This week, Visa painted a very rosy picture of PCI compliance among merchants when they announced that 77 percent of Level 1 US merchants are compliant and 62 percent of Level 2 merchants are now compliant. While I applaud Visa for having the courage and spending the money for incentives to encourage compliance, the process of achieving PCI compliance has, for some merchants, resulted in a shift away from a strategic approach to security toward what can only be called a "checklist mentality."
As part of a research program recently launched by the PCI Alliance, we've talked to quite a few merchants who feel that the drive to PCI compliance has caused them to make some security technology choices that are contrary to their system architectures and prior planning. Others have expressed concerns that they are simply not able to process all the data they are collecting from their various auditing and logging tools, which means they are getting little value from the many thousands of dollars they have spent, other than the "PCI Compliant" seal of approval.
The bright side is that for merchants that had done little in the way of data security or were still retaining track data or CVV data, PCI compliance demands "woke them up" to the importance of removing this data from their systems, which greatly reduces the card fraud risk.
But this still leaves the bigger question: What is the relationship between compliance and security? Our research, so far, leads us to the conclusion that because PCI DSS is so very detailed as to required technologies, unlike SOX or HIPAA, that it becomes very easy for upper management, who rightfully know little about data security, to make the assumption that after they've spent $100K - $500K (or whatever) on security, that they should be "done with all that nonsense." So, when the CISO or CIO goes back in and says "Sorry, but that money was just for protecting credit and debit cards, we also have to protect all our other confidential data," they won't be too surprised when the CEO starts yelling at them.
So, Visa's very happy, but where does all this spending on compliance leave merchants? Many are re-thinking the headlong rush to find and protect card data, as opposed to all confidential data. Others are wondering whether all the rushing around, all the compensating controls, and all the pretending to be nice to the assessors was really worth it, in terms of actually securing their environment, and giving the tools they really need to continuously monitor both internal and external threats to their data.
In short, though a majority of merchants may be PCI compliant, they are still "whistling past the graveyard" with their fingers crossed – which is a pretty effective security strategy.
P.S. We are working with IT research firm TheInfoPro to develop a PCI Knowledge Base, where merchants can learn about the PCI compliance experiences of others, as well as get advice from a panel of PCI experts. To help build this PCI Knowledge Base, we are conducting a series of anonymous interviews with merchants. You don't need to be fully compliant to participate. The interview, which I will personally conduct, is about the process of compliance. If you'd like to learn more, or like to sign up to be anonymously interviewed, please provide your contact information.