Calum Macleod,European director of specialist firm Cyber-Ark, assesses the growing threat of data security breaches...

So 2005 has gone down as the worst year for data security breaches.

I suppose the good news is that we seemed to be less troubled by viruses, so either the virus developers have got bored, or our anti-virus technology has got better, or maybe we're simply not aware of them.

The question is whether 2005 has been particularly bad for data breaches, or is it the case that more organisations own up to indiscretions?

After all, the consequences of being found out are now a lot more serious than admitting to a problem.

It seems like almost every month last year, some organisation or other was admitting to backup tapes being misplaced.

In the UK, the Inland Revenue lost a computer disc, sent by the bank, which contained address and account details of the banks investors, and apparently they are still looking for the disc.

In Japan, millions of credit card details were stolen. In fact, the stories go on and on.

The potential seriousness for your business was quantified by the department of Trade and Industry, which said that 70 per cent of organisations that experience serious data loss go out of business within 18 months.

An organisation should never underestimate the potential damage in case of exposure or loss of confidential data.

This is the reason why most businesses takes great care to ensure that the physical media is protected in physical safes.

In some cases these physical security measures are even enforced by formal regulations.

Securing data while it travels between applications, business partners, suppliers, customers, and other members of an extended enterprise is crucial.

As enterprise networks continue to become increasingly accessible, so do the risks that information will be intercepted or altered in transmission.

For example, how many chief executives are aware that sensitive data within the organisation is visible to everyone from database administrators, developers, and system administrators?

How many bank directors are aware that in many cases financial transaction files are sitting in clear text on application servers?

And not only are they not aware, they don't always understand the technical issues involved.

Think about the company which is contracted to carry out research and development for many business partners - do management understand how confidential R&D data is shared with business partners?

Or how about the financial company that processes payments for non face-to-face businesses including internet, mail and telephone - does management know how payment files are delivered to and from merchants?

Regulation means that companies have never been as vulnerable to the consequences of data breaches as they are today.

The potential damages resulting from loss of reputation, business, and legal costs can be crippling to many businesses.

So what should you be doing? There are a number of steps to consider.

And an excellent guideline to follow is the standard developed by MasterCard and VISA which is designed to protect cardholder information and must be implemented by members, merchants and service providers.

So if you fall into any of these categories then this is important.

* Build and maintain a secure network. Maybe an obvious comment, but it is important to understand what this means.

You need to have a firewall configuration to protect data and not use vendor-supplied defaults for system passwords and other security parameters.

In order for firewalls to be effective, all communication from untrusted networks or hosts must be blocked, preventing external sources from interfacing with internal ones.

* Protect data. In order to achieve this goal, it is necessary to ensure that data is protected when it is stored - and wherever it is stored, and that the data is encrypted when being transmitted across public networks. Although most will probably employ some type of VPN technology for transmission, the secure storage is often overlooked.

An effective solution will provide a comprehensive environment to securely store sensitive data, featuring strong firewall, strong authentication, session encryption, storage encryption, extensive auditing, access control, dual control and other security measures to ensure the security and confidentiality of data.

* Maintain a vulnerability management program. This is primarily to ensure that you use and regularly update anti-virus software and secondly, that you develop and maintain secure systems and applications. All applications, as well as the network itself, should be protected by an anti-virus solution.

* Implement strong access control measures. This can present a challenge since it does not simply define Identity Management measures but also the need to ensure that data is only accessible on a "need to know" basis.

Ensuring that users have access only to the level of data that they need is an important step in preventing data theft, particularly internal data theft.

* Regularly monitor and test networks. This section requires that you track and monitor all access to network resources and data and regularly test security systems and processes.

One of the best ways to do this is to have an automated audit trail to assess who had access to data if a security breach was to occur.

* Maintain an information security policy. The responsibility for this falls squarely on your IT department and management team to create, define and enforce an information security policy throughout the organisation.

The policy should address all relevant rules and regulations defined by regulatory bodies who may have an interest in your activities, and your users should be fully aware of the obligations as well as penalties for non-compliance.

In today's increasingly regulated business environment it's only a matter of time until the phone call comes from someone inviting themselves for a visit.

And hopefully you have all your information readily at hand.

After all, no one doubts that you're an honest businessman, but can you prove it?

So make the resolution not to be the data breach story of 2006. ..SUPL: