Principles of Information Security, 2nd Edition 2

Introduction

Risk management: process of identifying and controlling risks facing an organization

Risk identification: process of examining an organization’s current information technology security situation

Risk control: applying controls to reduce risks to an organizations data and information systems

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An Overview of Risk Management

Know yourself: identify, examine, and understand the information and systems currently in place

Know the enemy: identify, examine, and understand threats facing the organization

Responsibility of each community of interest within an organization to manage risks that are encountered

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Risk Identification

Assets are targets of various threats and threat agents

Risk management involves identifying organization’s assets and identifying threats/vulnerabilities

Risk identification begins with identifying organization’s assets and assessing their value

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Asset Identification and Valuation

Iterative process; begins with identification of assets, including all elements of an organization’s system (people, procedures, data and information, software, hardware, networking)

Assets are then classified and categorized

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Table 4-1 - Categorizing Components

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Information Asset Classification

Many organizations have data classification schemes (e.g., confidential, internal, public data)

Classification of components must be specific to allow determination of priority levels

Categories must be comprehensive and mutually exclusive

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Information Asset Valuation

Questions help develop criteria for asset valuation: which information asset

is most critical to organization’s success?

generates the most revenue/profitability?

would be most expensive to replace or protect?

would be the most embarrassing or cause greatest liability if revealed?

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Figure 4-3 – Example Worksheet

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Listing Assets in Order of Importance

Create weighting for each category based on the answers to questions

Calculate relative importance of each asset using weighted factor analysis

List the assets in order of importance using a weighted factor analysis worksheet

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Table 4-2 – Example Weighted Factor Analysis

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Management of Classified Data

Storage, distribution, portability, and destruction of classified data

Information not unclassified or public must be clearly marked as such

Clean desk policy requires all information be stored in appropriate storage container daily; unneeded copies of classified information are destroyed

Dumpster diving can compromise information security

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Threat Identification

Realistic threats need investigation; unimportant threats are set aside

Threat assessment:

Which threats present danger to assets?

Which threats represent the most danger to information?

How much would it cost to recover from attack?

Which threat requires greatest expenditure to prevent?

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Vulnerability Identification

Specific avenues threat agents can exploit to attack an information asset are called vulnerabilities

Examine how each threat could be perpetrated and list organization’s assets and vulnerabilities

Process works best when people with diverse backgrounds within organization work iteratively in a series of brainstorming sessions

At end of risk identification process, list of assets and their vulnerabilities is achieved

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Risk Assessment

Risk assessment evaluates the relative risk for each vulnerability

Assigns a risk rating or score to each information asset

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Valuation of Information Assets

Assign weighted scores for value of each asset; actual number used can vary with needs of organization

To be effective, assign values by asking questions: Which threats present danger to assets?

Which threats represent the most danger to information?

How much would it cost to recover from attack?

Which threat requires greatest expenditure to prevent?

Finally: which of the above questions for each asset is most important to protection of organization’s information?

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Risk Determination

For the purpose of relative risk assessment, risk equals:

Likelihood of vulnerability occurrence TIMES value (or impact)

MINUS percentage risk already controlled

PLUS an element of uncertainty

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Identify Possible Controls

For each threat and associated vulnerabilities that have residual risk, create preliminary list of control ideas

Residual risk is risk that remains to information asset even after existing control has been applied

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Types of Access Controls

Mandatory access controls (MAC): give users and data owners limited control over access to information

Nondiscretionary controls: managed by a central authority in organization; can be based on individual’s role (role-based controls) or a specified set of assigned tasks (task-based controls)

Discretionary access controls (DAC): implemented at discretion or option of data user

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Documenting the Results of Risk Assessment

Final summary comprised in ranked vulnerability risk worksheet

Worksheet details asset, asset impact, vulnerability, vulnerability likelihood, and risk-rating factor

Ranked vulnerability risk worksheet is initial working document for next step in risk management process: assessing and controlling risk

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Risk Control Strategies

Once ranked vulnerability risk worksheet complete, must choose one of four strategies to control each risk:

Apply safeguards (avoidance)

Transfer the risk (transference)

Reduce impact (mitigation)

Understand consequences and accept risk (acceptance)

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Mitigation

Attempts to reduce impact of vulnerability exploitation through planning and preparation

Approach includes three types of plans:

Incident response plan (IRP)

Disaster recovery plan (DRP)

Business continuity plan (BCP)

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Selecting a Risk Control Strategy

Level of threat and value of asset play major role in selection of strategy

Rules of thumb on strategy selection can be applied:

When a vulnerability exists

When a vulnerability can be exploited

When attacker’s cost is less than potential gain

When potential loss is substantial

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Figure 4- 8- Risk Handling Decision Points

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Categories of Controls

Controlling risk through avoidance, mitigation or transference accomplished by implementing controls

Effective approach is to select controls by category:

Control function

Architectural layer

Strategy layer

Information security principle

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Characteristics of Secure Information

Controls can be classified according to the characteristics of secure information they are intended to assure

These characteristics include: confidentiality; integrity; availability; authentication; authorization; accountability; privacy

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Feasibility Studies

Before deciding on strategy, all information about economic/non-economic consequences of vulnerability of information asset must be explored

A number of ways exist to determine advantage of a specific control

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Cost Benefit Analysis (CBA)

Most common approach for information security controls is economic feasibility of implementation

CBA is begun by evaluating worth of assets to be protected and the loss in value if those assets are compromised

The formal process to document this is called cost benefit analysis or economic feasibility study

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Cost Benefit Analysis (CBA) (continued)

Once worth of various assets is estimated, potential loss from exploitation of vulnerability is examined

Process results in estimate of potential loss per risk

Expected loss per risk stated in the following equation:

Annualized loss expectancy (ALE) equals Single loss expectancy (SLE) TIMES

Annualized rate of occurrence (ARO)

SLE is equal to asset value times exposure factor (EF)

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The Cost Benefit Analysis (CBA) Formula

CBA determines whether or not control alternative being evaluated is worth cost incurred to control vulnerability

CBA most easily calculated using ALE from earlier assessments, before implementation of proposed control:

CBA = ALE(prior) – ALE(post) – ACS ALE(prior) is annualized loss expectancy of risk before

implementation of control ALE(post) is estimated ALE based on control being in

place for a period of time ACS is the annualized cost of the safeguard

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Benchmarking

An alternative approach to risk management

Benchmarking is process of seeking out and studying practices in other organizations that one’s own organization desires to duplicate

One of two measures typically used to compare practices:

Metrics-based measures

Process-based measures

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Problems with Applying Benchmarking and Best Practices

Organizations don’t talk to each other (biggest problem)

No two organizations are identical

Best practices are a moving target

Knowing what was going on in information security industry in recent years through benchmarking doesn’t necessarily prepare for what’s next

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Baselining

Analysis of measures against established standards

In information security, baselining is comparison of security activities and events against an organization’s future performance

Useful when baselining to have a guide to the overall process

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Other Feasibility Studies

Operational: examines how well proposed information security alternatives will contribute to organization’s efficiency, effectiveness, and overall operation

Technical: examines whether or not organization has or can acquire the technology necessary to implement and support the control alternatives

Political: defines what can/cannot occur based on consensus and relationships between communities of interest

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Risk Management Discussion Points

Organizations must define level of risk it can live with

Risk appetite: defines quantity and nature of risk that organizations are willing to accept as tradeoffs between perfect security and unlimited accessibility are weighed

Residual risk: risk that has not been completely removed, shifted, or planned for

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Recommended Practices in Controlling Risk

Convince budget authorities to spend up to value of asset to protect from identified threat

Final control choice may be balance of controls providing greatest value to as many asset-threat pairs as possible

Organizations looking to implement controls that don’t involve such complex, inexact and dynamic calculations

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Summary

Risk identification: formal process of examining and documenting risk present in information systems

Risk control: process of taking carefully reasoned steps to ensure the confidentiality, integrity, and availability of components in organization’s information system

Risk identification A risk management strategy enables identification,

classification, and prioritization of organization’s information assets

Residual risk: risk that remains to the information asset even after the existing control is applied

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Summary

Risk control: four strategies are used to control risks that result from vulnerabilities:

Apply safeguards (avoidance)

Transfer the risk (transference)

Reduce impact (mitigation)

Understand consequences and accept risk (acceptance)