Month: November 2013

Personal Data Protection Act 2010 Enforced in Malaysia

Here we are finally. After months of speculations, the Malaysian Personal Data Protection Act (PDPA) came in force last week on November 15, 2013. To be honest, we weren’t really expecting this, since deadlines after deadlines have gone by. We have been doing our workshops since December last year, and only had a vague prediction that 2014 could be the year it is enforced after it missed the August deadline this year.

Well, surprise, we are now in a new era of data privacy and protection, and companies and individuals will be going head to head over the new currency: Information.

For the benefit of those who haven’t attended any of our workshops, here’s a summary of the 7 principles of the Act:

1) General Principle – Consent is key for this principle. Any information collected must only be used for the purpose it was given. For instance, I am giving you my information for you to process my housing loan. The next thing I know, your company is trying to sell me frozen yoghurt. Not nice. Additionally, don’t collect more than what is needed for that purpose. If you are collecting for a lucky draw, you don’t technically need to know his Credit Card number, do you?

2) Notice and Choice – My favourite. This constitutes a privacy statement at data collection points. You need to tell data subjects the nature of the data processed, purpose, rights and obligations of subject and of course, in both Malay and English. Yes you need both languages. The data subject should have a record or copy of the agreed notification. Time to be creative.

3) Disclosure – Only disclose what the data subject has consented during collection and also maintain a disclosure list to third parties

4) Security – This is where we generally come in directly. While the others constitutes a lot of process changes, this principle simply states, “practical steps” must be taken to protect information from misuse, loss, modifications, destruction etc. Basically the entire scope of Confidentiality, Integrity and Availability. Unfortunately, breach notification and safe harbour principles are not included in the our PDPA.

5) Retention – Once the data has fulfilled its purpose, it should not be further retained.

6) Data Integrity – Steps must be taken to ensure personal data is accurate, complete, not misleading and updated to serve its purpose(s).

7) Access – Data subject must be able to access data held by the data user. The channel to correct inaccurate, misleading data must be provided to the data subject.

Additionally, PDPA has certain restrictions as follows:

a) Sensitive Personal Data – certain types of data (political opinions, religion, physical and mental health etc) cannot be processed without explicit consent. I suppose I won’t be seeing any more forms with “Religion” anymore. I always fill in “The Force” for fun, anyway.

b) Cross Border – This is a major one. Personal data cannot be transferred to a place outside Malaysia unless the minister specifies or individual has consented. In light with cloud computing, questions will arise if we store our customer CRM in the cloud like AWS or even Google Docs. How will this affect us?

c) Explicit rules for Direct Marketing – Direct marketing, to sell and solicit products and services, is affected the most. Now data subject can ask marketer to remove and not process the data anymore for direct marketing. There is a jail term of 2 years and RM300K fine.

d) Registration – Certain industries are required to register. For those not listed, well, we don’t need to register, but the Act still covers us!

e) Codes of Practices – In the near future, data user forums will be formed, where codes of practices/guidelines for compliance will be created. The commissioner still has the final say on the effectiveness of these codes of practices. This should be interesting, as in PKF we already have a special audit for Personal Information Management, as well as a product to specially scan for certain types of personal information in our client’s network.

In conclusion, we always knew this day would come so we are not overly surprised. We have given hundreds of hours of free workshops over last year and I hope, if you are one of them who received, that it has spurred you on to compliance even before this announcement.

Because 3 months is an awfully short time for compliance. No better time than now to get started! Contact us at avantedge@pkfmalaysia.com or +603 6203 1888 if you require more information on our Personal data services, scans and workshops.

PCI-DSS: Challenges faced in Malaysia

What began as separate compliance programs by major card brands, are now under a unified umbrella called PCI-DSS (Payment Card Industry Data Security Standard). PCI-DSS serves to protect the cardholder data and also the interest of the card brands. VISA, AMEX, MasterCard, JCB, and Discover (Diners Club) established the Payment Card Data Security Standards Council (PCI SSC). The goal of PCI SSC is now to guide any institution, especially the financial institutions to have better security surrounding their credit & debit card businesses.

Is there a need for yet another compliance program? The short answer is a resounding yes. According to StatiscsBrain[1], as of 18th of June 2013, in the United States itself, businesses have suffered more than 11 thousand cases of card fraud with an average loss of $4,930 for each case of card fraud. In total, it has cause a financial loss of around $ 21 million on average.

In Malaysia itself, we are now faced with an alarming rise of card fraud cases. According to Bank Negara Malaysia (BNM), [2] while the cases of fraud have decreased overall, the fraud volume still remains high. If the customer, merchant and the banks do not put in a concerted effort to fight these fraud cases, many more will fall victim to increasingly sophisticated attacks. This is also supported by The United States Security Council (OSAC)[3] stating: “credit card fraud has decreased but still continues to become a problem”. In short, the frequency might be less but the amount that each case brings is still a problem to the authorities.

In terms of the PCI DSS certification, a majority of large financial institutions in Malaysia, especially banks and larger service providers are still undergoing the process. Some have taken more than 3 years to be certified. PCI DSS is already a difficult compliance to begin with, with more than 300 plus controls to deal with. Financial institutions are pressured by card brands to ensure that PCI DSS become their utmost priority, both internally as well as for any service provider or merchants dealing in card business.

In some cases, one of the reason for certification delay is the lack of documentation done on each system in the PCI scope, causing a lack of proper maintenance on the system. This covers from software to hardware and network devices. This will affect the certification in the remediation phase where the administrator really needs to identify each data flow concerning card data and needs to clean up to ensure that unnecessary rules, ports and services are disabled. The amount of legacy rules, unmanaged inventory are significantly large, especially for banks that own distributed branches. The undertaking is intimidatingly difficult.

Furthermore, the implementation of Malaysian Electronic Payment System (MEPS) which allows the sharing of ATM networks, gives the ability for customers to withdraw their money via a different ATM bank using a debit card. Debit cards are under the PCI purview, and is often doubled as an ATM card that can be used to make purchases just by deducting the account balance by swiping it. These have enabled the storing of user Primary Account Number (PAN) in the institutions and to some extent in clear text for settlement purposes which violates the requirements in PCI DSS. The transmission of the card data must also be addressed, as the card data might travel through non-secured channels such as normal emails, or open channels that can cause the data to be intercepted in transmission. Therefore controls have to be taken to ensure that all networks in and out are secured

Another point of concern is the PCI DSS exercise budget. Every organization big or small, private or public listed have a certain amount of budget allocated. While IT budgets have grown significantly, it has to be reminded that PCI is NOT an IT initiative. It is a business initiative and might take a large portion of the said budget. The budget would be used for the engagement of third party experts or actual products to mitigate the concerns. Due to budgeting, companies often overlook certain areas by cutting down the budget such as avoiding expert consultancy. They opt to do the certification or the remediation process by themselves in order to save some portion of the budget. This has short term yield but sacrifices the long term goals. Taking on PCI is akin to journeying through an uncharted maze. Having a guide is therefore critical especially for first timers in a relatively large company.

In conclusion, there is still a long way to go for Malaysian companies to abide 100% to the requirements of PCI-DSS. For that, they need to  fully understand the  requirements and ensure proper scoping is done (as there are cases where one can OVERDO the compliance). For a free scoping or advisory on how we can help you in your PCI-DSS journey, drop us an email at avantedge@pkfmalaysia.com or contact us at +603 6203 1888.

Article by: Wafiy Karim

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