In the span of a week, we’ve see data breaches affecting 600 million people. For perspective, that’s more than every man, woman and child in the US, Russia, Canada, Britain and Australia combined. And the damage may not be done, as scammers and other bad actors frequently take advantage of the widespread confusion that follows these sorts of incidents.
Moreover, as the investigations unfold, we will begin to see the breadth and depth of what went wrong, who did what, and what steps must be taken to prevent this from happening in the future.
The risk manager in me says this will happen again, just as it’s happened before. Data experts know all too well the challenges in implementing controls proportional risk, and counter-balancing every data initiative with the right set of controls — starting with asking whether the proposed data collection or use benefits are worth the downside risk.
So what does this mean to a Chief Data Officer? In a word, everything. Why? Because data is at the center of every breach, and the CDO should be looking at the full picture around both data use and data risk. The emerging role of the CDO in business positions them as a key executive in helping to reduce the risk of breach as well as to navigate the aftermath, protecting the organization’s brand.
Before a Data Incident
In the normal course of business, the CDO should be executing against the company’s data strategy and vision, and maintaining an inventory of critical data assets. The inventory should include key meta-data — ownership, obligations, location, permissions, value, uses, etc — which forms an important part of a periodic risk analysis.
The risk analysis considers threats, vulnerabilities, obligations and relative value of the data to conclude on appropriate protections. The more progressive CDO’s will construct a holistic threat analysis that answers the question, “what could go wrong?” or “how might information be breached?” taking into account behavior of personnel, company culture, key business activities and positioning of the company in the marketplace. Typically, such an analysis covers the spectrum from the seemingly mundane (accidents caused by carelessness or poor judgment), all the way to industrial espionage targeting company data, with a total of 5 or 6 categories in between. This analysis serves as a sounding board to validate the range of control activities, which includes everything from policy, to business practices, to training, to technical controls, and some instances where certain risks have to be accepted, insured against, or perhaps transferred elsewhere.
The CDO should provide business requirements to the CIO and CISO for appropriate technical measures to provide protections, which – depending on the sophistication of the company – could range from providing data classifications, to which the CISO or CIO react, all the way to explicit requirements for, say, encryption and access control.
The inventory shines a light on whether all data on hand is truly necessary, or whether some can be disposed of. Moreover, the CDO’s analysis of business processes using data can also question whether all data being collected is necessary.
The Board of Directors, senior executive leadership and internal audit should – to appropriate degrees – be aware of how the company is using data as well as the CDO’s assessment of risk and mitigating controls. This will allow them to understand the risk/benefit around data use, and weigh in whether the business opportunities related to data use are sufficiently compelling.
The CDO maintains relationships with counsel to understand the legal aspect of obligations, and obtain sign-off on the sufficiency of the compliance programs. The CDO should understand their regulators’ expectations and requirements around handling data, making sure their protection controls meet regulator expectations. These steps are key, because most breaches — especially where regulated data is involved — will result in legal or regulatory exposure, and having transparency with counsel and regulators with streamline investigations.
The CDO should own (or be a key stakeholder in) the data incident management process. This is the process whereby data incidents — data loss, possible breaches or exposures — are logged, analyzed and investigated.
During a Data Incident
Sometimes, a target organization is aware of a data incident as it’s occurring. Many companies have processes to respond in this event, which may focus on containment, interruption, or other priorities (allowing an attack to proceed in a controlled way may help law enforcement with their investigation).
The CDO should be available to help answer questions about the nature and location of data that may be accessed, as well as to begin preparing post-incident planning. Some data owners (e.g., Federal Government) have explicitly defined time frames to report data incidents, the CDO can get ahead of these requirements.
Following a Data Incident
Companies should have a crisis management plan that includes defined procedures to be followed in the event of a cyber attack, data breach or exposure. The details of these plans are tailored to each company, and generally emphasize damage control and protecting the brand — which in itself may follow one or more tracks, based on the nature of the incident.
Stakeholders include senior leadership, legal counsel (sometimes supported by outside counsel), the head of security, the CIO and CISO, and often on-call cyber security consultants. The overall objective is to understand what happened, how it happened, who perpetrated the event, what data was affected, overall impact, and how to repair the damage and prevent the same thing from happening again.
Along these lines, the CDO should help assess the impact of the loss, in terms to cost to the company — defined as asset value, or competitive impact, or brand damage to the organization. The CDO can be a resource to analyze the nature of the data to determine whether external notifications are required, and – in conjunction with counsel – whether there is a regulatory impact. Who owned the data? Do regulators, customers, vendors, partners or clients need to be notified? Is there a timeframe requirement for notification and is there a specific process to be followed? Do affected parties need to be offered – or are they likely to demand – compensation?
The CDO can help analyze what went wrong, by having an understanding of the processes and policy around data use. Was there misuse of data or was it stored, processed or transmitted in ways it shouldn’t be? Was there a control failure, or absence of control?
This analysis concludes with a reassessment and remediation of processes and controls.
Most corporate leaders recognize the near-inevitability of a breach or hack. This is due to a variety of factors, including the increased complexity of information systems, coupled with the expansion of data-rich cognitive and robotics initiatives, many of which rely heavily on data. Data sets themselves are growing at a dramatic pace.
Companies are appointing CDO’s to try and coordinate the activities around the leverage of data, and increasingly, they are assigned responsibility for assessing and managing risk around data. This is not a bad thing at all, since it helps keep risk management activities proportional to risk and the nature of the data.
CDO’s should approach the challenge with a plan, emphasizing transparency and engaging appropriate stakeholders. Whereas today, Boards often look to the CIO and CISO to understand how data handled and protected, going forward they will increasingly look to the CDO.