[BreachExchange] Cyber security - increased challenges for institutions

[Inga Goddijn]

http://www.lexology.com/library/detail.aspx?g=4a50ba9a-d1df-4547-812a-03d4477a8e29

*The education sector is rapidly embracing technology. Laptops, tablets and
internet connected devices are increasingly the first choice learning tool
for students and staff across schools and universities. The advance in use
of user powered digital technologies poses significant challenges for
institutions in particular, in protecting its network against infiltration,
compromise or attack. In this article, we look at some of the key risks for
institutions to consider and address.*

The emerging risks:

*More gateways*

An unsecured network made up of multiples of devices is, essentially, a
labyrinth of open doors for hackers. This risk is more prevalent by the
increasingly common implementation of `bring your own device' (BYOD)
policies at schools and universities. Take the example of a student who
inadvertently infects their personal device with malware by downloading an
infected file, clicking on an infected link or by falling victim to a
phishing scam. As a device connected to the institution's network, this
user's infected device could easily be the source of the institution's next
data compromise.

*Smarter students*

Hackers are not only those external demons who wish to steal information or
compromise systems. Academic fraud through internal infiltration is
becoming increasingly common. Open networks provide easy gateways for
students to access devices held by an examinations board, an assessor or a
fellow student. Recent examples include students accessing and plagiarising
work in progress on other students' devices, and accessing and amending
assessment transcripts and scores.

*Third party liability*

Use of a network connected laptop or device for purposes not approved by
the institution's use policy not only increases the risk of malware, but
also the risk of third party liability. As consumer awareness as to privacy
and information security increases, counterparty expectation as to security
policies is also growing. Take the example of a student breaching copyright
or accessing inappropriate materials through the network and the increased
risk this poses. Third party victims may look to join the institution to
claim, on the basis of failure to have sufficiently secure policies that
can detect misuse.

*Tighter privacy regulations*

Educational institutions collect and store information of a personal nature
(including student names, addresses, health records, financial and credit
information etc). They are, therefore, subject to regulation under local
privacy legislation (for example in Australia, the Privacy Act 1988 and in
the UK, the Data Protection Act 1998). This requires clear systems and
procedures to be in place to protect and manage that information in a way
that complies with local law. Failure to have such systems in place could
result in fines and penalties of up to AUDUSD 1.3 million (USUSD 940,000)
in Australia and fines up to GBP 500,000 (USUSD 720,000) in the UK. The UK
(and Europe wide) penalty is set to increase under the General Data
Protection Regulation (GDPR), to an upper limit of 20 million or 4% or
annual global turnover (whichever is higher).

The data protection regulatory landscape in the UK and in the rest of
Europe will soon be significantly altered. On 14 April 2016, the European
Parliament adopted the GDPR. This marks the final stage of the legislative
process paving the way for the patchwork of national data protection laws,
created by the European Data Protection Directive passed in 1995, to be
replaced with a uniform law across the European Union. In the UK the rules
will replace the Data Protection Act 1998.

UK and European Institutions have less than two years to prepare for the
new rules and would be well advised to start now before the GDPR comes into
force on 25 May 2018. A raft of new guidance will be issued by EU bodies
and national authorities in the coming months which should assist with
preparations.

An added complexity for businesses may be the implications of Brexit on the
UK's implementation of the new rules. If the UK votes to leave the EU,
there will be a two year negotiation period to determine the UK's onward
relationship with the EU.

Education Institutions should also be mindful of data protection and
privacy issues when expanding internationally. In the UAE, for example,
although the bar for achieving compliance with the UAE laws relating to
privacy is currently low, we consider that certain practices adopted to
achieve compliance in more heavily regulated jurisdictions (such as
Australia and the UK) can be beneficial. For example, ensuring that third
party processors are bound by written terms imposing obligations on them
(including relating to the extent of the processing and the data security
standards to be adopted to protect the data from loss or destruction), will
help to limit the disclosing party's liability arising from unauthorised
use of that data. Similarly, providing information about the potential uses
of personal data to a parent or student at the outset of the relationship
can generate goodwill, act as an effective means of managing expectations
and could even mitigate the risk of a complaint or claim being filed for
damages in relation to the use of an individual's data.

We also understand that the UK Data Protection Commissioner is currently
focusing on UK institutions who are expanding internationally to make sure
they apply the same standards in territories where they are active.

*Network oversight*

In complying with their obligations under the GDPR, both data controllers
and processors are obligated to implement appropriate technical and
organisational measures to ensure a level of security appropriate to the
personal data they are processing. The GDPR mandates a list of requirements
which should be taken into account and these should be considered when
implementing any measures in respect of cyber security. These technical and
organisational measures must be regularly tested and breach of security
obligations may result in fines of up to 10 million or 2% or annual global
turnover (whichever is higher).

With mandatory breach reporting legislation looming across the world (In
Australia, draft legislation is currently before Parliament, with final
drafts expected later this year), institutions will be expected to have
oversight over activity on their networks. They must be in a position to
quickly identify rogue devices or weak links, and to mitigate the damage
that may be caused by those vulnerabilities.

For UK and European Institutions, the GDPR will introduce a number of
wide-ranging changes to EU data protection law, including by introducing
72-hour data breach notifications. Pursuant to the new rules, a data
controller must notify the relevant supervisory authority of a personal
data security breach within 72 hours of becoming aware of the breach. They
may also be required to inform the affected individuals where there is a
high risk to their personal data.

*What to keep in mind when considering cyberrisk management*

There is no `one size fits all' approach to managing cyberrisk. But in
managing the risk that devices pose to a network, educational institutions
should focus on the following key issues:

   - In each situation, independent critical thinking is needed to ensure
   that the institution's cyber security strategy is tailored to the risks
   faced by the institution, including its legal obligations, its critical
   assets, and the third-party vendors that are relied upon;
   - Strategies must go beyond a simple `check box' exercise to a living
   and breathing strategy that covers the necessary technical aspects as well
   as providing for ongoing education;
   - Cyber-risk should be managed on an organisational level with input
   from all level of stakeholders and staff with ultimate supervision by the
   board and senior management;
   - Disaster planning systems and intrusion detection systems should be in
   place and should be actively and continually monitored; and
   - Consideration should be given to risk mitigants such as specialist
   cyber insurance - to help mitigate the financial, legal and reputational
   risks of cyber incidents.

Each of these issues is considered in detail below.

*Identification of assets at risk*

As with all exercises in risk management, management must identify what
critical assets and data are at risk to ensure that there are no blind
spots in the organisation's security strategy. It is important to remember
that the assets at risk include not only obvious IT assets such as servers
but also assets that are controlled by networked computers. For educational
institutions, personal information, health and credit information pose a
particularly high level of risk. Sensitive examination related information
and student assessment records should also be identified as needing added
protection. Organisations should also ensure that all legal and compliance
obligations are identified and are considered in planning the security
strategy.

*Third-party vendors - management and due diligence*

In a number of recent high profile cyber attacks on educational
institutions, attackers exploited weaknesses in the systems of third-party
vendors used by the institutions to gain access to the institutions
network. There are likely to be more such incidents as third-party vendors
with inadequate defences will often be an attacker's path of least
resistance.

Regulators across the world have expressed concerns about organisations
relying on third-party vendors without performing proper due diligence when
selecting the vendor or conducting due diligence on an ongoing basis once
the vendor has been engaged. An organisation's cyber-risk management
policies should address due diligence, the extent to which third parties
are given access to critical data, and response strategies in the event of
a third-party incident. Vendor contracts should also include clauses to
effectively manage risks and specify the procedures to be adopted where an
incident occurs. A third-party vendor must assist the institution to meet
its requirements when dealing with affected customers, law enforcement, and
insurers under writing cyber-risk.

Due diligence is also necessary when companies consider outsourcing IT
functions or adopting cloud based payroll, data and management services.

*Education and training*

Educating students and staff as to best practice in cyber security is
crucial to managing the risk. Institutions should ensure that students and
staff are properly informed of their responsibilities regarding the use of
IT assets and data security. Training and policies need to encourage
students to be aware of and engage in cyber-risk management. Steps should
include educating students about cyber risks, best password practices,
handling of confidential information, how to recognise risks, when to
inform teachers and supervisors of concerns and how to recognise scams and
phishing. When staff and students are properly trained, they can become the
organisation's best defence to cyber incidents.

*Board and management engagement*

Effective cyber-risk mitigation requires communication and cooperation
between teachers or lecturers and senior management, including the boards
of directors, executive council or board of management. Regulators are
increasingly
demanding that board minutes and briefing materials demonstrate
consideration of cyber security, incident response planning, reporting on
actual incidents, and any risks arising from vendors.

*Breach and system monitoring*

Many cyber incidents have also been attributed to failures by organisations
to maintain internal controls such as regularly updated virus software and
patches. Patch management practices should provide for the prompt
installation of critical patches and the documentation of such actions.
BYOD policies should be front and centre, and should require regular
patching and updates from all users.

Intrusion detection software should also be considered, as it provides
timely detection and reporting of security incidents. The earlier security
incidents are identified, the earlier they can be addressed and any loss or
damage minimised. This is difficult, however, for institutions with a BYOD
policy. For this reason, it may be prudent to engage external firms to
monitor internet hotspots for any trace of irregular activity or increased
flow of personal information.

*Disaster planning and revisiting*

Traditional disaster recovery and business continuity plans should be
flexible enough to address cyber risks as well as the traditional physical
risks institutions face. Plans should facilitate communication between the
information security team, risk team and legal team responsible for
emergency response, disaster recovery and contingency planning. They should
clearly set out the roles and responsibilities of each member of these
teams. Tests should be carried out regularly, to ensure systems are
adequately responding to different scenarios.

*Insurance*

Insurance also provides an important risk management tool for organisations
to recover loss and damage that may be caused by a cyber incident.
Generally these policies provide coverage for both first party loss (i.e.
the damage that is caused directly to the organisation by a cyber incident)
and third party loss (i.e. the damage and loss an organisation may incur
due to liability it owes to its stakeholders, third parties and regulators).

*Summary*

In conclusion, it is important to remember that institutions of all sizes
are experiencing cyber related breaches and attacks, and schools and
universities are not immune. Due to the increasing number of cyber
incidents, government bodies are demanding that organisations prioritise
cyber resilience to protect their systems and stakeholders. While there are
no easy answers, educational institutions should consider and follow the
guidelines discussed above as a starting point from which to manage their
exposure and respond to rapid change.
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