Paper Compliance Vs. Operational Compliance

Guest Columnist David Taylor is president of the PCI Alliance and a former E-Commerce and Security analyst with Gartner.

One of the key conclusions to be found in the PCI Knowledge Base is that the rush to get compliant with PCI security standards over the past year has caused many retailers to focus on "paper compliance" – making sure their Report on Compliance (ROC) was filed by the deadline to avoid fines.

But based on more than 70 interviews conducted with retailers, PCI assessors, acquiring banks, processors and technologists, there is a big difference between paper compliance and "operational compliance" – which involves actually incorporating the protection of credit card and other confidential data into the way the retailer operates.

A major complaint from some of the assessors we have interviewed is that they have found themselves under severe pressure from retail executives, who have argued, coerced, manipulated and otherwise tried to use their power to get the PCI assessors to resolve various interpretations of PCI standards in their favor. Retailers, for their part, complain that many assessors only know the "letter of the law" of PCI, and make no effort to judge compliance based on the realistic risk to the confidential data. What both the retailers and assessors agree upon is that PCI is generally being treated as an IT project, managed out of IT, and not the enterprise-wide program that it needs to be.

Some of the key differences between paper compliance and operational compliance have do to with the management of all the data generated by security tools such as firewalls, intrusion detection, access controls, and file integrity monitors. More than 90 percent of the merchants and assessors we've spoken to report that most of this detailed, arcane data must be reviewed manually, with security professions having to comb through dozens, even hundreds of log files looking for (often hard to describe) evidence that a security breach is in progress or is imminent. Unfortunately, most of the PCI funds was spent on the tools, with not much left for building or training security staff to properly review this information.

This tremendous and very annoying manual effort is making some IT security people quite upset about the process. On the bright side, there are some real Best Practices to be found on this topic in the PCI Knowledge Base. For example, one Level 1 retailer has developed a partnership with Internal Audit and has supplemented their expertise with a staff person from network operations and a database administrator.

Collectively, this group owns the task of "operationalizing" PCI compliance. Another example is a Level 2 travel industry company that has identified five specific types of "compliance automation" which they will roll out during 2008 and 2008. Their top priorities are SIEM (security information and event management), identity management, and password management. They arrived at their priorities by estimating the amount of manual effort that was being expended, and developed an ROI analysis for each of their compliance automation programs.

If you want to discuss "compliance automation" or the differences between paper compliance and operational compliance, send me an E-mail at [email protected].