Three Parallels between the POS Breach at Target Corp. and Vulnerabilities in ERP systems

The decision of the Office of the Comptroller at the U.S Department of Treasury to recognize cyber threats as one of the gravest risks faced by organisations today appears to be vindicated by the disclosure of an unprecedented data breach at Target Corporation shortly after the release of the Comptroller’s report. Specifics of the breach may not be known until the completion of an investigation currently underway by a forensics firm hired by Target to examine the incident. However, early reports suggest that the event may be one of the most devastating data breaches in recent years. According to a statement released by Target yesterday, approximately 40 million credit and debit card accounts may have been impacted between Nov. 27 and Dec. 15, 2013. The breach appears to have involved all of Target’s 1800 stores across the U.S. Based on the current average of $200 per compromised record, some estimates have placed the damage of the breach at $8 billion, almost three times the company’s net earnings in 2012.

The significance of the breach is related not only to the volume of records that have may have been compromised, but the type of data believed to have been extracted from Target. This includes sensitive track data stored within the magnetic stripe of payment cards. The card numbers, expiration dates and verification codes obtained through the track data could enable the perpetrators of the crime to create and sell counterfeit payment cards. There are three primary methods for compromising track data in retail scenarios. The first involves targeting switching and settlement systems. These systems are usually heavily fortified and traffic is commonly encrypted. The second entails the use of card skimmers. However, it is highly unlikely that skimmers could have been successfully installed across Target’s nationwide network of stores without detection. Therefore, the mostly likely method used by the attackers to obtain track data in such large volumes was through the compromise of the software that processes card swipes and PINs within Point-of-Sale (POS) systems at Target. Unfortunately, POS systems are a neglected area of information security, often regarded as little more than ‘dumb terminals’. This point of view could not be further from the truth. Today’s POS systems are sophisticated appliances that often run on Linux and Windows platforms. Furthermore, readily-available software development kits (SDK) for POS systems designed to enable developers to rapidly deploy applications for such systems could be abused to build dangerous forms of malware. This is the most probable cause of the breach at Target. Herein lays the first parallel between POS and ERP systems: although both process large quantities of sensitive information and lay at the core of system landscapes, security efforts are rarely equal to the strategic importance of such systems or aligned to the risks arising from their architecture.

The second parallel relates to the method used at Target to access and install the malware within the POS systems. This could only have been possible if the attackers were part of the software supply chain. Therefore, they mostly took advantage of some form of insider access. The counterpart in ERP systems is the often blind trust placed by organisations in third party developers, consultants and system administrators with broad access privileges.

The final parallel is the use of malware specifically aimed at business systems rather than individuals or consumers. Both POS and ERP systems are witnessing a surge in targeted malware. Systems such as SAP have always contended with this threat. One of the earliest known Trojans for SAP was discovered in 2003: KillSAP targeted SAP clients and, upon execution, would discover and replace SAPGUI and SAPLOGON files. Today’s malware is capable of far more destructive actions such as key logging, capturing screenshots, and attacking SAP servers through instructions received from remote command and control servers. The recently discovered Carberp-based Trojan is an example of such a threat. You can learn more about the risks posed by this Trojan at the Microsoft Malware Protection Center.