Category: IT Audit (Page 1 of 11)

The Biggest (Real) Myths of PCI-DSS: Part 2

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So, continuing the Real Myths of PCI-DSS, lets move down the list.

Real Myth 5: All PCI-DSS services must be outsourced

Now, this is a very important myth to clear up. Because it directly relates to the usually biggest concern of all: cost. A while ago, we provided an idea on how to cost PCI-DSS, and break it up into certification/advisory costing and implementation cost. While the certification-advisory cost is easier to gauge based on locations, processes, card storage, activities covered , implementation cost is harder to gauge. Because number one – you don’t know your scope yet. This means, you may have 10 or you may have 200 systems in scope, you don’t know. Some go, “Ah but we know, because we have already decided our scope!” and we go, “Ah, but that’s the Real Myth 7, that you can decide your own scope…read on, intrepid adventurer of PCI!”

In any case, one way to cap a cost or save cost is to in-source your work, i.e have your own people provide the implementation services. There are no “PCI-certified” company to actually do the implementation services. All services – except for ASV scans – can be performed by your own, if you are qualified enough to do it (more on that later). I’ll throw in some services that for a typical PCI project, is a must:- Penetration testing, Internal Vulnerability assessment, secure code review and code training, patching, logging and monitoring and daily review of logs, card data scan, application testing, systems hardening, segmentation penetration testing, encryption, key management etc. These are fairly typical activities you will find in PCI – and you can do it all on your own if you have the resources and knowledge to do it. So, don’t feel cornered by any firms or consultants stating that these services must be done by them in order to pass PCI-DSS!

Real Myth 6: All service providers MUST be certified to do implementation services

This is an extension of Real Myth 5. So once the company decides to outsource the PCI services, in the case where they do not have the resources to do it internally – they go about requiring “PCI qualified” service providers to do these services. We’ve seen this requirement before where the requirement was to be a “QIR – Qualified Integrator and Reseller” to do services like penetration testing and code reviews and such. QIR isn’t created for that. QIR is created for implementing merchant payment systems and has nothing to do with the services mentioned. Aside from that, there is a growing call for PCI services to be only performed by “Certified Penetration Testing Companies” with CREST or individuals with certifications like Certified Ethical Hacker etc. Now, while these are all well and good, and certainly mentioned even by the PCI-DSS as a guidance in selecting your vendors, these are by no means a requirement by the standard. Meaning, the QSA cannot enforce all your testing to be done by the above said certified entities if you have ready, qualified and experienced personnel on your end to do it. Again – this doesn’t mean any Tom, Dick and Harry, Joe and Sally can perform testing or activities in your environment. The above certs and qualifications obviously carry weight and we should not dismiss the fact that if an organisation takes the trouble to go through CREST, versus a company that was set up two days ago, and employ 2 testers working in Elbonia – which you should prefer or which one will the QSA has less of an issue of – that’s pretty obvious. What I am stating here is that, we’ve seen many veterans who are far more efficient or experienced in systems testing and security testing than we can ever hope to be and for whatever reason, they don’t bother much about these paper chase or certifications.

At the end, the QSA may raise a query on who carried out the test and may choose to check the credentials of the testers, but in most cases, if the testing seems to be in order, most QSAs are OK with it.

Real Myth 7: PCI scope and application of controls can be determined by the customer

This one is my favourite. Because it played out like an episode of a slapstick comedy. I was called one day by one of our clients who had a new group handling their PCI-DSS program. You see, we’ve been doing their program for four plus years and we’ve been servicing them fine for years – but the new group handling PCI now isn’t well versed with PCI. It’s frustrating because no matter how many “knowledge transfer” sessions we gave, we still ended up with the same questions. We realised we were stuck in a Groundhog Day scenario, where things never change no matter what we do. The group wasn’t technical, which was an obstacle but overall, I think maybe they just have too many things on their plate.

So on this call, they said they were going to compare our quote to other providers this time around and I said, yeah, it’s fine. They then proceeded to give me a scope to quote and I commented, “Hold on, this is the wrong scope. This is the list of assets two years back. You have now changed your scope, and there is a new list of assets under scope for PCI.”

From there, the proverbial excretion hit the fan. They maintained how did I know their scope? I said, well, we helped you guys work it out. Your operations team is aware of it, that every year we help you validate your scope (as per PCI-DSS guidance). And they went: “Why must the scope come from you? We are the owners of the environment and the project, so we decide the scope!”

Aha. This is where our points diverge. You see, while the organisation does have the overall responsibility in setting the scope for PCI, PCI-DSS also has a guidance document “Guidance-PCI-DSS-Scoping-and-Segmentation” that defines how that scope should include assets and networks and therefore affecting how and where services should be implemented. So for illustration:

Company A says, “Well, we have a payment gateway and a payment switch business. We also have a call center and a merchant business that accepts credit cards through kiosks or direct POS acceptance in our outlets. Now, getting our merchant environment to be certified is going to be a pain. We have decided to just certify our payment switch environment which is isolated in a cloud, and not related to our payment gateway at all which we are just about to launch a few months from now, so there are no transactions yet.”

So there you go, Company A has set their scope and from the outset, it kinda looks fine. Yeah, if these are all isolated environment, it’s ok. In any case, in the report of compliance, the QSA would detail any services offered by the company that are NOT assessed, making clear what are the services NOT PCI compliant for that company.

However, what Company A cannot decide are the services and the assets involved in their scope. There is a method to scoping defined by PCI-DSS and we have written at length in this article here.   There are a few ways to minimise the scope by segmentation and so on, but for instance if you run a flat network and insist on it being flat, then everything within that network comes into scope – be it it’s your payment gateway, your merchant business servers, your call center laptops etc. So you can ‘define’ your scope, but what gets sucked into your scope to do hardening, pentesting, patching and all the PCI controls – that is already defined by the PCI on how it’s done. And we just have to identify these assets and systems and networks that get sucked into scope. PCI is a like a giant vortex or blackhole. Everything that is sitting on the same network or touches the systems in CDE, gets pulled into scope.

So there you have it. We will be exploring the final 3 Real Myths of PCI soon, but for now, if you have any queries on PCI-DSS, or ISMS or Theory of Relativity and Blackholes, drop us a note at pcidss@pkfmalaysia.com. Till then, be safe!

The Biggest (Real) Myths of PCI-DSS: Part 1

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Sometime back, PCI-DSS published the Top 10 Myths of PCI-DSS which we debunked in our series of Myths of the Top 10 Myths here. In this article, we are going to jump into the real actual Myths of PCI-DSS and we will explain it as we go along. We are not going to touch on the original myths published by PCI Council, but this is really very much based on our experience in PCI-DSS for more than a decade here in Malaysia, and what we often hear companies going about.

Often this misinformation is because the client facing PCI-DSS finds it hard to dissect all the information needed for the standard. Unlike standards like ISO27001, PCI-DSS is like a journey with different routes to the same destination: PCI Compliance. There are 3 separate destination for PCI – Level 1 Certified with QSA, Level 2 Self Assessment with QSA/ISA signoff, and Level 2 Self Assessment with Self Sign off (no QSA, no ISA signoff). Of course if you are a merchant, then you have level 3 and level 4, but those are the same as the third iteration where you signoff the SAQ on your own without involvement of QSA/ISA.

But while the destination itself can be clarified, the whole process to obtain PCI can be convoluted. Some clients are told by their banks, that because they do not store credit card, they are considered SAQ level 2. Or some are told because they have a website, they must do ASV scans. Or some are told that QSAs must be involved in everything. Some are even told, that local QSAs must be hired, and not any other QSAs. Some are of the opinion that PCI is a license they need to purchase, or a training they need to do. And some are of the opinion that the ASV scan will make them PCI compliant.

Hence, it’s easy with all the above misinformation and more, that customers get frustrated with the expectations of PCI. When they hear a level 1 certification may set them back 15 – 20K USD or more, or that it would take them 6 months or so, they balk at it. It’s funny because often I would start my sales pitch by saying: “At the end of our conversation, it would be goal to try to get you to avoid getting services from us if possible.” Because it’s essentially true. Our job at the beginning isn’t to peddle services or consulting or audit that our clients may not need. Our goal is to provide them with enough information of PCI-DSS so they can make informed decisions. And yes, even if those informed decisions would be that they can avoid PCI, or do their own SAQ without any consultation or ASV scans or certification, or get exemption from their banks/customers or anything else that can lower their requirements for PCI-DSS. And yes, many people who have called us actually just pay us by saying ‘thank you’ and we never hear from them again. Because as advisors, it’s better we start doing the right thing at the very beginning instead of focusing to sell services that customers do not need. This philosophy has been adopted from the start of our company – which is one of the reasons why I failed so miserably in my previous corporate role as regional head of professional service sales. Or also why I was once told off by a potential business partner that I was a poor sales person and that he preferred to work with an organisation with someone better handling sales. Ah well.

So here are some of the top REAL myths of PCI-DSS that needs to be debunked, burned, destroyed and thrown out of the window for the garbage that it is.

1) All PCI-DSS Projects Require ASV Scans

2) ASV scans makes you PCI compliant

3) All PCI-DSS requires (local) QSA

4) All PCI projects are the same (One Certificate to Rule them All)

5) All PCI-DSS services must be outsourced

6) All service providers MUST be certified to do implementation services

7) PCI scope and application of controls can be determined by the customer

8) PCI-DSS gets easier and cheaper every year

9) A company is considered PCI compliant even after the expiry of certification, due to 90 days grace period from the council

10) If the company is an ISMS certified company, they have already complied to 90% of PCI-DSS

So there is quite a bit of stuff – some may be half truths and other are utter nonsense – we need to uncover, likely will need to break this article up into two parts. Let’s jump into it.

Real Myth 1: All PCI-DSS projects require ASV scans

This myth is often peddled by those who are selling ASV scans as part of their service. Don’t get me wrong, we also do ASV scans through our ASV partners for sure, but you can’t go around town telling people that all PCI requires ASV scans when it doesn’t! Read SAQ A. Read SAQ B. You don’t see ASV being mentioned anywhere in the SAQ except for this portion in Part 3a:

ASV scans are being completed by the PCI SSC Approved Scanning Vendor (ASV Name)

And under “PCI DSS Self-Assessment Completion Steps”:

Submit the SAQ and Attestation of Compliance (AOC), along with any other requested documentation—such as ASV scan reports—to your acquirer, payment brand or other requester.

The thing is, if you go through each control under the SAQ, the ASV control 11.2.2 isn’t mentioned, so therefore it’s not required. It’s highly frustrating to us, especially when travel agencies for instance who are just doing EDC terminal business (SAQ B) that connects directly via cellular or phone line to acquirer coming to us and asking us to quote for an ASV scan for their website. We tell them, you don’t need to do ASV scan for your website unless its in scope. You can force us to sell to you, but it’s against our moral code to sell you stuff you don’t need. We take a look at it, find its a simple site with only information and they tell us, “Well, their PCI advisor previously told them to scan their website.” No. You don’t need to. Don’t waste your money, and don’t do it unless you have a website in scope or you are doing an SAQ requiring ASV scan or you consciously make a decision to do it out of best practices and security requirement – NOT as a mandatory PCI-DSS activity.

So, please, take a look. Even SAQ A, usually adopted by e-commerce sites that redirects to a payment gateway for card input – where there is likely a website, the myth is that ASV needs to be done. Read SAQ A. Again, no requirement for ASV scan. You can still do an external scan for security purpose, but strictly for compliance? No. Not needed, unless requested specifically by the acquirer.

And yes, we do have ASV scans as part of our service. But that shouldn’t make us charlatans peddling services to customers when it isn’t mandatory. If the client still wants to pick it up, ok, fine – but don’t say it’s compulsory when it’s not!

Real Myth 2: ASV scans makes you PCI compliant

We have flogged this one half to death in our earlier article here: ASV scans=/ PCI Compliance

I won’t repeat what we have said there but by far, this is a myth that gets peddled a lot. One, sadly, is because the propagation of this nonsense seems to be acceptable by banks. I hear: “Oh, no problem, the bank says all we need to do is to run an ASV scan on our website.” I interject: “Wait sir, you aren’t doing that e-commerce business. You are doing a call center with virtual terminal payments..” <Click> <Dial tone due to hang up>

So there you have it : companies and merchants that have no business doing ASV scans , but using ASV scans as a means to ascertain PCI compliance. We get this even weirder ones when we are trying to obtain an AoC from one of our client’s service providers and they pass us their passed ASV scan report. We ask what the heck that is and they go – that’s our PCI compliance, so please shut up and stop bothering us. And it’s so difficult to go out and explain to them that whoever told them that, is wrong, and they have to go through the actual PCI compliance, which their wonderful ASV scan may (or may not) be part of that overall PCI Compliance.

Real Myth 3: The Auditor (QSA) must be Local

This is one of the strangest myths ever.

We get calls from customers going, “Is your QSA a Malaysian?” And I go, “No, we work with our partner QSA, from India, US or Singapore”. And they go, “Well we want a Malaysian QSA.” And I ask, “Why?”, and most of them are not able to ascertain why they need the QSA to be local, except that it may be a requirement checkbox in their document or policy.

Ok, I can’t argue with your policy, if you have nationalist preferences to your auditors for whatever reason. But it’s not logical for companies to have that requirement, that only local QSAs must be used. PCI-DSS never stated that. In fact, its preferable to have a QSA with regional/global experience as opposed to a local QSA. If PCI-DSS had this requirement for local QSAs to carry out audits, how can QSAs then say they have ‘regional experience’? You see the conundrum? You want an experienced QSA company, yet you want a QSA that is only local. If every enterprise in the world thinks that way, how would QSAs have regional/global experience? By that argument, then all QSAs would be local to that country – not just Malaysia – but each country would only have QSAs auditing in that country and nowhere else. And immediately you can see the fallacy and illogical argument attached to this myth. But this myth still prevails, for whatever reason (we sort of know the reason actually).

PCI-DSS requires a lot of experience. The last thing we need is a QSA with only a handful of experience and no operational idea of how to run things or recommend solutions and just rely on a checkbox and some cute marketing gimmicks. I’ve seen plenty of good auditors overseas, a whole lot better than the local ones I come across and vice versa. “Local QSA requirement?” It could be peddled by local auditors attempting to block off better equipped, or even cheaper auditors from overseas (better or worse) and really narrowing the options for their clients, who would be hemmed in by such requirement, thinking its a PCI-DSS requirement. It’s not.

If you mean by local support- that they can respond faster since they are local, then, yes, there is some sense in that. If you mean they are cheaper compared to a guy in US, then yes, but let that be a commercial decision and not a technical one. Sometimes even overseas (good) QSAs can be cheaper. Local support I agree, 100%. Nothing is more frustrating than sending a message to someone and them taking 24 hours to reply due to them being in another timezone. Local presence, local support – yes. But they technically don’t need to be a QSA. They could be consultants and there is a very good case in that. We noted it here in this article “PCI-DSS – So Why Aren’t We QSA?”. We consciously made a decision NOT to be a local QSA a few years ago to avoid possible conflict and to support our clients a lot easier and not to be bogged down by auditor responsibilities in PCI.
QSAs are a busy and itinerant lot. Aside from handling other audits, writing reports, they also need to be careful of overstepping their independent role by advising and implementing for their clients and then auditing this same control they devised.

There is really, if you come down to it, no perceivable value in saying having a “local QSA” is better or not. Having local support throughout the PCI-DSS compliance is important – and whoever is supporting should have at least the same or more knowledge than the QSA.

In some QSA Companies, they have a set up to differentiate the auditor and the consultant. Whereby the consultant is different from the auditor to ensure there is more independence. We have the same set up – PKF is the consulting arm and we deal mainly with implementation, testing and assistance of our client to get past PCI. The QSA is well, the QSA in this case, and they can do their audit without being too involved in the implementation. We know as much (and if not more, sometimes) than the QSA due to our operational experiences, and this puts us in a better position – conflict free- to get our clients certified.

So, no, in this opinion, there is no real value or even PCI requirement in having a local QSA, because that generally does not make sense and is counter-intuitive to peg a customer to only select local, less experienced auditors. Most QSAs can (and should) be able to do regional or even inter-regional work because a QSA Company, by its very nature is a regional or global company anyway (QSA pays to be auditors based on regions, and not country specific). Again, while our opinion may be biased because of the strategic decision we made years ago, we made that decision with all these considerations in mind.

Select the best QSA option based on experience, pricing and quality, not because they are local or non-local.

Real Myth 4: All PCI projects are the same (One Certificate to Rule them All)

A customer once said that we didn’t have much value and all we did was to forward their emails to the QSA for validation (not true). He said he had his team done PCI across other countries and we were just making it more complicated than necessary since they have already been experienced, implying that we hoodwinked them.

It’s very difficult to talk to people who are in this position because you can see from the onset, they do not support outsourcing advisory and consulting and they have a personal vendetta against this profession. So we don’t need to speak reason to them. In this case, we decided to pull out of the deal for advisory and all other works of implementation except for the ASV scans.

Two years from starting their PCI project on their own, and they are still in the wilderness. We ended up supporting them in any case, and perhaps their thought process had somewhat soften now because we are now finally seeing the end of the project, with us (ironically) leading them to it.

And their ‘experience’ from other PCI compliance projects? Different experience. Some were basically e-commerce SAQ A, A-EP type, some were their retail arm SAQ B or B-IP. But what they were doing in Malaysia was the outsourcing, call center and BPO – all of which involves credit card storage, processing and transmission.

Not all PCI-DSS projects are created equal.

Another company employed the ‘One Certificate to Rule Them All’ philosophy. They were providing warehouse storage facility to one of our clients, essentially storing physical copies of forms containing credit card information. So, this is a service provider, providing storage that needs to be assessed for their physical security.

They immediately told us they are already PCI compliant and they will send us the certificate. We insisted on AoC but they obliged us with their ‘certificate’ anyway, emblazoned with their QSA logo proudly, stating – SAQ C-VT Certified.

Huh? What has SAQ C-VT (merchant SAQ) got to do with the warehouse storage you are offering to my client?

Apparently that SAQ C-VT cert is from one of their parent companies overseas or something and has as much relation to our current project as me running to become the president of the United Sates. It means, One Certificate 100% does not rule them all. It’s a completely different business function and you can’t just use another SAQ or AoC from another parent/child company that is selling ice-cream cakes and had their call agent processes certified and say this applies to your warehouse storage facility half a world away!

Ok, we are halfway there, bear with us. Writing all these myths really can drag an article and you can probably read the frustration oozing out each paragraph. I’ll admit, we get extremely frustrated, but we also must remind ourselves – most of them (customers, banks – NOT QSAs, they don’t get any free passes for giving misinformation!) do not know better and they are just doing what they think it’s right or what they have been told by so called consultants or QSAs. That’s why we need to set their paths correctly so they know what options are there before them. So, we need to stop getting frustrated and blaming them for bad decisions, and get more involved in educating and providing information so they can make good decisions.

We will continue the next time once we catch our breath and go through the other wonderful misinformation on PCI-DSS we have heard over the years. Till then, drop us a note at pcidss@pkfmalaysia.com on anything to do with this standard or other standards like ISMS/ISO27001 etc.

PCI-DSS: Estimating the Cost

Ah money.

This is how most conversations start when we receive calls from PCI. How much will it cost?

I think this is one of the toughest subject for PCI, because it really depends on what is being done by the service provider/consultant for you, and how much you can actually do the implementation of PCI-DSS on your own. And obviously it also depends on your scope, and on top of that, depends on compensating controls if any, or any current controls you have in place. And then it also depends on the validation type – SAQ vs RoC and so on.

So, in the classic riposte to this classic question, it would be “It depends”.

Where we really need to clear the air though is the myth that once you have done PCI-DSS the first time, everything gets easier on the renewals and everything gets cheaper year on year going forward. That is for another article. There is a lot of things going on in PCI-DSS, and if you approach it from a product perspective (like most procurement do), you end up either sabotaging your entire compliance, or getting an auditor willing to sign off on God knows what, and later on realise that you’ve been out of compliance scope all the while.

To start with the pricing, you should understand a bit on the cost of PCI-DSS. And we should start with the QSA, because after all they are the focal point of the PCI program. They are the Qualified Security Assessor. Of course, you can opt to do your PCI (if allowed) without a QSA involvement (Merchant level 3 or 4) and just fill up an SAQ with or without assistance from consultants; but for the most part, a QSA would be involved in the signoff for larger projects, and this is where the cost questions take life.

Lets look firstly at the base cost of becoming a QSA. It’s very helpfully listed for us here: https://www.pcisecuritystandards.org/program_training_and_qualification/fees

So here are the maths. Imagine you are a QSA with projects in Malaysia: to start off, you will need to set aside over RM100K just to get you qualified to to audits in the Asian Region. We’re not talking about Europe or Latin America or USA here. Just APAC. That’s qualifying the company. A company, to service any region properly will probably need a bunch of QSAs trained and ready, let’s say around 3 to start off with. Each QSA will need to go for a training costing around RM12 – 13K, so let’s say you have 3 (which is very few), you are setting aside around MYR 50K for that. On top of that, there are obligations such as Insurance Coverage that is specified in the QSA Qualifications Requirement document. So it depends on which insurance you are taking, but it could be in the region of around MYR6K or above premium (spitballing). There is a requalification each year as well.

QSAs then can make their own calculations on how fast/long they need to recover their cost, but let’s say they set aside 200K just to get things set up with 3 or 4 QSAs, then they need to recover that cost. A man day of a QSA/Consultant may range from quite widely in this region but let’s say you decide to price it at “meagre” MYR2K, depending on how senior you have, so overall, you would need to have almost around 1.5 months of engagement of their QSAs just to recover the cost of setting up shop. That’s why its not unreasonable to see higher rates, because of the cost it takes.

You have salaries to consider as well. You also have to consider if something happens to one of your clients, where you happily audited them remotely and believed everything they said, and found out that they have done jack-shoot in their actual environment and you have to handle the fallout of liabilities.

Some procurement compares QSA engagements to firewall engineers. No knock on other technical engineers, but the cost of getting a Checkpoint firewall engineer and the cost to maintain one QSA is a different proposition. I am not saying one is better than another technically (I’ve seen a lot of firewall engineers who could put any auditor into their place, due to their extremely proficient technical skills), I am stating the underlying cost behind the position, which is why PCI-DSS is priced at a rate that’s comparable to say, CMMI, as opposed to say, the ISO9001.

On top of just auditing cost, QSAs take into account the actual support they are giving year on year. Some of them unburden this cost to partners and consultants who have been trained (such as PKF – and there are also other matters such as independence of audit vs implementation advisory which we will discuss later), or some of them take it upon themselves. But you must know the QSAs job is not easy. Aside from auditing and supporting, there is evidence validation and report writing. Then there is the matter of undergoing the Quality Assurance process, which brings more resources/cost to the QSA company. All this while travelling to and from audit sites, reviewing etc – the life of a QSA (ask any QSA) is itinerant and often travel heavy. Burnout may also be a concern, so if the QSAs are involved in the day to day or week to week assistance to their client’s PCI program, this isn’t sustainable.

Understanding all these underlying cost will allow the procurement or whoever is evaluating to understand how to look at projects. If a QSA is pricing extremely low, the question you will need to ask is: What’s being offered? Because all QSAs have more or less the same baseline cost and if a QSA priced themselves at RM800 per man day, and they are a small shop with less than 5 QSAs, what would then be their recovery rate? 200 man days of engagement to recover their initial cost? Most procurement wouldn’t think of things like this and they would just go to their “BAFO” Best and Final Offering – but when you break it down on what is expected, then you would understand that not all PCI offerings are the same. I could simply quote a client 3 man days of QSA work for the final audit and be done. That would be the best and final offering that would win. But what about the healthchecks, the management of the evidences and how they are submitted, the quality checking, the scope optimisation process, the controls checking etc etc?

And in line with our effort estimation, one should also split the pricing into two: Audit and Consultation vs Implementation service and products.

Because if let’s say we find your Requirement 10 is completely empty, and you are thinking to purchase a QRadar SIEM to address it, you could be looking upwards of RM60,000 just to get the product in. Couple that with training for engineers, usage, hiring etc, and you are well over the six figure stage just for Requirement 10! How about testing and application reviews? If you don’t have the personnel on this, then you have to consider setting aside another RM50K etc depending on how many applications/mobile applications/ systems you have in place. So it’s highly essential to have the QSA/consultant assist you in scope reduction. Most may not view it that way, so it’s essential to find an auditor who is experienced and who looks after your interest.

Finally, understand that cost of audit/consulting would be different depending on how you go through PCI-DSS. Level 1 certification requires the effort of validating evidences, doing gap assessments and auditing and writing the RoC. Level 2 SAQ with QSA signoff is slightly easier, as there is no RoC to write while the last option of self signed SAQ without QSA is obviously a lot less costly as you are basically doing a self-signoff. Those are just broad guidelines and not how QSAs may price it, because as I say, due to variables.

You could opt to use the rule of 1/3 when it comes to estimating these costs, although your mileage may vary. For instance, if the QSA throws a RM100K audit fees (comparing it to CMMI fees) for a Level 1 Certification, then a RM60-65K (2/3 of the Level 1) for a SAQ Signoff could be reasonable; and furthermore if you just need them in for consultancy for the non QSA signoff SAQ, it could be 30K (1/3 of the level 1) or so. But note, the SAQ self signoff can be carried out entirely on your own, so the cost could be close to zero as well.

I know its a tough one to place this as pricing varies so often. We aren’t selling a product with specific hardware/software. We are selling a service that will take you through 6 months of work to cover scoping exercise, project meetings, changes, consultancy and advisory, pre-audits and post audits checks, evidence and artefacts sample validations, audit, report writing, training and all the variables in between.

Let us know if you need us to look at your PCI today, drop us a note at pcidss@pkfmalaysia.com and we will attend to you immediately!

PCI-DSS: Estimating the Effort

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One of the most often asked question whenever we have a first call on PCI-DSS would be: How much effort will it take? The other question would be, how much would it cost? Let’s take a look at the first question first.

Misconceptions aside, which we have written on (whether PCI is a training program, a certificate, a license, a subscription etc), effort dedicated to PCI-DSS has always been a question for clients and potential clients (and ex-clients) of ours. And I admit – it’s not an easy thing to get hold of. Because, like costing and pricing, there is so much variable. But we do have some common guideline one can take – especially when it comes to initial budgeting and estimation of effort. It’s common this is needed and although it isn’t all the time accurate, it at least provides you with some idea on how this PCI-DSS standard is approached.

Before we start – we assume that you will be undertaking PCI-DSS the proper way. We say ‘proper way’ as we’ve seen a few consultants or advisors out there that just tell our client that PCI-DSS is just sorting out documentation, and sell a bunch of policy and procedures templates for RM2K and say bye. That isn’t the proper way. That’s amounting to modern day charlatans. Or some other companies knowingly decide to do a self signoff when their controls are not in place, or have any clue what a firewall is, but still mark firewall reviews as “Compliant”. If you are planning to go down this path, good luck and God speed.

So now – the best way to look at effort is (like pricing) split it into two. This makes it less overwhelming when you are evaluating vendors, because like pricing (effort generally has a direct correlation to pricing anyway) – it can vary A LOT. We see companies that price extremely high and we see companies that price extremely low. For anyone in procurement without an iota of understanding in technical projects, it’s going to be very overwhelming. Just by looking at pricing or effort by itself on paper and not understanding what it is puts you into a position of comparing apples to oranges, or potatoes to durians. Making a decision to go for the lowest price (which is common practice in Malaysia) works if you are evaluating a product, because the specifications are standard. Not so much for PCI projects as they vary significantly. So here’s a break down for procurement who may have some challenges understanding the project. Again, this is a guideline we use to help our clients and there is no ‘standard’ approach to measuring effort for PCI-DSS.

The two main portions of PCI-DSS for effort estimation are:

a) Advisory/Consulting/Audit Services

b) Implementation/Technical Services

a) Advisory/Consulting/Audit Services

This constitute a few parts :

i) Scoping and Optimisation of Scope

This is a critical part of advisory. Scope is generally determined by the customer, but most customers have no idea what the scope is. The critical thing about scoping is that it’s easy to either miss out things to do for PCI-DSS, or to ‘over-do’ it. An example here of missing things out would be: “Oh crap, I didn’t realise we had 15 other servers in scope for PCI-DSS penetration testing, and now only 2 weeks left to the deadline.” An example of overdoing it would be: “We just purchased this wonderful DLP system for PCI-DSS for RM5 million and busted our entire technology budget for the next year and a half. Cool eh? What? PCI doesn’t mandate it? We could have other processes in place to address that control? Ooops.”

ii) Gap Assessment

Nobody starts from a zero. Well, at least that’s our experience. In some form or another, most companies already have controls in place. The purpose of this assessment is to find out how close these controls are to the baseline requirements of the standard – hence the word “gap”.

iii) Remediation Support and Pre-Audit

Not to be confused by implementation services. Remediation support is the advisory work that comes during the remediation. A lot of services will be done during the remediation period and it’s often quite overwhelming, even for someone with project management background. Evidences need to be collated and submitted in specific formats. Evidences also need to be validated first before submission, as evaluation of evidences for PCI is a key part of the whole program. Often times, this is missed out and clients just submit lock, stock and barrel whatever they have and cry foul when the whole batch is rejected and they run out of time. It’s critical for evaluation of evidences to be done properly and in a proper methodology, whether by milestone a’la Prioritized approach , or based on the QSA’s approach. A pre-audit is usually done as well to ensure clients are well and prepared for the final certification audit. This pre-audit acts like an internal audit review for ISO equivalent. A good consultant here should also provide monthly healthchecks to ensure the implementation isn’t go wayward. In fact, we spend almost 2-3 days a week with our clients onsite around a month before the actual audit starts to ensure they have everything in place for a successful audit.

iv) Certification audit and post audit

Cert audit is what the QSA does. After that, there may be a period of 2 -3 weeks to clean up whatever non-compliances found during the audit. During this time, the Report of Compliance is also prepared for level 1 clients. The process of RoC can take up to 4 – 6 weeks from the QSA, so be aware of this timeline.

b) Implementation/Technical Services

The reason this should be separated from the advisory/consultation portion is because this is actually done during stage a.iii above. It can be done by your vendor, but it also can be done internally if you have the resource. PCI-DSS doesn’t specifically require stringent standards to do services. We have customers insisting that PCI-DSS requires CREST certified penetration testers to pass. That’s simply not true at all. If you have qualified individuals (and this may not even mean they need to have certifications) who can demonstrate aptitude in doing testing in both usage of tools, experience and methodology, it’s considered acceptable, as long as they are independent enough and free from conflict of interest, for instance they shouldn’t be the application developers doing the penetration testing for the app. While it’s all fine and well to have an experienced company certified with a dozen certification to do testing, the baseline interpretation of PCI has always been agnostic to these specific certifications. So now you know. On the other hand, you also can’t just do the remediation services as and how you please. Firing up OpenSSL scanner and calling it a web application pentest won’t cut it.

There are a whole lot of other services here to be done – firewall reviews, patching, logging and monitoring, physical security, encryption, policies and procedures, web app testing, secure code review, SDLC, card data scans and the list goes on. There is a lot of work here, and how you estimate the effort should depend on what sort of gaps you get.

This is the hardest portion to estimate.

For Cert and Advisory, the effort is usually based on two factors:

a) Processes – is authorisation/settlement in scope? Is backend processes in scope? Is call center in scope? Is POS /ecommerce scoped? Is managed Service scoped? etc

b) Locations – is your DC/DR in place? Are branch offices scoped in? What about outlets (for merchants like retailers/fast food/oil and gas) etc?

The more processes in place for PCI, the more needs to be audited. The more locations, the more time. One may think, what about systems in scope? Wouldn’t auditing 10 servers vs 200 servers be vastly different? The answer is: it depends. Because technically, if you have a large amount of assets, we revert to sampling basis so we can still have a control of how many systems to audit. Some QSAs will deal with either 10-15%, but it really ranges depending on the distribution, the error variance, the type of systems, the standardisation of processes etc. So because of sampling, auditors and consultants have a measure of control over the effort required for large/small projects. Locations are similar, but locations oftentimes need a physical audit, so it’s not just remotely looking at screenshots or evidences, but actually going onsite – which requires time and effort.

For implementation/technical services, there is no sampling. A lot of confusion stems from clients thinking that implementation of controls are also on a sample basis. No. If there are 250 servers in scope, all need to have PCI controls (patched, pentested, secured, hardened). The auditor may select 20-50 systems from that set to review, but that doesn’t mean you just implement controls on 20-50 subset of the systems. So for implementation, the effort is directly related to how many assets/systems are in scope to implement. Furthermore, these should be broken down into

a) Services that can be done in-house – anything that can be done in-house, whether services or with products like logging and monitoring system etc

b) Services that require external vendors(like an ASV scan or any services you may not be able to do in-house)

c) Services that require product purchases or implementation – this is important as there would be effort for implementation, migration, testing. Somewhat similar to b), but there may be products you can actually implement yourself.

Putting it all together

Whew. That’s a lot of ground.

As you can see, the budgeting process can actually be:

Advisory/Cert Budget –> after gap assessment –> Implementation Services Budget.

Because only after the gap, would we know what we need to fix, right?

Unfortunately, procurement is often faced with the prospect of budgeting for ALL phases from the get go. This produces a lot of problems, and a LOT of variations. Procurement runs the risk (without them knowing) of getting consultants/QSA on board for advisory and cert and under-budgeting/over-budgeting for the implementation service. Any QSA/consultant worth their salt should be able to do ALL the services listed above under Advisory/Cert portion. Many QSAs only do certification only with a sprinkling of support. This is a problem because their involvement is often too late and because their price point is so low, they generally don’t do any internal advisory support, healthchecks etc. This is basically you get what you pay for concept.

As for the implementation – budgeting BEFORE knowing what is wrong is akin to giving medicine before having a diagnosis. So you could either give the right medication or the wrong one. A wrong one could be providing panadol for someone facing terminal brain cancer, or providing a liver transplant to someone having stomache from eating too much nasi lemak. Both bad.

Instead, procurement should give some standard guidelines as much as possible – number of assets estimated, number of locations, number of processes, number of firewalls, number of applications etc. The more information provided, the more accurate the effort is. Also, request for a breakdown of each, so at least you know if they quantity changes later, how much would it be more or less. Armed with this, it may be worthwhile to guestimate that the implementation cost if majority services are outsourced, would be around 1 – 1.5x the cost of the advisory. That is an extremely liberal estimate, but at least that’s what we see mostly.

We do have clients that insist on us passing them a ‘generic’ PCI cost without them providing us any information. I don’t know why. But mainly because they don’t know what’s happening. In this case, we just interpret the scope for them from an external perspective and make assumptions and send to them an estimate. But because of this, the effort and price range varies INCREDIBLY.

Remember – least effort doesn’t mean that PCI-DSS is being achieved. Because this isn’t a product, there is a huge amount of variation in effort estimation by different companies. Procurement needs to get onboard and understand the process and not just look and say – oh, why does this guy give me only 10% effort of yours? Because, Mr/Mrs Procurement, they are giving you 10% of what you need. Or, on the flip side, someone is giving you 200% more than what you need.

The next article, we will have a look at price points and see what’s really there to budget for in a PCI -DSS program. Before that, drop us a note at pcidss@pkfmalaysia.com for any enquiry and we will get back to you immediately! Be safe!

PCI-DSS: The AoC Problem

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Recently we were reminded once again why we constantly state that PCI-DSS must chuck away the Certification of Compliance for good. Not only it’s an unacceptable documentation to the PCI Council, but it presents a lot of problems for auditors and assessors, as well as organisations seeking PCI-DSS compliance evidence from their service providers.

Let’s go back to how PCI-DSS flows in the first place.

PCI-DSS applies to all organisations that store, process and transmit credit/debit card under the umbrella of Visa, Mastercard, Amex, JCB and Discover/Diner.

Requirement 12.8 further extends the need to manage service providers where card data is being shared, and where “they could impact the security of the customer’s cardholder data environment”. That word is key because many service providers we have spoken to retorts they are out of scope of PCI-DSS of their clients because:

a) They only provide infrastructure and has no access to card data

b) They only store physical copies of forms that are sealed in boxes and they don’t access it

c) They only provide hosting

d) They only provide customer service support

e) They only provide toilet cleaning services

Of the 5 most popular services above, only the last one, we can probably surmise, does not require PCI-DSS. The rest – not to say they are 100% applicable – would require at the very least a bit of scoping to determine if they are applicable or not for PCI. Such is the problem here.

Having established that even, say a cloud service provider that only provides IaaS, requires PCI-DSS, what is then the next problem?

We call it the problem of the AoC. Or rather, the lack-of-AoC. Or more accurately, the-refusal-of-service-providers-to-provide-AoC-since-they-already-have-the-Certificate-of-Compliance problem. Its a very long problem name, so we will just call it the Problem of the AoC.

The AoC is the Attestation of Compliance, which is basically a shortened version of the Report on compliance (ROC) or the Self Assessment Questionnaire (SAQ). So in ALL PCI-DSS Compliance, whether assessed by 3rd party or self assessed, there is an AoC. 100%.

This AoC will describe in summary what are the processes in scope of PCI-DSS AND services that are NOT in scope of PCI-DSS. This is absolute key. In Part 2 of the SAQ, it states the type of service and the name of Service included in the PCI-DSS compliance (below):

Right after that, we need to ensure there may be services being offered that for some reason is NOT assessed for PCI. An example here could be a company offering BPO services, but at the same time offering a payment gateway service. They could be PCI compliant for payment gateway but not compliant for their BPO – even though both would deal with credit cards. So we need due care in determining whether the service we are procuring from them is indeed, PCI Compliant.

This is very important. And the fact that most “Certificate of Compliance” actually does not state the scope of services under PCI-DSS, presents a problem for assessors.

We once had a very animated discussion with a large service provider providing a customer support application to our client that collected credit card information. The service provider insisted they are PCI-DSS compliant and they showed their ‘Certificate of Compliance’. The said their AoC is private and confidential and all of their customers have accepted their Certificate as proof of their compliance, which meant, we are obligated to accept it as well (according to their very animated representatives).

Now, we all know the Certificate of Compliance is as valuable as toilet paper (actually, maybe less, since toilet paper can sometimes be VERY valuable during the pandemic and panic buys) – so we insisted on them showing us their AoC. For the simple reason:

They offered the on-prem application to our client, i.e installed onsite to our client’s environment. Our client says since this application is ‘PCI-DSS’ compliant, we should not need to assess their application under Requirement 6 of PCI-DSS. Hmm.

This doesn’t sound right. The vendor kept insisting that PCI-DSS only requires them to show their Certificate, and that the information in their AoC are private and confidential and we have no right to request from them.

PCI-DSS is applicable to an environment, process and location. You can see these ALL clearly in the AoC. Not in the nonsensical and utterly useless Certificate of Compliance. Why we didn’t believe this was that, because the application was installed in our client’s environment, there shouldn’t be an instance where this application is “PCI-DSS” compliant. At most, they could claim an application to be PA-DSS compliant (or the new SSF compliant) – but that is also impossible as their application wasn’t a payment application related to settlement or authorisation – so it’s not eligible for PA-DSS! So how can this be ‘PCI-DSS Compliant’?

We were at an impasse. Because they refused to give their AoC, we refused to accept their Certificate of Compliance. They lodged a complaint, we stood firm. We were not going to pass our customer on the basis of some hocus-pocus documentation which was clearly NOT acceptable to the PCI council!

Finally, they relented, and gave us a redacted, valid AoC and telling us how wrong we were in insisting on this and we did not know what we were doing. But all we needed to see was the page above – where the scope of compliance was summarised. And in it, stated “XXXX Customer Service Cloud Solution”.

Cloud solution.

We asked the customer, did they subscribe to the cloud solution?

No, they didn’t. It was an on-prem. Installed, lock stock and barrel application into the VM managed by our client. In an environment and location secured by our client.

Wait, said the vendor. The on-prem solution is the same as the cloud solution backend they were using and have been assessed for PCI. So what was our problem? The only difference was that their ‘cloud solution’ was now installed on customer side, so this should still be acceptable.

So, well, that isn’t a cloud solution then, is it? I mean, if you have a secured safe and you put it into your high-security house, would that also mean you can put the same safe in the middle of Timbuktu somewhere and still have the same level of security? (No offense to Timbuktu, we are just using that as a reference…we should stop using it actually but oh well.) Wouldn’t the cloud solution also be assessed for its environment, processes and policies? Would this be the same on the customer end?

The point here, is that based on the AoC, we can clearly say that the PCI compliance isn’t applicable to the on-prem solution. So we still have to assess the application as it is, under Requirement 6, under the client’s PCI program.

This isn’t any ‘victory’ or whatever we can claim, but it is so extremely frustrating to waste so much time on matters that would not be any issue at all, if the problem of the AoC is resolved. Just HAVE THE AoC TO ATTEST PCI-DSS! And stop this Certificate baloney! Because of this, we end up behind schedule and we have to chase up again and again.

So, read the AoC thoroughly before you decide on a vendor/service provider – because the certificate they provide to you could very well be invalid to the services they are actually offering you. Insist on the AoC.

Drop us a note at pcidss@pkfmalaysia.com to know more about your compliance. We will respond to you immediately!

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