Category Archives: Security economics

Social-science angles of security

Why privacy regulators are ineffective: an anthropologist's view

Academic papers, Legal issues, Politics, Security economics, Security psychology

Privacy activists have complained for years that the Information Commissioner is useless, and compared him with captured regulators like the FSA and the Financial Ombudsman. However I’ve come across a paper by a well-known anthropologist that gives a different take on the problem.

Alan Fiske did fieldwork among a tribe in northern Nigeria that has different boundaries for which activities are regulated by communal sharing, authority, tit-for-tat or monetary exchange. For example,labour within the village is always communal; you expect your neighbours to help you fix your house, and you later help them fix theirs. (This exasperated colonialists who couldn’t get the locals to work for cash; the locals for their part imagined that Europeans must present their children with an itemised bill for child-rearing when they reached adulthood.) He has since written several papers on how many of the tensions in human society arise on the boundaries of these domains of sharing, authority, tit-for-tat and the market. The boundaries can vary by culture, by generation and by politics; libertarians are happy to buy and sell organs for transplant, where many people prefer communal sharing, while radical socialists object to some routine market transactions. Indeed regulatory preferences may drive political views.

So far so good. Where it gets interesting is his extensive discussion of taboo transactions across a variety of cultures, and the institutions created to mitigate the discomfort that people feel when something affects more than one sphere of regulation: from extreme cases such as selling a child into slavery so you can feed your other children, through bride-price and blood money, to such everyday things as alimony and deconsecrating a cemetery for development. It turns out there’s a hierarchy of spheres, with sharing generally taking precedence over authority and authority over tit-for-tat, and market pricing following along last. This ordering makes “downhill” transactions easier. Alimony works (you once loved me, so pay me money!) but buying love doesn’t. Continue reading Why privacy regulators are ineffective: an anthropologist's view →

Workshop on the Economics of Information Security 2013

Academic papers, Politics, Security economics, Security psychology

I’m liveblogging WEIS 2013, as I did in 2012, 2011, 2010 and 2009. This is the twelfth workshop on the economics of information security, and the sessions are being held today and tomorrow at Georgetown University. The panels and refereed paper sessions will be blogged in comments below this post (and there’s another liveblog by Vaibhav Garg).

Security and Human Behaviour 2013

Academic papers, Politics, Security economics, Security psychology, Social networks, Usability

I’m liveblogging the Workshop on Security and Human Behaviour which is being held at USC in Los Angeles. The participants’ papers are here; for background, see the liveblogs for SHB 2008-12 which are linked here and here. Blog posts summarising the talks at the workshop sessions will appear as followups below. (Added: there is another liveblog by Vaibhav Garg.)

Liveblog – MedConfidential.org launch

Legal issues, News coverage, Politics, Security economics

I’m at the launch in London of the new campaign for medical privacy, MedConfidential.org. Sam Smith and I will be liveblogging the day’s events in comments below. For background, see here, here, here and here. Most of today’s audience are from groups for whom medical privacy is particularly important, such as charities dealing with rape victims, substance abuse, sexual health and child wefare.

Should we boycott John Lewis?

Authentication, Legal issues, News coverage, Politics, Security economics, Security psychology

Last weekend, my wife and I were in Milton Keynes where we bought a cradle as a present for our new granddaughter. They had only the demo model in the shop, but sold us one to pick up from their store in Cambridge. So yesterday I went into John Lewis with the receipt, to be told by the official that as I couldn’t show the card with which the purchase was made, they needed photo-id. I told him that along with over a million others I’d resisted the previous government’s ID card proposals, the last government had lost the election, and I didn’t carry ID on principle. The response was the usual nonsense: that I should have read the terms and conditions (but when I studied the receipt later it said nothing about ID) and that he was just doing his job (but John Lewis prides itself on being employee-owned, so in theory at least he is a partner in the firm). I won’t be shopping there again anytime soon.

We get harassed more and more by security theatre, by snooping and by bullying. What’s the best way to push back? Why can businesses be so pointlessly annoying?

Perhaps John Lewis are consciously pro-Labour given their history as a co-op; but it’s not prudent to advertise that in a three-way marginal like Cambridge, let alone in the leafy southern suburbs where they make most of their money. Or perhaps it’s just incompetence. When my wife phoned later to complain, the customer services people apologised and said we should have been told when we bought the thing that we’d need to show ID. She offered to post the cradle to our daughter, but then rung back later to say they’d lost the order and would need our paperwork. So that’s another 30-mile round-trip to their depot. But if they’re incompetent, why should I trust them enough to buy their food?

I invite the chairman, Charlie Mayfield, to explain by means of a follow-up to this post whether this was policy or cockup. Will he continue to demand photo-id even from customers who have a principled objection? Will he tell us who in the firm imposed this policy, and show us the training material that was prepared to ensure that counter staff would explain it properly to customers?

UK bank fraud up by 11% in 2012, but how much do customers lose?

Banking security, News coverage, Security economics

Today, the UK Cards Association (UKCA) published their summary of bank fraud for 2012. This provides an important insight into banking fraud, and the level of detail which the UK banks provide is very welcome. The UKCA figures go back to 2007, but I’ve collected the figures from previous releases going back to 2004. This data reveals some interesting trends, especially related to the deployment of new security technologies.

UK Cards Association fraud statistics 2012
larger version (PDF)

The overall fraud losses in 2012 are £475.3m, up 11% from the 2011 level, but for the purposes of comparison it is helpful to exclude the losses from phone banking since these figures were only available since 2009 (and are only 2.7% of the total). If we look at the resulting trend in total fraud  (£462.7m) we can see that while there was an increase in 2012, that is from a starting position of a 10-year low in 2011 so isn’t a reason to panic. We are still far from the peak in 2008 of £704.3m.

[You may have noticed the miniaturised graph in line with the text above, which an an example of a sparkline and I’ll be using these throughout this post to more clearly show trends in the data. Each graph shows the change in a single value over the 2004–2012 period, and is followed by the figure for 2012 in red.]

However, there is a large omission in the UKCA data – it records losses of the banks and merchants but not customers. If a customer is a victim of fraud, but the bank refuses to refund them (because the bank claims the customer was negligent), we won’t see it in these figures – as confirmed by a UKCA representative in an interview on BBC Radio Merseyside on 2007-02-19. We don’t know how much is missing from the fraud statistics as a result, but from the Financial Services Authority statistics we can see that there were 483,666 complaints in the first half of 2012 against firms regarding disputed charges, so the sums in question could be substantial. But despite this limitation, the statistics from the UKCA are valuable, especially in that it gives a break down of fraud by type.

Continue reading UK bank fraud up by 11% in 2012, but how much do customers lose? →

Health record privacy in Scotland

Legal issues, News coverage, Politics, Privacy technology, Security economics

Last week I spoke at a conference on digital health at the Scottish parliament. The talks are now online; my talk is here, and my slides here. At present, medical records in Scotland are organised differently under its fourteen different health boards, with wide variations in privacy, safety and functionality. Needless to say, officials in Edinburgh see this as an opportunity for centralisation; they want to follow the sad story in England. The political dynamic north of the border is much the same: officials want to grab all the data, GPs are not keen, but the public’s not paying attention.

If you’re interested in these issues, save April 24th in your diary; there will be a big medical privacy event in London organised by a number of NGOs.

EU cyber security directive considered harmful

Legal issues, News coverage, Politics, Security economics

Yesterday the European Commission launched its new draft directive on cybersecurity, on a webpage which omits a negative Opinion of the Impact Assessment Board. This directive had already been widely leaked, and I wrote about it in an EDRi Enditorial. There are at least two serious problems with it.

The first is that it will oblige Member States to set up single “competent authorities” for technical expertise, international liasion, security breach reporting and CERT functions. In the UK, these functions are distributed across GCHQ, MI5/CPNI, the new NCA, the ICO and various private-sector bodies. And the UK is relatively centralised; in Germany, for example, there’s a constitutional separation between police and intelligence functions. Centralisation will not just damage the separation of powers essential in any democracy, but will also harm operational effectiveness. Most of our critical infrastructure is in the hands of foreign companies, from O2 through EDF to Google; moving cybersecurity cooperation from the current loose association of private-public partnerships to a centralised, classified system will make it harder for most of them to play.

Second, whereas security-breach notification laws in the USA require firms to report breaches to affected citizens, articles 14 and 15 instead require breach notification to the “competent authority”. Notification requirements can be changed later by order (14.5-7) and the “competent authorities” only have to tell us if they determine it’s in the “public interest” (14.4). So instead of empowering us, it will empower the spooks. But that’s not all. Member States must “ensure that the competent authorities have the power to require market operators and public administrations to: (a) provide information needed to assess the security of their networks and information systems, including documented security policies; and (b) undergo a security audit carried out by a qualified independent body or national authority and make the results thereof available to the competent authority” (15.2). States must also “ensure that competent authorities have the power to issue binding instructions to market operators and public administrations” (15.3) Now as Parliament has just criticised the Home Office’s attempt to take powers to order firms like Google and Facebook to disclose user data by means of the Communications Data Bill, I hope everyone will think long and hard about the implications of passing this Directive as it stands. It’s yet another unfortunate step towards the militarisation of cyberspace.

"Security Engineering" now available free online

News coverage, Security economics, Security engineering, Security psychology

I’m delighted to announce that my book Security Engineering – A Guide to Building Dependable Distributed Systems is now available free online in its entirety. You may download any or all of the chapters from the book’s web page.

I’ve long been an advocate of open science and open publishing; all my scientific papers go online and I no longer even referee for publications that sit behind a paywall. But some people think books are different. I don’t agree.

The first edition of my book was also put online four years after publication by agreement with the publishers. That took some argument but we found that sales actually increased; for serious books, free online copies and paid-for paper copies can be complements, not substitutes. We are all grateful to authors like David MacKay for pioneering this. So when I wrote the second edition I agreed with Wiley that we’d treat it the same way, and here it is. Enjoy!

Moore's Law won't kill passwords

Authentication, Security economics

Computers are getting exponentially faster, yet the human brain is constant! Surely password crackers will eventually beat human memory…

I’ve heard this fallacy repeated enough times, usually soon after the latest advance in hardware for password cracking hits the news, that I’d like to definitively debunk it. Password cracking is certainly getting faster. In my thesis I charted 20 years of password cracking improvements and found an increase of about 1,000 in the number of guesses per second per unit cost that could be achieved, almost exactly a Moore’s Law-style doubling every two years. The good news though is that password hash functions can (and should) co-evolve to get proportionately costlier to evaluate over time. This is a classic arms race and keeping pace simply requires regularly increasing the number of iterations in a password hash. We can even improve against password cracking over time using memory-bound functions, because memory speeds aren’t increasing nearly as quickly and are harder to parallellise. The scrypt() key derivation function is a good implementation of a memory-bound password hash and every high security application should be using it or something similar.

The downside of this arms race is that password hashing will never get any cheaper to deploy (even in inflation-adjusted terms). Hashing a password must be as slow and costly in real terms 20 years from now or else security will be lower. Moore’s Law will never reduce the expense of running an authentication system because security depends on this expense. It also needs to be a non-negligible expense. Achieving any real security requires that password verification take on the order of hundreds of milliseconds or even whole seconds. Unfortunately this hasn’t been the experience of the past 20 years. MD5 was launched over 20 years ago and is still the most common implementation I see in the wild, though it’s gone from being relatively expensive to evaluate to extremely cheap. Moore’s Law has indeed broken MD5 as a password hash and no serious application should still use it. Human memory isn’t more of a problem today than it used to be though. The problem is that we’ve chosen to let password verification become too cheap.