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    State of Cybercrime

    Join us for State of Cybercrime, where experts discuss the latest trends and developments in the world of cybercrime and provide insights into how organizations can protect themselves from potential threats.

    Sponsored by Varonis

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    Latest Episodes:
    Attorney Sara Jodka on GDPR and Employee Data, Part I May 03, 2018
    Show notes

    Sara Jodka is an attorney for Columbus-based Dickinson Wright. Her practice covers boths data privacy as well as employee law. She's in a perfect position to help US companies in understanding how the EU General Data Protection Regulation (GDPR) handles HR data. In this first part of the interview, we learn from Sara that some US companies will be in for a surprise when they learn that all the GPDR security rules will apply to internal employee records. The GPDR's consent requirements, though, are especially tricky for employees. Transcript Welcome, Sara. Sara Jodka: Thank you for having me. IOS: I wanted to get into an article that you had posted on your law firm's blog. It points out an interesting subcategory of GDPR personal data which doesn't get a lot of attention, and that is employee HR records. You know, of course it's going to include ethnic, payroll, 401(k), and other information. So can you tell us, at a high level, how the GDPR treats employee data held by companies? Employee Data Covered By the GDPR SJ: Whenever we look at GDPR, there are 99 articles, and they're very broad. There's not a lot of detail on the GDPR regulations themselves. In fact, we only have one that actually carves employment data out, and that's Article 88 — there's one in and of itself. Whenever we're looking at it, none of the articles say that all of these people have these rights. All these individuals have rights! None of them say, "Well, these don't apply in an employment situation." So we don't have any exclusions! We're led to "Yes, they do apply." And so we've been waiting on, and we have been working with guidances that we're receiving, you know, from the ICO, with respect to …. consent obligation, notice obligation, portability requirements, and any employee context. Because it is going to be a different type of relationship than the consumer relationship! IOS: It's kind of interesting that people, I think, or businesses, probably are not aware of this ... except those who are in the HR business. So I think there's an interesting group of US companies that would find themselves under these GDPR rules that probably would not have initially thought they were in this category because they don't collect consumer data. I'm thinking of law firms, investment banking, engineering, professional companies. US Professional Service Companies Beware! SJ: I think that's a very good point! In fact, that's where a lot of my work is actually coming from. A lot of the GDPR compliance is coming from EU firms that specialize with EU privacy. But a lot of U.S. companies didn't realize that this is going to cover their employment aspects that they had with EU employees that are in the EU! They thought, "Well, because we don't actually have a physical location EU, it doesn't actually cover us." That's not actually at all true.The GDPR covers people that are working in the EU, people who reside in the EU, so to the extent that U.S. company has employees that are working in the EU it is going to cover that type of employee data. And there's no exception in the GDPR around it. So it's going to include those employees. IOS: So I hadn't even thought about that. So their records would be covered under the GDPR? SJ: Yeah, the one thing about the definition of a data subject under the GDPR is it doesn't identify that it has to be an EU resident or it has to be an EU citizen. It's just someone in the EU. When you're there, you have these certain rights that are guaranteed. And that will cover employees that are working for U.S. companies but they're working in the EU. IOS: Right. And I'm thinking perhaps of a U.S. citizens who come there for some assignment, and maybe working out of the office, they would be covered under these rules. SJ: And that's definitely a possibility, and that's one thing that we've been looking for. We've been looking for looking for guidance from the ICO to determine … the scope of what this is going to look not only in an employment situation, but we're dealing with an immigration situation, somebody on a work visa, and also in the context of schools as we are having, you know, different students coming over to the United States or going abroad. And what protection then the GDPR applies to those kind of in-transition relationships, those employees or students. With a lot of my clients, we are trying to err on the side of caution and so do things ahead of time, rather than beg forgiveness if the authorities come knocking at our door. GDPR's Legitimate Interest Exception is Tricky IOS: I agree that's probably a better policy, and that's something we recommend in dealing with any of these compliance standards. In that article, you mentioned that the processing of HR records has additional protections under the GDPR … An employee has to give explicit or consent freely and not as part of an employer-employee contract. [caption id="attachment_10803" align="alignnone" width="800"] GDPR's Article 6 says there are only six lawful ways to process data. If you don't obtain freely given consent, then it gets tricky.[/caption] Can you explain this? And then, what does an employer have to do to process employee data especially HR data? SJ: Well, when we're looking at the reasons that we're allowed to process data, we can do it by consent, and we can also do it if we have a lawful basis. A number of the lawful bases are going to apply in the employer context. One of those is if there is going to be an agreement. You know, in order to comply with the terms of a contract, like a collective bargaining agreement or like an employment agreement. So hire/fire payroll data would be covered under that, also if there is … a vital interest of an employee. There's speculation that that exception might actually be, or that legitimate basis might be used to obtain vital information regarding, like, emergency contact information of employees. And there's also one of the other lawful basis is if the employer has a greater, you know, interest in the data that doesn't outweigh the right of the data subject, the employee. The issue though is most ... when we talk about is consumer data, and we're looking a lot at consent and what actually consent looks like in terms of the express consent, you know, having them, you know, check the box or whatever. In an employee situation, the [UK’s] ICO has come out with guidance with respect to this. And they have expressly said in an employee-employer relationship, there is an inherent imbalance of bargaining power, meaning an employee can never really consent to giving up their information because they have no bargaining power. They either turn it over, or they're not employed. The employer is left to rely only on the other lawful basis to process data, excluding consent, so the contractor allowance and some of the others. But the issue I have with that is, I don't think that that's going to cover all the data that we actually collect on an employee, especially employees who are operating outside the scope of a collective bargaining agreement. In a context of, say, an at-will employee where there is that ... where that contract exception doesn't actually apply. I think there will be a lot of collection of data that doesn't actually fall under that. It may fall into the legitimate interest, if the employer has the forethought to actually do what's required, which is to actually document the process of weighing the employer's interest against the interest of the employee, and making sure that that is a documented process. [ Read the UK's ICO guidelines on the process of working out legitimate interest.] [caption id="attachment_10804" align="alignnone" width="800"] When employers claim a legitimate interest exception to getting employee consent, they have more work to do. [Source: UK ICO][/caption]But also what comes with that is the notice requirement, and the notice requirement is something that can be waived. So employers, if they are doing that, are going to have to — and this is basically going to cover every single employer — they're going to have to give their employees notice of the data that they are collecting on them, at a minimum. IOS: At a minimum. I think to summarize what you're saying is it's just so tricky or difficult to get what they call freely given consent, that most employers will rely on legitimate interest. Triggers for Data Protection Impact Assessments (DPIAs) IOS: In the second part of this interview, we joined Sara Jodka as she explains what triggers a data protection impact assessment, or DPIA when processing employee data. SJ: I think that's required when we're doing requirements for sensitive data, and we're talking about sensitive HR data. A DPIA has be performed when two of the following exist, and there's like nine things that have to be there in order for a DPIA to have to be done. But you bring up a great point because the information that an employer is going to have is going to necessarily trigger the DPIA. [See these Working Party 29 guidelines for the nine criteria that Sara refers to.] The DPIA isn't triggered by us doing the legitimate basis ...and having to document that process. It's actually triggered because we process sensitive data. You know, their trade union organization, affiliation, their religious data, their ethnicity. We have sensitive information, which is one of the nine things that can trigger, and all you need is two to require a DPIA. Another one that employers always get is they process data of a vulnerable data subject. A vulnerable data subject includes employees. IOS: Okay. Right. SJ: I can't imagine a situation where an employer wouldn’t have to do a DPIA. The DPIA is different than the legitimate interest outweighing [employee rights] documentation that has to be done. They're two different things. IOS: So, they will have to do the DPIAs? And what would that involve? SJ: Well, it's one thing that's required for high-risk data processing and that, as we just discussed, includes the data that employer has. Essentially what a DPIA is, it's a process that is designed to describe what processing the employer has, assess the necessity on proportionality to help manage the risk to the rights and the freedoms of the national persons resulting from the processing of personal data by assessing and determining the measures to address the data and the protections around it. It's a living document, so one thing to keep in mind about DPIA is they're never done. They are going to be your corporation's living document of the high-risk data you have and what's happening with it to help you create tools for accountability and to comply with the GDPR requirements including, you know, notice to data subject, their rights, and then enforcing those rights. It's basically a tracking document ... of the data, where the data's going, where the data lives, and what happens with the data and then what happens when somebody asks for their data, wants to erase their data, etc. GDPR Surprises for US Companies IOS: Obviously, these are very tricky things and you definitely need an attorney to help you with it. So, can you comment on any other surprises U.S. companies might be facing with GDPR? SJ: I think one of the most interesting points, whenever I was doing my research, to really drill down, from my knowledge level, is you're allowed to process data so long as it's compliant with a law. You know, there's a legal necessity to do it. And a lot of employers, U.S employers specifically, look at this and thought, "Great, that legal requirement takes the load off of me because I need, you know, payroll records to comply with the Fair Labor Standards Act and, you know, state wage laws. I need my immigration information to comply with the immigration control format." You know, they were like, "We have all these U.S. laws of why we have to retain .information and why we have to collect it." Those laws don't count, and I think that's a big shock when I say, well, those laws don't count. We can't rely on U.S. laws to process EU data! We can only rely on EU laws and that's one thing that's brought up and kind of coincides with Article 88, which I think is an interesting thing. If you look at Article 88 when they're talking about employee data, what Article 88 does is it actually allows member states to provide for more specific rules to ensure that the protections and the freedoms of their data are protected. These member states may be adding on more laws and more rights than the GDPR already complies! Another thing is, not only do we have to comply with an EU law, but we also are going to comply with member states, other specific laws that may be more narrow than the GDPR. Employers can't just look at the GDPR, they're going to also have to look at if they know where a specific person is. Whether it's Germany or Poland. They're going to have to look and see what aspects of the GDPR are there and then what additional, more specific laws that member state may have also put into effect. Interviewer: Right! SJ: So, I think that there are two big legal issues hanging out there that U.S. multinational companies... IOS: One thing that comes to my mind is that there are fines involved when not complying to this. And that includes, of course, doing these DPIAs. SJ: The fines are significant. I think that's the easiest way to put it is that the fines are, they're astronomical, I mean, they're not fines that we're used to seeing so there's two levels of fines depending on the violation. And they can be up to a company's 4% of their annual global turnover. Or 20 million Euros. If you'd look at it in U.S. dollar terms, you're looking at, like, $23 million at this point. For some companies that could be, that's a game changer, that's a company shut down. Some companies can withstand that, but some can't. And I think any time you're facing a $23 million penalty, the cost of compliance is probably going to weigh out the potential penalty. Especially because these aren't necessarily one-time penalties and there's nothing that's going to stop the Data Protection Authority from coming back on you and reviewing again and assessing another penalty if you aren't in compliance and you've already been fined once.I think the issue is going to be how far the reach is going to be for U.S. companies. I think for U.S. companies that have, you know, brick and mortar operations in a specific member state, I think enforcement is going to be a lot easier for the DPA. There's going be a greater disadvantage to, actually, enforcement for, you know, U.S. companies that only operate in U.S. soil. Now, if they have employees that are located in the EU, I think that enforcement is going to be a little bit easier, but if they don't and they're merely just, you know, attracting business via their website or whatever to EU, I think enforcement is gonna be a little bit more difficult, so it's going to be interesting to see how enforcement actually plays out. IOS: Yeah, I think you're referring to the territorial scope aspects of the GDPR. Which, yeah, I agree that's kind of interesting. SJ: I guess my parting advice is this isn't something that's easy, it's something that you do need to speak to an attorney. If you think that it ma…

    Full show notes at the publisher

    Varonis CFO & COO Guy Melamed: Preventing Data Breaches and Reducing Risk, Part One Apr 30, 2018
    Show notes

    Recently, the SEC issued guidance on cybersecurity disclosures, requesting public companies to report data security risk and incidents that have a “material impact” for which reasonable investors would want to know about.

    How does the latest guidance impact a CFO’s responsibility in preventing data breaches? Luckily, I was able to speak with Varonis’ CFO and COO Guy Melamed on his perspective.

    In part one of my interview with Guy, we discuss the role a CFO has in preventing insider threats and cyberattacks and why companies might not take action until they see how vulnerable they are with their own data.

    An interview well worth your time, by the end of the podcast, you’ll have a better understanding of what IT pros, finance, legal and HR have on their minds.

    Data security and the CFO: Risk and Responsibility

    Guy Melamed

    My name is Guy Melamed, CFO and COO for Varonis. I have been with the company since 2011. In charge of all the financial statements and execution of strategic operational plans. In charge of the legal department and IR as well and I am enjoying the ride.

    Cindy Ng

    Sounds great. So, today we're gonna be discussing how much it would cost if we don't invest in data security, and let's start with the role of a CFO.

    Right now, data breaches are one of the biggest threats that all companies face, and companies are realizing this and increasingly, they're delegating responsibilities to the CFO. According to a survey by the American Institute of CPAs, 72% of companies, they've asked the finance department to take on more of a responsibility to deal with data breaches and attacks. Why should the CFO be involved in protecting the organization's most sensitive data?

    Guy Melamed

    I think the answer is comprised of a couple of components. One of them has to do with the fact that CFOs are responsible for the financial statements and with recent events and with the amount of breaches that have taken place, there's much more emphasis on the type of disclosure the company has to provide as part of the 10-K and as part of the risk factors and even as part of the MD&A. Just to give you an example, in recent months, the SEC has provided guidance on cybersecurity, board consideration, and the amount of disclosure that needs to be provided. And just to give you a sense in the release, that, as a side note, was provided by the SEC chairman, post the breach that took place in the EDGAR system which is a system that you can log in and see all of the financial statements of all companies, and there was a breach in that system and as a result the SEC had to address from a disclosure perspective what was taken and how they're addressing that event and future events and planning to protect any future event.

    So, that kind of created the guidance that was provided to all of the big four accounting firms, and private, and especially public companies have to address that. That release talks about what is company doing from a risk management perspective, how are they protecting against cybersecurity? It talks about the board's role in overseeing the management and any immaterial cybersecurity risk. And it has a lot of discussion as to what type of disclosure needs to be provided in what event. So, when we received that publication in preparation for our 10-K filing, we had to have a discussion, where to put it, what is the risk, how are we addressing it, and a conversation like that takes place with the legal department. It takes place even with the HR department, with some of the regulation and protecting data. So, there's a lot of components that relate to the CFO's role in order to making sure that we address it properly.

    Cindy Ng

    I actually wanna go back to all the different departments that are involved in addressing the need for preventing data breaches. How would an organization include that in a conversation if they didn't have the structure for it?

    Guy Melamed

    Well, the organization first has to understand where the data resides and who has access to the data. And in a recent survey that we published, approximately 50% of the companies have more than a thousand sensitive files open to everyone in the company. That's an unheard of number. Think about it. If you have one sensitive file, one file that has the full payroll information for an organization, and that file gets to the wrong hands, that can destroy a company, you have a little more than a thousand sensitive files. So, the risk is very significant and approximately 20% of the data on average is open to everyone in the company. That's a risk a company must take action against. So, step number one is realize where your risk resides and if you don't have access, and you don't know who has access to what type of folder, who's opening the folder, who's deleting the folder, then you're blindsided.

    So, I think that's step number one. There's additional risks that take place on a day to day, and if I've given you an example from the finance department, if an employee is on warning, goes through a PIP, and he has access to sensitive information, you wanna make sure that that information that he has access to stays within the company, and that an employee isn't accessing more and more information in preparation for departure. So, that's a risk that relates to the finance organization, but relates to so many other departments as well. There's IP that, you know, personnel within the R&D department wanna make sure is protected. There's obviously information related to customers and payroll information and HR and legal and the list just goes on and on. So, the desire is first of all just to be able to know what you need to protect and then who's protecting it, who has access to it and being able to see any abnormal behavior that's taking place within an organization.

    Don't We Have an Audit Trail?

    Cindy Ng

    So, you have deep expertise in risk and some technical knowledge. There was a survey among cybersecurity professionals and 41% of them think that their CFOs have a major gap in their technical expertise in risk or they don't understand their risk at all. You've alluded to some of their risk. What is your recommendation to other CFOs or other individuals who wanna improve their knowledge gap? Who should their trusted advisors be?

    Guy Melamed

    Well, first of all, I don't think I have deep expertise on the technological side or in understanding risk, but I have been around enough to understand that the biggest gap between the finance department and the IT or security department has to do with misconceptions. And if you ask, and just to give an example, what we see many times that takes place in our selling process, our selling process, for anyone that doesn't know, is very visual. So, we can talk about risk with our potential customers but a conversation doesn't get elevated until customers see how vulnerable they are with their own data, and I guess that's just human nature. Everyone thinks that they'll be okay until they see how open and how much data is open to everyone in the company and how many sensitive files could be accessed by people that shouldn't have access to that.

    So, one of the examples that we see during a selling process is that if we sit showing that risk assessment or even having an initial conversation with someone from the IT or a CISO, and also with a legal department member or a finance member, and we ask one simple question, "If today, 10,000 files would have been deleted, would you know about it?" The answer from the CISO or from the IT personnel is, "Absolutely not. We don't have any ability to know if someone deleted 10,000 files."

    But if you ask a finance person or someone from the legal department or an HR personnel, I think the misconception or their automatic reaction would be that there has to be a way and that it seems unreasonable that a company isn't tracking if 10,000 files got deleted today. That, I believe is one of the gaps that has to be breached and the education from the finance side is making sure that you know what the company's tracking and what we're not tracking and if an employee is about to leave, do we have any type of monitoring to make sure that sensitive files aren't taken and provided to a competitor or are even used in the future by that, what would be an ex-employee later on.

    So, there's a lot of components on the daily operations. There's a lot of risks that company has to think about and always kind of go through the process of what can go wrong. Maybe it hasn't happened and maybe everything is good now and we trust all of our employees, but what if? And I think the notion that when you have organizations with 1,000 employees or 20,000 employees or 50,000 employees, the notion that all of the employees are ethical is a bit scary and you have to think how to protect the company in the best way.

    Cost of a Data Breach

    Cindy Ng

    What's most compelling for me is that there's a disconnect between IT and the rest of the departments, where IT thinks that, "I really wanna protect everyone's data, but there's no ability to do so."

    Meanwhile, finance, legal, and HR, they think, "Oh, hasn't that problem been already solved? It's a little unreasonable," as you've said, "if we weren't able to figure that out."

    So, let's talk about the cost of a breach. So, it's been said that the average cost of a data breach is about four million, and there are many organizations that have paid tens of millions of dollars. What are some direct costs and indirect costs to businesses associated with data breaches?

    Guy Melamed

    So, a data breach, from a quantifiable perspective, depends on what was taken, when it was taken, who was it taken by, and who was it provided to. So, there is a lot of components, and I think it would be very hard for me to throw out a number. But what I would say is that a breach is a disruption to the business in so many levels. It's a disruption from the sense of finding out what was taken, the risk of that information being provided to your competitors, even the risk of taking financial information and providing it before it was published.

    What I would think about is would a CFO, or a COO for that matter, be comfortable with providing their financial statements to a competitor two weeks before they were published? Obviously the answer is, no, and there could be detrimental consequences to that type of breach.

    But the breach isn't just on the financial information. There is customer information, there is payroll information. There's just so much sensitive file that sits there that people within the organization have access, and it doesn't necessarily mean that they would break bad. It could be a situation where someone from the outside took control of the credentials of an employee within the organization and starts using that access in the wrong way. So, the notion, and I think what we've seen as a company, as one of the most interesting phenomenas, is that some of the breaches that took place in 2014 really generated a knee jerk reaction and there was a significant IT spent during the beginning of 2015. But that spent at the beginning of the year was mostly towards perimeter defense security. The notion was that if you're protecting the border, you'll be okay. And I think what's been proven day in, day out is that perimeter defense security is absolutely important but the notion that that's the only type of defense that you need has been thrown out the window.

    And if you use the same analogy of border patrol or protecting a country, the fact that you have protection on the border doesn't mean that you don't have any other measures and any other organizations that protect you from the inside. Because at one point there is gonna be someone that will be able to overcome that border. Not only that, how are you protecting your organization or your country from people from the inside? So, what we've seen in the last couple years is that the amount of breaches that have taken place have increased significantly. The magnitude has increased significantly, the implications on those companies has increased significantly.

    And I know there was an article a couple years ago that discussed the cost of a breach and how you shouldn't buy any software and you can just deal with a breach. That notion has been thrown out the window and, you know, it's obviously that the consequences of a breach that we see it on the news and on the front page of "The Wall Street Journal" and "The Financial Times." It's happening in rates that we haven't seen before and I don't see that going away.

    Want to join us live? Save a seat here: https://www.varonis.com/state-of-cybercrime

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    Dr. Wolter Pieters on Information Ethics, Part Two Apr 23, 2018
    Show notes

    In part two of my interview with Delft University of Technology’s assistant professor of cyber risk, Dr. Wolter Pieters, we continue our discussion on transparency versus secrecy in security.

    We also cover ways organizations can present themselves as trustworthy. How? Be very clear about managing expectations. Declare your principles so that end users can trust that you’ll be executing by the principles you advocate. Lastly, have a plan for know what to do when something goes wrong.

    And of course there’s a caveat, Wolter reminds us that there’s also a very important place in this world for ethical hackers. Why? Not all security issues can be solved during the design stage.

    Transparency versus Secrecy

    Wolter Pieters

    My name is Wolter Pieters. I have a background in both computer science and philosophy of technology. I'm very much interested in studying cyber security from an angle that either goes a bit more towards the social science, so, why do people behave in certain ways in the cyber security space. But also more towards philosophy and ethics, so, what would be reasons for doing things differently in order to support certain values.

    Privacy, but then again, I think privacy is a bit overrated. This is really about power balance. It's because everything we do in security will give some people access and exclude other people, and that's a very fundamental thing. It's basically about power balance that is through security we embed into technology. And that is what fundamentally interests me in relation to security and ethics.

    Cindy Ng

    How do we live in now world where you just don't know whether or not organizations or governments are behaving in a way that's trustworthy?

    Wolter Pieters

    You know, transparency versus secrecy is a very important debate within the security space. This already starts out very fundamentally from the question like, "Should methods for protecting information be publicly known or should they be kept secret because otherwise we may be giving too much information away to hackers, etc?" So, this is a very fundamental thing and in terms of encryption already, there's the principle like, "Hey, encryption algorithms should be publicly known because otherwise we can't even tell how well our information is being protected by means of that encryption and only the keys using encryption should be kept secret." This is a principle called Kerckhoff’s Principle. This is very old and information in security and a lot of the current encryption algorithms actually adhere to that principle and we've also seen encryption algorithms not adhering to that principle.

    So, algorithms that were secrets, trade secrets, etc. being broken very moments the algorithm became known. So, in that sense there I think most researchers would agree this is good practice. On the other hand it's seems that there's also a certain limit to what we want to be transparent there. Both in terms of security controls, we're not giving away every single thing governments do in terms of security online. So, there is some level of security by obscurity there and more generally to what extent is transparency a good thing. This again ties in with who is a threat. I mean, we have the whole WikiLeaks endeavor and some people will say, "Well, this is great. The government shouldn't be keeping all that stuff secret." So, it's great for trust that this is now all out in the open. On the other hand, you could argue all this and this is actually a threat to trust in the government. So, this form of transparency would be very bad for trust.

    So, there's clearly a tension there. Some level of transparency may help people trust in the protections embedded in the technology and in the actors that use those technologies online. But on the other hand, if there's too much transparency all the nitty-gritty details may actually decrease trust. You see this all over the place. We've seen it through with the electronic voting as well. If you provide some level of explanation on how certain technologies are being secured, that may help. If you provide too much detail people won't understand it and it will only increase distrust. There is a kind of golden middle there in terms of how much explanation you should give to make people trust in certain forms of security encryption, etc. And again, in the end people will have to rely on experts because physical forms of security, physical ballot boxes, it's possible to explain and how these work and how they are being secured with digital that becomes much more complicated and for most people, they will have to trust the judgment of experts that these forms of security are actually good if the experts believe so.

    What Trustworthy Organizations Do Differently

    Cindy Ng

    What's something an organization can do in order to establish themselves as a trustworthy, morally-sound, ethical organization?

    Wolter Pieters

    I think the most important thing that companies can do is very clear in terms of managing expectations. So, couple of examples there, if as a company you decide to provide end-to-end encryption for communications. The people that use your or your jet app exchange messages get the assurance that the messages are encrypted between their device and the device of the one that they're communicating with. And this is a clear statement like, "Hey, we're doing it this way." And that also means that then you shouldn't have any backdoors or means to give this communication away to need the intelligence agencies anyway. Because if this is your standpoint, and people need to be able to trust in that. Similarly, if you are running a social network site and you want people to trust in your policies then you need to be crystal clear.

    Not only that it's possible to change your privacy settings, to regulate the access that other use of the social networking servers have to your data, but at the same time you need to be crystal clear about how you as a social network operator are using the kind of data. Because sometimes I get the big internet companies are offering all kinds of privacy settings which give people the impression that they can do a lot in terms of their privacy but, yes, this is true for the inter user data access but the provider still sees everything. This seems to be a way of framing privacy in terms of inter user data access. Whereas, I think it's much more fundamental what these companies can do with all the data they gather for all their use and what that means in terms of their power and the position that they get in this whole area of cyberspace this whole arena.

    So, managing expectations, I mean, there's all kinds of different standpoints also based on different ethical theories, based on different political points of view that you could take in this space. If you want to behave ethically then make sure you list your principles, you list what you do in terms of security and privacy to adhere to those principles and make sure that people can actually trust that this is also what you do in practice. And also make sure that you know exactly what you're going to do in case something goes wrong anyway. We've seen too many breaches where the responses by the companies were not quite up to standards in terms of delaying the announcement of the breach or it's crucial to not only do some prevention in terms of security and privacy but also know what you're going to do in case something goes wrong.

    Doomsday Scenarios

    Cindy Ng

    Yeah, you say, if an IoT device gets created and they get to market their product first and then they'll fix security and privacy later, that's too late. Is it sort of like, "We're doomed already and we're just sort of managing the best way we know how?"

    Wolter Pieters

    In a way, it's a good thing when we are nervous about where our society is going because in history at moments where people weren't nervous enough about where society was going, we've seen things go terribly wrong. So, in a sense we need to get rid of the illusion that we can easily be in control or something like that because we can't.

    The same for elections, there is no neutral space from which people can cast their vote without being influenced and we've seen in recent elections that actually technology is playing more and more of a role in how people perceive political parties and how to make decisions in terms of voting. So, it's inevitable that technology companies have a role in those elections and that's also what they need to acknowledge.

    And then of course, and I think this is a big question that needs to be asked, "Can we prevent the situation in which the power of certain online stakeholders whether those are companies or are there for a nation state or whatever. Can we prevent a situation in which they get so much power that they are able to influence our governments, either through elections or through other means?" That's a situation that we really don't want to be in and I'm not pretending that I have a crystal clear answers there but this is something that at least we should consider as a possible scenario.

    And then there's all these doomsday scenarios with Cyber Pearl Harbor and I'm not sure whether these doomsday scenarios are the best way to think about this but we should also not be naive and think that all of this will blow over because maybe indeed we have already been giving away too much power in a sense. So, what we should do is fundamentally rethink the way we think about security and privacy from, "Oh, damn, my photos are I don't know whatever, in the hands of whoever." That's not the point. It's about the scale in which the certain actors either get their hands on data or lots of individuals are able to influence lots of individuals. So, again scale comes in there. It's not about our individual privacy, it's about the power that these stakeholders get by having access to the data over by being able to influence lots and lots of people and that's what the debate needs to be about.

    Cindy Ng

    Whoever has the data has power, is what you're getting at.

    Wolter Pieters

    Whoever has the data and in a sense that data can then, again, be used also to influence people in a targeted way. If you know that somebody's interested in something, you can try to influence their behavior by referring to the thing that they're interested in.

    Cindy Ng

    That's only if you have data integrity.

    Wolter Pieters

    Yes. Yes, of course. But on the other hand, little bit of noise in the data doesn't matter too much because if you have data that's more or less correct, you can still achieve a lot.

    Ethical Hackers Have An Important Role

    Cindy Ng

    Anything that I didn't touch upon that you think is important for our listeners to know?

    Wolter Pieters

    The one thing that I think is critically important is the role that ethical hackers can have in keeping people alert, in a way maybe even changing the rules of the game, because in the end I also don't think that all security issues can be solved in the design of technology and it's critically important that when technology are being deployed that people keep an eye on issues that may have been overlooked in the design stage of those technologies. We need some people that are paying attention and will be alerting us to issues that may emerge.

    Cindy Ng

    It's a scary role to be in though if you're an ethical hacker because what if the government comes around and accuses you being an unethical hacker?

    Wolter Pieters: Yeah. I think that's an issue but if that's going to be happening, if people are afraid to play this role because legislation doesn't protect them enough, then maybe we need to do something about that. If we don't have people that point us to essential weaknesses in security, then what will happen is that those issues will be kept secret and that they will be misused in ways that we don't know about and I think that's much worse situation to be in.

    Want to join us live? Save a seat here: https://www.varonis.com/state-of-cybercrime

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    41% of organizations have at least 1,000 sensitive files open to all employees Apr 16, 2018
    Show notes

    This week, we talk about our annual data risk assessment report and sensitive files open to every employee! 41% of companies are vulnerable. The latest finding put organizations at risk as unsecure folders give attackers easy access to business roadmaps, intellectual property, financial and health data, and more. We even discussed how data open to everyone in an organization relates to user-generated data shared with 3rd party apps. Is it a data security or privacy problem? At the very least, panelists think it’s a breach of confidence.

    Other articles discussed:

    • Dead people’s privacy rights
    • Bill Gates’ former cybersecurity adviser on being your own CISO.
    Tool of the Week: Charles, Web Debugging Proxy Application

    Panelists: Cindy Ng, Mike Buckbee, Kilian Englert, Kris Keyser

    Want to join us live? Save a seat here: https://www.varonis.com/state-of-cybercrime

    More from Varonis ⬇️

    Visit our website: https://www.varonis.com

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    Varonis Track at RSA 2018 Apr 09, 2018
    Show notes

    We’re all counting down to the RSA Conference in San Francisco April 16 – 20, where you can connect with the best technology, trends and people that will protect our digital world.

    Attendees will receive a Varonis branded baseball hat and will be entered into a $50 gift card raffle drawing for listening to our presentation in our North Hall booth (#3210).

    Attendees that visit us in the South Hall (#417) will receive a car vent cell phone holder.

    In addition to stopping by our booth, below are sessions you should consider attending. You’ll gain important insights into best security practices and data breach prevention tips, while learning how to navigate a constantly evolving business climate.

    Sessions Discussed:

    • Protecting Enterprise Data with the National Security “100 Coins” Approach
    • Turtles, Trust and the Future of Cybersecurity
    • The EU’s General Data Protection Regulation—Beauty or Beast?
    • Hacking Healthcare Live: Bits and Bytes Meet Flesh and Blood
    • Decision-Maker Dementia: How Today’s Security Leaders Stay Lucid
    Panelists: Cindy Ng, Mike Thompson, Kilian Englert, Kris Keyser

    Want to join us live? Save a seat here: https://www.varonis.com/state-of-cybercrime

    More from Varonis ⬇️

    Visit our website: https://www.varonis.com

    LinkedIn: https://www.linkedin.com/company/varonis

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    Dr. Wolter Pieters on Information Ethics, Part One Mar 30, 2018
    Show notes

    In part one of my interview with Delft University of Technology’s assistant professor of cyber risk, Dr. Wolter Pieters, we learn about the fundamentals of ethics as it relates to new technology, starting with the trolley problem. A thought experiment on ethics, it’s an important lesson in the world of self-driving cars and the course of action the computer on wheels would have to take when faced with potential life threatening consequences. Wolter also takes us through a thought track on the potential of power imbalances when some stakeholders have a lot more access to information than others. That led us to think, is technology morally neutral? Where and when does one’s duty to prevent misuse begin and end? Transcript Wolter Pieters: My name is Wolter Pieters. I have a background in both computer science and philosophy of technology. I'm very much interested in studying cyber security from an angle that either goes a bit more towards the social science, so, why do people behave in certain ways in the cyber security space. But also more towards philosophy and ethics, so, what would be reasons for doing things differently in order to support certain values. Privacy, but then again, I think privacy is a bit overrated. This is really about power balance. It's because everything we do in security will give some people access and exclude other people, and that's a very fundamental thing. It's basically about power balance that is through security we embed into technology. And that is what fundamentally interests me in relation to security and ethics. Cindy Ng: Let's go back first and start with philosophical, ethical, and moral terminology. The trolley problem: it's where you're presented two dilemmas, where you're the conductor and you see the trolley is going down a track and it has the potential to kill five people. But then if you pull a lever, you can make the trolley go on the other track where it would kill one person. And that really is about: what is the most ethical choice and what does ethics mean? Wolter Pieters: Right. So, ethics generally deals with protecting values. And values, basically, refer to things that we believe are worthy of protection. So, those can be anything from health, privacy, biodiversity. And then it's said that some values can be fundamental, others can be instrumental in the sense that they only help to support other values, but they're not intrinsically worth something in and of themselves. Ethics aims to come up with rules, guidelines, principles that help us support those values in what we do. You can do this in different ways. You can try to look only at the consequences of your actions. And in this case, clearly, in relation to the trolley problem, it's better to kill one person than to kill five. If you simply do the calculation, you know, you could say, "Well, I pull the switch and thereby reduce the total consequences." But you could also argue that certain rules state like you shall not kill someone, which would be violated in case you pull the switch. I mean, if you don't do something, then five people would be killed. Then you don't do something explicitly, whereas you would pull the switch you would explicitly kill someone. And from that angle, you could argue that you should not pull the switch. So, this is very briefly an outline of different ways in which you could reason about what actions would be appropriate in order to support certain values, in this case, life and death. Now, this trolley problem is these days often cited in relation to self-driving cars, which also would have to make decisions about courses of action, trying to minimize certain consequences, etc. So, that's why this has become very prominent in the ethics space. Cindy Ng: So, you've talked about a power in balance. Can you elaborate on and provide an example on what that means? Wolter Pieters: What we see in cyberspace is that there are all kinds of actors, stakeholders that gather lots of information. There's governments being interested in doing types of surveillance in order to catch the terrorist amongst the innocent data traffic. There is content providers that give us all kinds of nice services, but at the same time, we pay with our data, and they make profiles out of it and offers targeted advertisements and, etc. And at some point, some companies may be able to do better predictions than even our governments can do. So, what does that mean? In the Netherlands, today actually, there's a referendum regarding new powers for the intelligence agencies to do types of surveillance online, so there's a lot of discussion about that. So, on the one hand, we all agree that we should try to prevent terrorism, etc. On the other hand, this is also a relatively easy argument to claim access to data, they're like, "Hey, we can't allow these terrorists attacks, so we need all your data." It's very political. And this also makes it possible to kind of leverage security as an argument to claim access to all kinds of things. Cindy Ng: I've been drawn to ethics and the dilemma of our technology, and because I work at a data security company, you learn about privacy regulations, GDPR, HIPAA, SOX compliance. And at the core, they are about ethics and a moral standard of behavior. And can you address the tension between ethics and technology? And the best thing I read lately was Bloomberg's subhead that said that ethics don't scale. When ethics is such a core value, but at the same time, technology is sort of what drives economies, and then add an element of a government to overseeing it all. Wolter Pieters: There's a couple of issues here. One is that's often cited is that ethics and law seem to be lagging behind compared to our technological achievements. We always have to wait for new technology to kind of get out of hand before we start thinking about ethics and regulation. So, in a way, you could argue that's the case for internet of things type developments where manufacturers of products have been making their products smart for quite a while now. And we suddenly realized that all of these things have security vulnerabilities, and they and they can become part of botnets of cameras that can then be used to do distributed denial of attacks on our websites, etc. And only now are we starting to think about what is needed to make sure that these and other things, devices are securable at some level. Can they be updated? Can they be patched? In a way, it already seems to be too late. So, it is the argument then that is lagging behind. On the other hand, there's also the point that ethics and norms are always in a way embedded in technologies. And again, in the security space, whatever way you design technology, it will always enable certain kinds of access, and it will disable other kinds of access. So, there's always this inclusion, exclusion going on with new digital technologies. So, in that sense, increasingly, ethics is always already present in a technology. And I'm not sure whether ethics, whether it should be said that ethics doesn't scale. Maybe the problem is rather that it scales too well in the sense that, when we design a piece of technology, we can't really imagine how things are going to work out if the technology is being used by millions of people. So, this holds for a lot of these elements. And then the internet when it was designed, it was never conceived as a tool that would be used by billions. It was kind of a network for research purposes to exchange data and everything. So, same for Facebook. It was never designed as a platform for an audience like this, which means that, in a sense, that the norms that are initially being embedded into those technologies do scale. And if, for example, for the internet, you don't embed security in it from the beginning and then you scale it up, then it becomes much more difficult to change it later on. So, ethics does scale, but maybe not in the way that we want it to scale. Cindy Ng: So, you mentioned Facebook. And Facebook is not the only tech company that design systems to allow data to flow through so many third parties, and when people use that data in a nefarious way, the tech company can respond to say, you know, "It's not a data breach. It's how things were designed to work and people misused it." Why does that response feel so unsettling? I also like what you said in the paper you wrote that we're tempted to consider technology as morally neutral. Wolter Pieters: There's always this idea of technology being kind of a hammer, right? I need a hammer to drive in the nail and so, it's just a tool. Now, information flow technology has been discussed for a while that there will always be some kind of side effects. And we've learned that technologies pollute the environment, technologies cause safety hazards, nuclear incidents etc., etc. And in all of these cases, when something goes wrong, there are people who designed the technology or operate the technology who could potentially be blamed for these things going wrong. Now, in the security space, we're dealing with intentional behavior of third parties. So, they can be hackers, they can be people who misuse the technology. And then suddenly it becomes very easy for those designing or operating the technology to point to those third parties as the ones to blame. You know, like, "Yeah. We just provide the platform. They misused it. It's not our fault." But the point is, if you follow that line of reasoning, you wouldn't need to do any kind of security. Just say, "Well, I made a technology that has some useful functions," and, yes, then there's these bad guys that misuse my functionality." On the one hand, it seems natural to kind of blame the bad guys or the misusers of whatever. On the other hand, if you only follow that line of reasoning, then nobody would need to do any kind of security. So, this means that you can't really get away with that argument in general. Then, of course, with specific cases, and then it becomes more of a gray area, where does your duty to prevent misuse stop? And then you get into the area, okay, what is an acceptable level of protection security? But also, of course, there's the business models of these companies involve giving access to some parties, which the end users may not be fully aware of. And this has to do with security always being about who are the bad guys? Who are the threats? And some people have different ideas about who the threats are than others. So, if a company gets a request from the intelligence services like, "Hey, we need your data because we would like to investigate this suspect." Is that acceptable or maybe some people see that as a threat as well. So, the labeling of who are the threats? Are the terrorists the threats? Are the intelligence agencies the threats? Are the advertising companies the threats? This all matters in terms of what you would consider acceptable or not from a security point of view. Within that space, it is often not very transparent to people what could or could not be done with the data. And then the European legislation is trying, in particular, to require consent of people in order to process their data in certain kinds of ways. Now that, in principle, seems like a good idea. In practice, consent is often given without paying too much attention to the exact privacy policies etc., because people can't be bothered to read all of that. And in a sense, maybe that's the rational decision because it would take too much time. So, that also means that, if we try to solve these problems by letting individuals give consent to certain ways of processing their data, this may lead us to a situation where individually, everybody would just click away the messages because for them it's rational like, "Hey, I want this service and I don't have time to be bothered with all these legal stuff." But on a societal level, we are creating a situation where indeed certain stakeholders in the internet get a lot of power because they have a lot of data. This is the space in which decisions are being made. Cindy Ng: We rely on technology. A lot of people use Facebook. We can't just say goodbye to IoT devices. We can't say goodbye to Facebook. We can't say goodbye to any piece of technology because as you've said, in one of your papers, that technology will profoundly change people's lives, and our society. Instead of saying goodbye to this wonderful thing that we've created or things, how do we go about living our lives and conducting ourselves with integrity, with good ethics, and morals? Wolter Pieters: Yeah. That's a good question. So, what currently seems to be happening is that, indeed, a lot of this responsibility is being allocated to the end users. Like, you decide whether you want to join social media platforms or not. You decide what to share there. You decide whether to communicate with end-to-end encryption or not, etc., etc. So, this means that a lot of pressure is being put on individuals make those kinds of choices. And the fundamental question is whether that approach makes sense, whether that approach scales, because the more technologies people are using, the more decisions they will have to make about how to use these kinds of technologies. Now, of course, there are certain basic principles that you can try to adhere to when doing your stuff online. But on the security sides, watch out of phishing emails, use strong passwords etc., etc. On the privacy side, don't share stuff off from other people that they haven't agreed to etc., etc. But all of that requires quite a bit of effort on the side of the individual. And at the same time, there seems to be pressure to share more and more and more stuff even...and, for example, pictures of children that aren’t even able to consent to whether they want their pictures posted or not. So, it's, in a sense, there's a high moral demand on users, maybe too high. And that's a great question. In terms of acting responsibly online, now, if at some point you would decide that we're putting too high a demand on those users, and the question is like, "Okay, are there possible ways to make it easier for people to act responsibly?" And then you would end up with certain types of regulation that don't only delegate responsibility back to individuals, like, for example, asking consent, but putting really very strict rules on what, in principle, is allowed or not. Now, that's a very difficult debate because you usually end up also in accusations of paternalism, like, "Hey, you're putting all kinds of restrictions on what can or cannot be done online." But why shouldn't people be able to decide for themselves? For instance, on the other hand, people being overloaded with decisions to the extent that it becomes impossible for them to make those decisions responsibly. This, on the one hand, leaving all kinds of decisions to the individual versus making some decisions on a collective level that's gonna be a very fundamental issue in the future. Want to join us live? Save a seat here: https://www.varonis.com/state-of-cybercrimeMore from Varonis ⬇️ Visit our website: https://www.varonis.comLinkedIn: https://www.linkedin.com/company/varonisX/Twitter: https://twitter.com/varonisInstagram: https://www.instagram.com/varonislife/

    Full show notes at the publisher

    I’m Elena Khasanova, Professional Services Manager at Varonis, and This is How I Work Mar 28, 2018
    Show notes

    Prior to Varonis, Elena Khasanova worked in backend IT for large organizations. She did a bit of coding, database administration, project management, but was ready for more responsibility and challenges.

    So seven years ago, she made the move to New York City from Madison, Wisconsin and joined the professional services department at Varonis.

    With limited experience speaking with external customers and basic training, Varonis entrusted her to deploy products as well as present to customers. Elena recalls, “Not every company will give you a chance to talk to external customers without prior experience….But it was Varonis that gave me that chance.”

    According to her manager, Ken Spinner:

    Over the last 6 years, I’ve had the pleasure of working with Elena, first as a coworker in different departments, and most recently as the leader of our Remediation Team in our Professional Services department. Elena was uniquely qualified to lead the team as she had significant experience performing project management prior to planning and completing our first remediation projects. Elena’s knowledge was instrumental in defining the essence of the Varonis Data Risk Assessment, the process used by PS to perform remediation, as well as providing practical insight to Engineering during the development of the Automation Engine.

    Read on to learn more about Elena – this time, in her own words.

    What would people never guess you do in your role?

    Not only am I involved in professional services, I also spend a lot of time on sales calls.

    What did you learn about yourself after working at Varonis?

    I am pretty good at selling concepts and ideas.

    How has Varonis helped you in your career development?

    Prior to Varonis, I only worked in internal IT. Varonis gave me a chance to work with external customers and exposed me to sales and product management.

    What advice do you have for prospective candidates?

    Pour your heart and soul into Varonis products. If you are smart and hard-working, it will be noticed right away.

    What do you like most about the company?

    Despite being a publicly traded company, it kept its startup spirit and passion.

    What’s the biggest data security problem your customers/prospects are faced with?

    Company files are often accessible by every employee regardless of their roles. How can we fix that without someone losing access to work they really need access to?

    What certificates do you have?

    CISSP and PMP

    What is your favorite book?

    Big Magic by Elizabeth Gilbert

    What is your favorite time hack?

    I assign values in my to-do list by urgency: important (not always urgent but is important in the long run), speed and reluctance.

    Things I’m most reluctant to do, I try to do in the beginning of the day when my willpower is still high.

    What’s your favorite quote?

    "It would not be much of a universe if it wasn't home to the people you love."

    – by the greatest scientist, Stephen Hawking

    Want to join us live? Save a seat here: https://www.varonis.com/state-of-cybercrime

    More from Varonis ⬇️

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    Are Users and Third-Party Vendors Frenemies? Mar 22, 2018
    Show notes

    In the midst of our nationwide debate on social media companies limiting third party apps’ access to user data, let’s not forget that companies have been publicly declaring who collects our data and what they do with it. Why? These companies have been preparing for GDPR, the new EU General Data Protection Regulation as it will go into effect on May 25th.

    This new EU law is a way to give consumers certain rights over their data while also placing security obligations on companies holding their data.

    In this episode of our podcast, we’ve found that GDPR-inspired disclosures, such as Paypal’s, leave us with more questions than answers.

    But, as we’ve discussed in our last episode, details matter.

    Other articles discussed:

    • Apple iCloud also stores data on Google’s servers
    • New SEC guidance on reporting data security risk
    • What C-Suite executives need to know when it comes to security
    • Laughing Alexa
    Tool of the Week: S3tk

    Panelists: Cindy Ng, Kilian Englert, Mike Buckbee, Matt Radolec

    Want to join us live? Save a seat here: https://www.varonis.com/state-of-cybercrime

    More from Varonis ⬇️

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    Details Matter in Breaches and in Business Mar 08, 2018
    Show notes

    With one sensational data breach headline after another, we decided to take on the details behind the story because a concentrated focus on the headline tends to reveal only a partial dimension of the truth.

    For instance, when a bank’s sensitive data is compromised, it depends on how as well as the what. Security practitioner Mike Buckbee said, “It’s very different if your central data storage was taken versus a Dropbox where you let 3rd party vendors upload spreadsheets.”

    We’re also living in a very different time when everything we do in our personal lives can potentially end up on the internet. However, thanks to the EU’s “right to be forgotten” law, the public made 2.4 million Google takedown requests. Striking the perfect balance will be difficult. How will the world choose between an organization’s goals (to provide access to the world’s information) versus an individual’s right to be forgotten?

    And when organizations want to confidently make business decisions based on data-driven metrics, trusting data is critical to making the right decision. Our discussion also reminded me what our favorite statistician Kaiser Fung said in a recent interview, “Investigate the process behind a numerical finding.”

    Other articles discussed:

    • Why I quit Google
    • Balancing security and user productivity
    • 12 best practices for user account, authorization and password management
    Tool of the week: Bettercap

    Panelists: Cindy Ng, Kilian Englert, Forrest Temple, Mike Buckbee

    Want to join us live? Save a seat here: https://www.varonis.com/state-of-cybercrime

    More from Varonis ⬇️

    Visit our website: https://www.varonis.com

    LinkedIn: https://www.linkedin.com/company/varonis

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    Innovate First, Deliver PSAs Later Feb 28, 2018
    Show notes

    Today even if we create a very useful language, IoT device, or software, at some point, we have to go back to fix the security or send out PSAs.

    Troy Hunt, known for his consumer advocacy work on breaches, understands this very well. He recently delivered a very practical PSA: Don’t tell people to turn off Windows update, just don’t.

    We also delivered a few PSAs of our own: cybercriminals viewour linkedin profiles to deliver more targeted phish emails, whether we’d prefer to deal with ransomware or cryptomalware, and the six laws of technology everyone should know.

    Tool of the week: MSDAT

    Panelists: Cindy Ng, Forrest Temple, Kilian Englert, Mike Buckbee

    Want to join us live? Save a seat here: https://www.varonis.com/state-of-cybercrime

    More from Varonis ⬇️

    Visit our website: https://www.varonis.com

    LinkedIn: https://www.linkedin.com/company/varonis

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