution Central HQ Location

65. 061 Case 3: Gateway Encryption Attacker Attacker Network 123456 123456 1234 123456 123456 1234 Encrypting Gateway Decrypting Gateway 123456 777777 1234 123456 777777 1234 Applications Database File System Storage (Disk) Backup (Tape) Protected sensitive information Unprotected sensitive information:

66. Determine Risk Data Security Risk=Data Value * Exposure 062 Enables prioritization Groups data for potential solutions

67. Matching Data Protection Solutions with Risk Level 063 Risk Solutions Low Risk (1-5) Monitor Monitor, mask, access control limits, format control encryption At Risk (6-15) Replacement, strong encryption High Risk (16-25)

68. Matching Data Protection Solutions with Risk Level 064 Risk Solutions Low Risk (1-5) Monitor Monitor, mask, access control limits, format control encryption At Risk (6-15) Select risk-adjusted solutions for costing Replacement, strong encryption High Risk (16-25)

69. Estimate Costs Cost = Solution Cost + Operations Cost Solution Cost = cost to license or develop, install and maintain Operations Cost = cost to change applications, impact on downstream systems, meeting SLAs, user experience 065

70. Operation Cost Factors Performance Impact on operations - end users, data processing windows Storage Impact on data storage requirements Security How secure Is the data at rest Impact on data access – separation of duties Transparency Changes to application(s) Impact on supporting utilities and processes 066

71. Operation Cost Factors Solution should be able to change with the environment Progress from less to more secure solution, or the reverse Add new defenses for future threats Plug into existing infrastructure, integrate with other systems 067

72. Data Security Management An integral part of technical and business process Security Policy Centralized control of security policy Consistent enforcement of protection Separation of duties Reporting and Auditing Compliance reports Organization wide security event reporting Alerting Integration with SIM/SEM Key Management 068

73. Cost Effective Data Protection Uses Risk as an adjusting factor for determining a Data Protection strategy Risk=Data Value*Exposure Determines solutions that fit the risk level, then determines cost Cost=Solution Cost + Operational Cost Prepare for the future 069

74. How to Protect the Data Flow Against Advanced Attacks 070 Point Of Data Acquisition 123456 123456 1234 Continuously protected data flow Encrypt 123456 777777 1234 123456 777777 1234 123456 777777 1234 Decrypt Decrypt Payment Authorization Settlement & Charge-back Unprotected sensitive information: 123456 123456 1234 123456 123456 1234 Protected sensitive information

76. Identify Assets and Assign Business Value to each

77. Identify Vulnerabilities for each Asset

78. Identify potential Attack Vectors & Attackers

79. Assess the Risk

80. Compliance Aspects

82. Performance & Scalability

83. Application Transparency

84. Platform Support & Development Life Cycle Support

85. Key Management, Administration & Reporting

86. Deployment Cost, Time & RiskAdjust

87. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1330466

88. 073 http://www.quest-pipelines.com/newsletter-v7/0706_C.htm

89. http://www.net-security.org/dl/insecure/INSECURE-Mag-2.pdf

90. Data Masking – One-way vs. Two-way Data Quality & Exposed Details 3rd Party Interface Testing Data Entry Partner Interface Fire Fighting High – Low – Two-Way Masking Two-Way Masking One-Way Masking One-Way Masking Information Life Cycle I I I I I I I Development Testing Staging Production Operational Analytics Archive Protected sensitive information Unprotected sensitive information: 075

91. 076

92. Separation of Duties (DBA) Separation of Duties (DBA) Database Column Encryption Yes - No - No - Database Table Encryption Database File Encryption Index Protection I Yes I No I No

93. The Goal: Good, Cost Effective Security The goal is to deliver a solution that is a balance between security, cost, and impact on the current business processes and user community Security plan - short term, long term, ongoing How much is ‘good enough’ Security versus compliance Good Security = Compliance Compliance ≠ Good Security 078

94. Risk Adjusted Data Protection 079 Assign value to your data Assess exposure Determine risk Understand which Data Protection solutions are available to you Estimate costs Choose most cost effective method

95. Assign Value to Your Data 080 Identify sensitive data If available, utilize data classification project Rank what is sensitive on its own (think PCI) Consider what is sensitive in combination (think Privacy) How valuable is the data to (1) your company and (2) to a thief Corporate IP, Credit Card numbers, Personally Identifiable Information Assign a numeric value: high=5, low=1

96. Assess Exposure Locate the sensitive data Applications, databases, files, data transfers across internal and external networks Location on network Segmented External or partner facing application Access How many users have access to the sensitive data? Who is accessing sensitive data? How much and how frequently data is being accessed? Assign a numeric value: high=5, low=1 081

97. Determine Risk Data Security Risk=Data Value * Exposure 082 Enables prioritization Groups data for potential solutions

98. Example – Software Application

99. Example - Attack by DBA Skill & Effort Level Attack Vector 3 Programming - OS level- SQL- Attack Vector 2 Attack Vector 1 Damage Level I Key Dump I Data Dump I Data Leakage

100. DMZ TRUSTED SEGMENT TRANSACTIONS End- point Internal Users Enterprise Apps DB Server Server Load Balancing Internet DB NW SAN, NAS, Tape Proxy FW Proxy FW Proxy FW IDS/ IPS Wire- less Network Devices Keys Server Members Web Apps Case Study - Data Security Vulnerability Points Organization data security vulnerability points under study: Endpoint security / desktop security / wireless security Customer access to Organization via Web Applications Web application development and access controls Global bulk file transfer to/from member institutions Corporate network infrastructure, including firewalls, IDS/IPS XxxNet/YyyNet global infrastructure Application-to-database access controls Database management controls, including separation of duties Key management systems Customer premises HW/SW data protection (the XXX) Protection of stored data in SAN, NAS and backup tapes

101. Corporate Overview Enterprise Data Security Management Full services offering including consulting, training and support Global reach 300+ customers 100% growth in each of last three years Founded 1996 10 patents granted, 18 pending 86

102. Protegrity Value Proposition Protecting your data. Protecting your business. Balancing business needs, operational performance, and the risk of data loss Achieving security and compliance 87

103. Protegrity and PCI 88

104. Our Customers Cross industry Retailers 20% of the top 25 retailers Financial institutions Transportation Global 60% in North America 30% EMEA 10% Asia 089

105. The Protegrity Defiance© Suite Data Protection System (DPS) Encryption, monitoring, masking Database, file and application level Threat Management System (TMS) Web application firewall Enterprise Security Administrator Security policy Key management Alerting, reporting, and auditing 90

106. Protegrity Solutions 091 Protecting data Protecting web applications Managing data security

107. Questions? If you would like a copy of the slides, please email ulf.mattsson@protegrity.com