After breach, Hannaford details IT security remodel

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Hannaford Bros. plans to implement millions of dollars of new technology that will effectively overhaul its IT security infrastructure and allow the recently breached supermarket chain to exceed data security requirements, the company and industry experts said.

Company executives, during a teleconference Tuesday, said Hannaford has installed a round-the-clock managed security monitoring and detection service from IBM. In addition, the Maine-based retailer, with more than 270 stores, also now is encrypting traffic from the store register to the credit card processor.

Hackers reportedly stole 4.2 million credit and debit card records during the transaction transmission process, between Dec. 7 and March 10. Hannaford told regulators that intruders, either remotely or in person, planted malware, known as sniffers, to swipe the data as it moved along a private network.

As it stands now, that traffic – the type that travels internally from point-of-sale system to credit card processor – is not required to be encrypted, Avivah Litan, a research vice president at Gartner, told SCMagazineUS.com on Wednesday.

“That's absolutely ahead of the standard,” Litan said of Hannaford's decision to secure internal traffic. “If you've got the data storage taken care of and you're protecting the data in motion and you monitor insider access, then you've exceeded the scope of your compliance effort. That's the three main steps that a retailer should take if they want to be as bulletproof as possible.”

Existing Payment Card Industry Data Security Standard (PCI DSS) guidelines, to which all companies processing credit cards must adhere, only require the encryption of data traversing public networks.

The burden to encrypt private channels carrying transaction information should fall on the processor, but it does not, Litan said. Because most processors are not capable of accepting encrypted traffic, Hannaford will have to provide the decryption hardware as well, she said.

Additional measures planned  Hannaford plans include deploying new PIN encryption technology, host- and network-based intrusion prevention systems, updated firewalls, and a new information security management approach based on the ISO 27001 standard.

In addition to IBM, Hannaford has contracted with General Dynamics, Cisco and Microsoft “to apply military- and industrial-strength network security to a retail environment,” the company said in a statement.

“Hannaford understands how important this issue is to our customers and business partners,” the company said. “Hannaford will devote whatever resources are necessary to be a leader in the retail industry in providing a secure shopping environment for our customers.”

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