Ecommerce: Security and Control

1. Ecommerce: Security and Control James Vickers, Boston College http://www.jamesvickers.com/ jamie@boston.ac.uk

2. Overview • Why are modern day information systems so vulnerable to destruction, error, abuse, and system quality problems? • What types of controls are available for ecommerce systems? • What special measures must be taken to ensure the reliability, availability and security of electronic commerce and digital business processes? • Why are auditing ecommerce systems and safeguarding data quality so important?

3. The business predicament • Do we design systems that over-controlled, and therefore not functional, or unrestricted and under-controlled? • How do we applying quality assurance standards in large ecommerce systems projects

4. The business predicament • The major concerns for businesses • Disaster • The possible destruction of computer hardware, programs, data files, and other equipment • Security • Preventing unauthorized access, alteration, theft, or physical damage to equipment • Errors • Computer actions that may disrupt or destroy organization’s record-keeping and operations • Bugs • Program code defects or errors • Maintenance Nightmare • Maintenance costs high due to organizational change, software complexity, and faulty system analysis and design

5. The general processing model Unfortunately, all of these stages can contain elements of failure, unless a strategy is implemented, and software quality assurance standards are implemented Figure 1

6. The cost of poor design Figure 2

7. The business predicament • Control • What is needed? • Methods, policies, and procedures • Why is it needed? • Ecommerce systems may provide (limited) access to a business central infrastructure • Ensures protection of organization’s assets • Ensures accuracy and reliability of records, and operational adherence to management standards • When should this occur? • From the ideas inception, to the completion of the ecommerce system

8. Controlling our ecommerce plan • At a business level: • Market research into user needs, and identified areas for business expansion • A business and financial plan for forecasting frequency of use, and suspected revenue turnover • A strategy on how to implement this plan, alongside our current business plan (if we are expanding a “brick and mortar” business that is). • A review of our internal technical skills – are our staff competent enough to implement this, or should we outsource.

9. Controlling our ecommerce plan • General controls • Establish framework for controlling design, security, and use of computer programs • Include software, hardware, computer operations, data security, implementation, and administrative controls. These may include: • Personnel controls: Ensuring that only authorised personal undertake elements of the project • Customer controls: Ensuring that protection is provided from the global customer layer of the ecommerce system, to the business infrastructure layer of business operations

10. Controlling our ecommerce plan • Protecting our company • On-line transaction processing: Transactions entered online are immediately processed by computer, and recorded for audit • Fault-tolerant computer systems: Contain extra hardware, software, and power supply components in case of element failure • High-availability computing: Tools and technologies enabling system to recover from a crash, or power cut • Disaster recovery plan: Plan of action in case of ecommerce system failure. Ask yourself the question, if we trade online and the “shop front” is gone, how do we trade? • Load balancing: Heavy traffic will need distribution over a large servers

11. Controlling our ecommerce plan • Protecting our company • Mirroring: Duplicating all processes and transactions of ecommerce on backup server to prevent any interruption • Clustering: Linking two computers together so that a second computer can act as a backup to the primary computer or speed up processing • Firewalls: For prevent unauthorised users from accessing a private internal network, or accessing private data. Don’t forget this covered under the data protection act. • Intrusion Detection Systems or Personnel to monitor vulnerable points in the network to detect or deter unauthorized intruders

12. Controlling our ecommerce plan • How many of you have assumed that security of ecommerce systems is an Internet threat only? • I would bet the majority of you….. • Now we need to forget that we have planned for ecommerce systems, and consider in depth our security issues • We shall look at security in terms of the whole networked community, not just ecommerce. • Why? Because security is more often than not overlooked at a local level, never mind at a global level! • Security is a major concern, not just at a global interface level, but at an internal business level too…

13. Security This raises big questions….. What is security? What constitutes security? What examples can we provide of security?

14. Security needs • Who says we need security?: • Data Protection Acts 1984 & 98 • Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000 • Allows employers to monitor or record communications without consent • to establish the existence of facts relevant to the business • to ascertain compliance with regulations • to ascertain standards which ought to be achieved by staff • to detect unauthorised use

15. Reformed: Two major reforms over last several decades Computer Security Network Security Widespread use of data processing Security previously handled by: Physical means: Filing cabinet and lock Administrative means: Personnel Computers Introduction meant that new regulations had to be imposed by organisations to secure data Shared systems, were worse because of sending / retrieving data of numerous systems Information Security

16. Information Security • Routing Services • Security Office • Server Protection

17. Computer Security: Evolved with the need to protect data Needed to prevent hackers Needed to abide by data protection act Network Security: Heightened by the need for distributed systems Heightened by the need for secure networks and communications Need to protect data during transmission Ensure data is authentic Why the reforms?

18. Local Information Security • Various methods available: • DVD-RAM Drive • SAN’s • RAID Arrays • Most efficient (and common) method: • DAT / DLT • Data security is big business! • Storage “off-site” • Storage in safes • Fireproof! • Bombproof!

19. Classified in three ways: Confidentiality: Authorised parties can read the data Disclosure of data to relevant source Integrity: Authorised parties can modify the data Changes status of the data by relevant source Availability: Authorised parties can access the data Security Requirements

20. What next? • We have planned…. • We have designed…. • We have restricted access…. • We have investigated our needs…. • We then sit back and wait while our systems are attacked….

21. Passive: “Eavesdropping” “Release of message contents”: Extracting information from mail messages, telephone conversations etc “Traffic Analysis”: Analysis of message lengths, Tx & Rx, to guess the types of information being Tx & Rx. Network Attacks!

22. Network Attacks • Active Attacks: • “Masquerade”: • One node pretends to be another node. • Tx is fooled into thinking that Rx has received message. • “Replay”: • Captures data and then retransmits to fool Tx into thinking the message was unauthorised • “Modification of Message”: • The Tx message is intercepted, and modified to the intruders benefit – e.g. Funds Balances etc. • Message is forwarded to intended Rx • “Denial of Service” • Inhibits or hinders data communications traffic, but targeting the management and communications facilities

23. Passive: Sniffers / Probes Difficult to detect Do not alter data Can prevent these attacks Prevention, rather than detection Active: Opposite to passive Difficult to prevent (Could be done by physical protection) Detect, and recover Detection can also be a prevention, as intruder is often found Network Attacks

24. Network Attacks Passive Threats Active Threats Release of message content Traffic analysis Masquerade Replay Denial of service Modification of message contents

25. Automation Automation of Tx and Rx is done through encryption This ensures authenticated and unique data Provides a security layer to the network Encryption: We shall look at encryption in two ways: Symmetric Encryption Public-key Encryption (Asymmetric) Well known examples THWATE Comodo Both versions of Verisign SSL. Global Electronic Security-Encryption

26. Encryption • Symmetric (Single Key): • Pre-1970’s public key encryption standard • Stallings (2000) says that the idea has been used by such adversaries as Julius Caesar and the German U-Boot commanders • Requirements for symmetric encryption: • Strong algorithm to protect the key • Even if intruder access message, key should be protected • Tx & Rx must obtain the secret key in a secret fashion

27. Encryption • Symmetric (Single Key): • Encryption is made up of 5 major areas: • Plaintext: Original method before encryption • Encryption algorithm: Transforms plain text • Secret Key: Provides extra substitutions and transformations to the Encryption Algorithm • Ciphertext: The new message that is created to be sent • Decryption algorithm: The encryption & secret key in reverse algorithm

28. Encryption • Symmetric: Secret Key Secret Key Ciphertext Plain Text Plain Text Decryption Algorithm Encryption Algorithm Adapted from Stallings (2000), Figure 18.2, page 653

29. Encryption • Symmetric – Breaking the code: • Cryptanalysis: • Utilise analysis of the ciphertext to attempt to produce a secret key. • Sometimes pairs two ciphertexts to attempt to deduce a common encoding • If key is found, all future messages using that key are compromised • Brute-force: • Attempts to try every combination of secret keys on the ciphertext to deduce the plain text.

30. Encryption • Stallings (2000) quotes the times for breaking a secret key as follows:

31. Encryption • Public Key: • Biggest advancement in encryption in years – because it use Mathematics to calculate the key. • Public key cryptography uses two keys, rather than one – hence, sometimes referred to asymmetric. • Symmetric encryption is still in use, and will continue to be • This is because of the computational overhead associated with public key encryption

32. Encryption • Asymmetric (Public Key): • Encryption is made up of 5(6) major areas: • Plaintext: Original method before encryption • Encryption algorithm: Transforms plain text • Public and Private Key: Pair of keys that have been selected for encryption. One is used as encryption, one as decryption. • Ciphertext: The two new messages that are created to be sent, one by the public key, and one by the private key • Decryption algorithm: The encryption & secret key in reverse algorithm

33. Encryption • In English: • Each user generates a pair of keys for encryption and decryption. • Each user places the public key in an accessible file. The companion private key is kept private. • If A wishes to send a message to B, A encrypts the message using B’s public key. • When B receives the message, B decrypts the message using it’s own private key. No one else can, because no-one else uses B’s private key

34. Digital Signatures • Confirming the source: • Used extensively now due to the Internet • When a digital signature is sent to the receiver, the message is encoded using the senders private key • At the receiving end, the message should be able to be decoded using the senders public key. • If it can be decoded, it can be assumed that the sender must have made the message and it’s okay • If it can’t be decoded, it can be assumed that the sender couldn’t have made the message, and should be disposed of.

35. Protecting yourself • Ports • Open ports allow access to a variety of problems • Port Scanner • Nanoprobe • Finding an open port tells you what services are available! • Close down as many as necessary to make the system secure.

36. Firewalls • Firewalls: • Firewalls are used to limit or allow connections through a network • Firewalls are gateways that provide this • They can limit or allow connections based on: • IP Address • Port Number • If you like firewalls are watchdogs for your computer’s open doors.

37. Firewall Sample:

38. Firewall Sample:

39. Security Challenges Figure 3

40. Overview of Electronic Security Methods • Encryption: Encoding and scrambling of messages to prevent their access without specific authorization. Most commonly used when transferring sensitive data electronically across (e.g.) the Internet • Authentication: Providing secure mechanisms for accessing specific elements of the ecommerce system. Most common method is registration with the ecommerce system, and using usernames and passwords. • Digital signature: Digital code attached to electronically transmitted message to uniquely identify contents and sender. Implemented when receiver needs to be assured of author of message (adopted now in hardware and operating system drivers) • Digital certificate: Attachment to electronic message to verify the sender and to provide receiver with means to encode reply • Secure Electronic Transaction (SET): Standard for securing credit card transactions over Internet and other networks

41. References • Figures 1,2, 3 taken from Laudon.K., Laudon.P. 2002. Essentials of Management Information Systems. New Jersey: Prentice Hall. • Stallings. W. 2000. Data and Computer Communications. New Jersey: Prentice Hall