Is securing your network worth the money?

Workshop on the Economics of Information Security uncovers startling deficiencies in corporate security

We often hear corporate IT pros complain that justifying security expenses is tough because they don't necessarily generate revenue or enable new business opportunities. In fact, figuring out the economics of IT security is so challenging for customers and vendors that lots of the world's best researchers are putting their minds to the task.

They recently shared results at a conference hosted by Carnegie Mellon University. Here's a sampling of the research presented:

"Inadvertent Disclosure -- Information Leaks in the Extended Enterprise"

A pair of researchers from Dartmouth College's Center for Digital Strategies (Tuck School of Business) examined involuntary leakage of information via peer-to-peer file sharing networks at a group of large financial institutions (see the paper). What they found wasn't pretty.

Using technology from Tiversa to gather and categorize tens of thousands of P2P searches and files related to the top 30 U.S. banks, the researchers found "significant information risk firms and individuals face from P2P file sharing networks" such as Gnutella, FastTrack and edonkey.

They found that end users are often lazy or poorly organized, leading to internal company documents as well as partners' documents being revealed. "For one bank, we found a spreadsheet with 23,000 business accounts including their contact names and addresses, account numbers, company positions, and relationship managers at the bank," the report states. Also found: one bank's security review process manual.

The researchers also addressed the issue of "digital wind," which entails getting your company searched on because your company or brand names are similar or the same as those of things such as bands or songs (State Street, for example, could get caught up in searches for the Death Cab for Cutie song "State Street Residential").

The researchers found that criminals actively search P2P networks looking for information to exploit.

While some companies and ISPs use port filtering to block or throttle P2P traffic, many users of P2P systems have moved to new systems and some of the newer systems have been designed to use ports also used by Web, e-mail and other traffic.

The researchers' recommendations include introducing "file naming conventions and policies to reduce the metadata footprint of their documents." Employee/partner education about P2P dangers is also key, in combination with technical solutions, they wrote. Benchmarking can be done to measure document leaks per employee over a set period of time.

One other conclusion: Big firms have to work a lot harder to safeguard themselves against P2P-oriented leaks than smaller ones.

"Network Security: Vulnerabilities and Disclosure Policy"

A pair of Tel Aviv University researchers and another from the Michigan State University Department of Economics examined "the economic incentives facing software vendors and users when software is subject to vulnerabilities" in their paper.

The researchers lay out the dilemma faced by software vendors who don't want to risk harm to their reputation by disclosing vulnerabilities but also don't want ill-intentioned hackers to exploit vulnerabilities that they stumble across. Also, the paper notes: "the firm's disclosure policy and its profit-maximizing behavior are interdependent." The researchers develop a model that looks at the ramifications for software vendors when they disclose, don't disclose and put more resources into product security ahead of time.

Among findings is that "bug bounty" programs offered by some software makers can boost their profitability, as long as they actually disclose the vulnerabilities. Logically, only those customers who actually install updates benefit from the programs.

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