UK: Leading Edge Companies Give The Thumbs Up To Computer Security

While Others Leave The Back Door Open To Hackers
Last Updated: 12 April 2000

Research by KPMG among large UK companies shows that both Dot.Com and traditional "clicks and mortar" companies are leaving themselves and their customers at risk from hacking and cyber crime.

The overwhelming conclusion of the survey is that the new eRisks are not being managed. The phenomenal growth in the use of the Internet has been accompanied by a step change in information risk, but security has not kept up.

98% of respondents said they currently use the Internet. This compares with 70% in the same survey in 1998 and 35% in 1996. However only one-third were sufficiently advanced to be able to undertake business transactions on line. Yet one in six of these still do not have a formal information security policy.

Almost a third of organisations have no Internet firewall to protect them - which for many leaves a back door to their system open to hackers, through a linked web site for example.

Almost two out of five organisations saying the Internet is critical to the operation of their businesses do not have a recovery plan should their Internet connections break down - many of these are Dot.Com companies.

Although almost half of those companies surveyed use what they consider to be advanced encryption techniques to protect their Internet information, this level of encryption can be easily broken.

Two out of five organisations without encryption allow any sort of information to be sent over the Internet.

Over a third do not have an automatic system to report hacking and other attacks coming through the Internet.

Over a quarter have never tested the security of their internet connections by, for example, "ethical hacking".

Security breaches such as virus attacks, theft of equipment and e-mail intrusion show massive growth over the last two years, but evidence shows that organisations are more willing to prosecute offenders.

The other side of the coin is that there are many organisations with no security reporting systems who are simply unaware they have been broken into and highly confidential information has been stolen; they are victims of traceless crime.

Password security is lax as old fashioned words and numbers systems strive to find a balance between effective security and user convenience. However there are the first signs that leading edge companies are using the 21st century password - biometrics, such as scanning thumbprints (representing 1% of the sample). 14% have little or no password security.

The survey also shows that security is not being taken seriously by senior management. Over a half have no formal board level policy - a clear breach of the Turnbull corporate governance rules on significant risk.

Where security is seen as an exclusively IT issue by general management, there is a danger that IT departments will protect the information they see as important and will be unaware of broader business requirements. They fail to understand the criticality and sensitivity of different types of information in use in the business. An example of this is e-mail which often carries the strategic thinking of the firm.

The survey shows that overall awareness of security issues has fallen over last the two years. Users who could be classed as "very aware" have fallen from 24% of respondents to 15%. This may reflect that people now realise how little they know, demonstrating a key need for education at all levels and formal industry qualifications for information security professionals.

However over the last two years all organisations are getting better at managing traditional IT security areas such as information security policy (especially implementation of British Standard Code of Practice for information security management) physical protection of IT equipment and disaster recovery planning.

Commenting on the survey, Robert Coles, Head of Information Security Services within KPMG's Information Risk Management team said:

"The significant change from our last survey has been the rise of e-commerce. e-Business offers tremendous potential and great risks at the same time; there are more situations where information and information systems - the corporate crown jewels - are exposed to theft and attack from anywhere in the world.

The risk profile of e-businesses is considerably different from traditional businesses. The recent spectacular security failures involving high profile organisations have been due to simple errors, hacking and denial of service attacks. These have resulted in reputational damage, theft of assets and loss of customers. Senior management has to take information security more seriously now than ever before".

For further information please contact your usual KPMG contact.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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