Security Lessons From Higher Education

Guest Columnist David Taylor is the Founder of the PCI Knowledge Base, Research Director of the PCI Alliance and a former E-Commerce and Security analyst with Gartner.

What would you do if one of your employees decided to leverage your brand and set up a little side business inside your store, including selling products via an E-Commerce Web site, setting up a merchant bank account and taking credit cards? You'd probably fire the person, right? But, what if you couldn't? And what if groups of employees started their own businesses, leveraging your brand, on your property, but forgot to tell you about it? Chaos would ensue, right?

Well, that is what it's like for Treasury organizations at major academic institutions, where security and finance professions are faced with managing small "cities" with hundreds of "independently minded" individuals and groups who often see no need to inform "corporate" of their desire to start up a business. There are several critical lessons that can be learned from the experience of securing E-Commerce in higher education.

Treat PCI as more of a business issue. When it comes to PCI, one of the biggest differences between retailers and universities is that large retailers tend to be Level 1 or 2 merchants, in terms of transaction volume, whereas universities are treated as a collection of 100 to 200 Level 4 merchants, which means they don't need PCI assessors. This provides greater flexibility in managing compliance, but it also requires strong centralized enforcement by those charged with PCI management. Another key difference is that PCI is more likely to be managed by Treasury or another business function that works with IT, rather than by IT itself. This is because the primary task is working to get the many merchants into compliance, so IT plays a secondary role. Increasing the "non-IT" involvement in PCI is an important lesson from academia.

Give business units more security "autonomy" rather than relying on network segmentation. Many retailers have found that it is not always possible to fully segment their backbone networks without impacting application and network performance. One of the best practices from academia is that it's often necessary to create autonomous merchant IT environments and to separate each of these from the overall network, using internal firewalls, but not to otherwise segment the enterprise network. For universities, this is to maximize academic freedom. For retailers, the justification would be performance improvement. This will likely require more data management and procedural changes within the business units. It's essentially a method of shifting risk management from the network and corporate IT to the application managers and business units, and making individual units (e.g., Web commerce) more directly responsible for how they manage PCI compliance and the security of their data.

Look beyond PCI before locking down data. One thing that higher education has plenty of is social security numbers. For some institutions, SSNs are also used as student ID numbers, making the risk of not protecting this data fundamental to the integrity of the institution. For this reason, we have found that leading educational institutions are implementing projects to provide "PCI level" security to SSNs and other confidential data, even more so than some of the retailers we have interviewed. In some cases, there are parallel projects for protecting card data and SSNs, but the most cost-effective way to manage risk and overall data security is to apply the PCI controls to a "hit list" of your most confidential, high-risk data up front, before you start writing policies, segmenting your network, changing procedures or purging data.

Secure, or outsource, common payment services. Many universities offer payment gateway services to their on-campus merchants, because of the measure of control it provides and because they are often self-funding. But with PCI, the costs and risks of offering these gateways are being reevaluated. The cost of securing them in some cases can outweigh the cost of outsourcing payment processing entirely. Although payment outsourcing may be easier for a university, because it has less need to use customer data for target marketing purposes, some leading universities are increasingly concluding that outsourcing payment processing is the way to go, with PCI compliance being the primary driver of both the analysis and the decision.

Provide ongoing, online security training and documentation. Perhaps it is not surprising that academia should be better at training employees than retailers, because education is "their thing," so to speak. Leading universities have online documentation and ongoing training available, rather than the annual training conducted by many retailers. Not only are individual universities ahead of retailers when it comes to training and documentation, they are also better about sharing this information. Organizations such as the Treasury Institute for Higher Education and EDUCAUSE have developed excellent repositories of best practices that can be used by universities. For retailers, the National Retail Federation announced in January (2008) that it is developing a similar program for retailers and the PCI Knowledge Base is happy to help with that process.

Bottom line: The key lesson to be learned from the university environment when it comes to PCI is that working to give business units more autonomy and responsibility when it comes to security and PCI compliance can help drive the "operationalization" of compliance. As long as everyone in the company looks to security management and corporate IT to "solve" the PCI problem, compliance will continue to be a once-a-year "project" in the minds of business executives.

We have been conducting a series of interviews with IT security, treasury and compliance managers as part of our effort to develop a series of PCI Best Practices for Higher Education in the PCI Knowledge Base. From what we have learned so far, there are a number of best practices that can be adopted not only by other academics but also by retailers and other types of merchants.

If you have an opinion or question about this, send me an email at [email protected] or visit and click "Register" to join the PCI Knowledge Base.