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1178 words
26 October 1993
Financial Times

(c) 1993 Financial Times Limited. All Rights Reserved


Many companies fail to take basic precautions, despite the high cost of computer fraud which may exceed $4bn a year worldwide, reports Monica Horten / Computer Security.

A COMPANY director was visiting his doctor's surgery recently. He noticed that the receptionist was away from her desk and the computer on the desk was turned on. He pressed 'enter,' got a menu, chose patient records, and called one up on screen. He could have amended it or printed it out, and no one would have known.


The director in question happened to work for government computing specialist Lynwood Scientific Development, and his intentions were not malicious: he had in fact, called up his own record. But what if he had been someone with a grudge against another patient?

Security on computers is becoming more, rather than less of an issue, now that many organisations are using PCs and PC-networks instead of holding their data in separate computer centres.

Many companies, as in the above case of the doctor's surgery, do not recognise the PC as a potential source of security breaches.

In financial terms, computer-based fraud is thought to cost up to $4bn a year worldwide. But as electronic purchase and payment transfers increase with the advance of electronic data interchange (EDI) between businesses, the financial targets for computer 'hackers' may also increase.

'Companies don't seem to have adjusted well to the changing pattern of corporate computing. There is a feeling out there that 'it's only a personal computer," says Keith Hearnden, lecturer in security management at Loughborough University.

Mr Hearnden suggests that companies should work out what would happen if that PC were stolen, or lost in a fire. Replacing it, he says, would not be as simple as going to the high street and buying a similar model.

'You need the same operating system, configuration, software add-ons, and communications set-up,' he says.

In addition, the loss of data held on it, could cause more financial damage than the loss of the actual hardware - unless the precaution had been taken to keep disk back-ups in another location.

David Cockarill, Lynwood's business development manager, advises that common-sense measures should be taken in the office as a first line of action.

A simple precaution that could have been taken in the doctor's surgery, for example, would have been to use a key which blanks the screen, and turns off the keyboard. The casual browser cannot read anything. Confidential memos should be stored on floppy disks and locked away - 'You wouldn't leave a typescript on the desk, so don't do it with the electronic version,' says Mr Cockarill.

Mr Hearndon advises that staff should be told about computer security issues: the best time to do this is on an induction course when they join an organisation. He recently conducted a survey of 421 UK organisations, which showed that two-thirds do not bother to take this precaution.

It is common for staff to write their password on yellow stickers, posted on their screen. Anyone - clients or suppliers - visiting the office could see it, and use it later to hack into the network to access files. Training should include basics such as why staff should not reveal their password, and how viruses can be introduced to a computer, as well as proper procedures for taking disk-back-ups.

The best protection against viruses is simply to ban people from using any disk other than one that has been checked by the systems department - computer games, brought in by staff to play on their perosnal computers at lunch time, are a common hazard. Another sensible precaution is to forbid the uploading software from bulletin boards.

ONE simple course of action against hacking is to be more strict on the choice of passwords. According to Geof Soulsby, marketing manager at Racal Datacom, 80% of all passwords are contained in 100 known names or words - 'it isn't difficult for a hacker to guess those 100 words,' he says. They include the 10 most popular boys and girls names, a few swear words, and several four-to-six letter words. 'Dog' and 'cat' are the third and fourth most popular passwords.

David Clark, partner specialising in computer security at management consultants Touche Ross, says that there are no statistics on the extent of the problem of hacking, because few organisations will admit to it. But he added: 'Fifteen per cent of the organisations I deal with have a concern about hacking. They may either have experienced it or they are worried about it.'

It therefore follows that where a computer system or network is carrying information of high value to the organisation or its clients, something more than a password is needed.

Encryption of the data is not necessarily the answer. Encryption makes it impossible to read the data while it is travelling along the lines, but does not prevent unauthorised ac cess. Normally, encryption is part of a package of measures which utilise other cryptographical techniques to protect against and to authenticate the message.

Unauthorised access can be prevented by a 'challenge and response' system. Staff are given an electronic gadget that looks similar to a calculator. When someone logs on to the system, it sends back a challenge which appears on the screen. The challenge is entered into the gadget, which uses complicated mathematical algorithms to calculate a response, which must be entered into the system. If the gadget has obtained the correct response, the user is permitted to access the system.

Challenge and response systems make life difficult for hackers because the codes are different every time.

Even if a hacker obtained one code, they would not be able to use it to get in to the system. The algorithms used - known as DES - is licenced by the US Department of State, and its use is strictly controlled.

Challenge and response systems are used by Barclays and Natwest banks, as well as other commercial organisations, to protect sensitive payment and order data.

They are also used where people are regularly dialling in to a system from remote locations.

But the cost is not cheap. According to Mr Soulsby, the 'calculator' gadget costs around #50, but a large organisation such as a bank might buy 10,000.

Authentication of messages is done using a digital signature - an indication to the recipient that they have not been tampered with.

Mathematical algorithms scramble the characters in a message, and produce a 64-digit message string, which is then appended to the original text. The recipient uses the same algorithms to decode the string. If the message has been tampered with a different string would be produced.

Mr Clark recommends that a digital signature is used 'where it is vital that the recipient is assured of the source of the transaction.'

Typically, this would be in a banking environment, where large sums of money are involved.

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Iptegrity.com is the website of Dr Monica Horten. I am an  independent policy advisor: online safety, technology and human rights. In April 2024, I was appointed as an independent expert on the Council of Europe Committee of Experts on online safety and empowerment of content creators and users. I am a published author, and post-doctoral scholar. I hold a PhD from the University of Westminster, and a DipM from the Chartered Institute of Marketing. I cover the UK and EU. I'm a former tech journalist, and an experienced panelist and Chair. My media credits include the BBC, iNews, Times, Guardian and Politico.

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