Security for information technology (IT) refers to the methods, tools and personnel used to defend an organisation’s digital assets. The goal of IT security is to protect these assets, devices and services from being disrupted, stolen or exploited by unauthorised users, otherwise known as threat actors. These threats can be external or internal and malicious or accidental in both origin and nature.
An effective security strategy uses a range of approaches to minimise vulnerabilities and target many types of cyber threats. Detection, prevention and response to security threats involve using security policies, software tools and IT services.
Unfortunately, technological innovation benefits both IT defenders and cybercriminals. To protect business assets, companies must routinely review, update and improve security to stay ahead of cyber threats and increasingly sophisticated cybercriminals.
Physical security protects people, hardware, software, network information and data from physical actions, intrusions and other events that could damage an organisation and its assets. Safeguarding the physical security of a business means protecting it from threat actors, as well as accidents and natural disasters, such as fires, floods, earthquakes and severe weather. A lack of physical protection could risk the destruction of servers, devices and utilities that support business operations and processes. That said, people are a large part of the physical security threat.
Theft and vandalism are examples of human-initiated threats that require physical security solutions. A physical security breach doesn’t necessarily need technical knowledge, but it can be just as dangerous as a data breach.
Some of the most significant advances in security technologies during the past few decades have been in the area of physical security—i.e., protection by tangible means. Physical security has two main components: building architecture and appurtenances, equipment and devices.
A building can be designed for security by such means as planning and limiting the number and location of entrances and by careful attention to exits, traffic patterns, and loading docks.
There are three parts to physical security:
- access control
The success of an organisation’s physical security program depends on effectively implementing, maintaining and updating each of these components.
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Controlling access to office buildings, research centres, laboratories, data centres, and other locations is vital to physical security. An example of a physical security breach is an attacker gaining entry into an organisation using a Universal Serial Bus (USB) flash drive to copy and steal data or put malware on the systems.
The goal of access control is to record, monitor and limit the number of unauthorised users interacting with sensitive and confidential physical assets. Access control can be as simple as barriers like walls, fences and locked doors. Identification badges and keycodes are also part of an effective physical access system. Physical identification is a great way to authenticate the identity of users attempting to access devices and areas reserved for authorised personnel.
More sophisticated access control methods include various forms of biometric authentication.
These security systems use biometrics, or unique biological characteristics, to authenticate the identity of authorised users. Fingerprint and facial recognition are two examples of typical applications of this technology.
Surveillance involves the technologies and tactics used to monitor activity in and around facilities and equipment. Many companies install closed-circuit television cameras to secure the perimeter of their buildings. These cameras act as both a deterrent to intruders and a tool for incident response and analysis. Cameras, thermal sensors, motion detectors and security alarms are only some examples of surveillance technology.
Testing is a reliable way to increase physical security. Companies with solid security protocols test their policies to see if they need to be updated or changed. Such tests can include red teaming, where a group of ethical hackers try to infiltrate a company’s cybersecurity protocols.
Information security is also referred to as infosec. It includes strategies used to manage the processes, tools and policies that protect digital and non-digital assets. When implemented effectively, infosec can maximise an organisation’s ability to prevent, detect and respond to threats.
Infosec encompasses several specialised categories of security technology, including:
To protect applications from threats that seek to manipulate, access, steal, modify or delete software and its related data. Application security uses a combination of software, hardware and policies that are called countermeasures. Common countermeasures include application firewalls, encryption, patch management and biometric authentication systems.
It is a set of policies and technologies designed to protect data and infrastructure in a cloud computing environment. Two critical concerns of cloud security are identity and access management and data privacy. Penetration testing, network protocol maintenance, man-in-the-middle (MitM) detection, and application scanning are some tools infosec professionals use to secure the confidentiality of information.
Cloud security is a responsibility shared by the cloud service provider (CSP) and the tenant or the business that rents infrastructure such as servers and storage. A legal grey zone in cloud security can occur if CSP agreements are not well constructed. For example, if a tenant’s server is compromised by cybercriminals who gain access to another tenant’s server, it can be clear who is to blame?
Requires network nodes to meet specific security standards, like the Federal Information Security Modernisation Act, before establishing a secure connection. Node devices include personal computers, laptops, tablets, smartphones and equipment such as point-of-sale terminals, barcode readers, sensors and internet of things (IoT) devices.
Internet security protects software applications, web browsers and virtual private networks that use the internet. Techniques such as encryption, for example, protect data from attacks such as malware, phishing, MitM and denial-of-service attacks.
Is referred to as wireless security. It protects mobile devices, such as smartphones, tablets and laptops, and the networks they connect to from theft, data leakage and other attacks.
Network security defends the network infrastructure and the devices connected to it from threats such as unauthorised access, malicious use and modifications.
Supply chain security
Protects the network between a company and its suppliers, who often have access to sensitive information such as employee information and intellectual property. The SolarWinds data breach in 2020 demonstrated how vulnerable organisations could be when supply chain channels are poorly monitored. SolarWinds is an IT company that manages client networks and systems and has access to the customers’ IT. Once hackers infiltrated SolarWinds’ update server, they installed a virus that acted as a digital backdoor to client systems and data.
Information technology security concepts and principles
Some concepts and principles form the foundation of IT security. Some of the most important ones are:
- Application lifecycle management. This protects all stages of the application development process by reducing exposure to bugs, design flaws and configuration errors.
- Defence in depth. This is a strategy that uses multiple countermeasures simultaneously to protect information. These methods can include endpoint detection and response, antivirus software and kill switches. Defence in depth is based on the military principle that it’s more difficult for an enemy to beat a multilayered defence system than a single-layer one.
- Patch management. Patches and updates are acquired, tested and installed for flawed code in applications, operating systems and firmware.
- Principle of least privilege. This principle strengthens IT security by limiting user and program access to the lowest access rights needed for them to do their jobs or functions.
- Risk management. This is the process of identifying, assessing and controlling security risks that threaten an organisation’s IT environment.
- Vulnerability management. With this approach, security admins routinely check for vulnerabilities by identifying, verifying, mitigating and patching IT security weaknesses as they arise.
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Other Types of Securities
Security is a financial instrument, typically any financial asset that can be traded. The nature of what can and can’t be called security generally depends on the jurisdiction in which the assets are being sold.
the term broadly covers all traded financial assets and breaks such assets down into three primary categories:
- Equity securities – which includes stocks
- Debt securities – which includes bonds and banknotes
- Derivatives – which includes options and futures
Types of Securities
Equity almost always refers to stocks and a share of ownership in a company (which is possessed by the shareholder). Equity securities usually generate regular earnings for shareholders in the form of dividends. Equity security does, however, rise and fall in value in accord with the financial markets and the company’s fortunes.
Debt securities differ from equity securities in a meaningful way; they involve borrowed money and the selling of a security. They are issued by an individual, company, or government and sold to another party for a certain amount, with a promise of repayment plus interest. They include a fixed amount (that must be repaid), a specified interest rate, and a maturity date (the date when the total amount of the security must be paid by).
Banknotes (or promissory notes) and Treasury notes are all examples of debt securities. They all are agreements between two parties for an amount to be borrowed and paid back – with interest – at a previously established time.
Derivatives are a slightly different type of security because their value is based on an underlying asset that is then purchased and repaid. The price, interest, and maturity date are all specified at the time of the initial transaction.
The individual selling the derivative doesn’t need to own the underlying asset outright. The seller can pay the buyer back with enough cash to purchase the underlying asset or offer another result that satisfies the debt owed on the first.
A derivative often derives its value from commodities such as gas or precious metals such as gold and silver. Currencies are another underlying asset a result can be structured on, as well as interest rates, Treasury notes, bonds, and stocks.
Derivatives are most often traded by hedge funds to offset risk from other investments. As mentioned above, they don’t require the seller to own the underlying asset. They may only require a relatively small down payment, making them favourable because they are easier to trade.
Hybrid securities, as the name suggests, combine some of the characteristics of both debt and equity securities. Examples of hybrid securities include equity warrants (options issued by the company itself that give shareholders the right to purchase stock within a certain timeframe and at a specific price), convertible bonds (bonds that can be converted into shares of common stock in the issuing company), and preference shares (company stocks whose payments of interest, dividends, or other returns of capital can be prioritised over those of other stockholders).
Characteristics of Securities
- Securities are fungible. In other words, they are assets that can be exchanged quickly and easily for others of the same type. Just like any quarter can be replaced by any other, any share of a company’s stock can be replaced by any additional share of the same company’s stock. While both quarters and a company’s shares can change in value over time, at any one moment in time, all quarters are worth the same amount, and all claims of a specific company’s stock are worth the same amount.
- The securities exchange is regulated by the SEC (Securities and Exchange Commission), a regulatory agency.
- The legal definition of financial security varies between countries and jurisdictions.
- Securities are usually divided into four general categories—debt, equity, hybrid, and derivative.
How Securities Trade
Publicly traded securities are listed on stock exchanges, where issuers can seek security listings and attract investors by ensuring a liquid and regulated market in which to trade. Informal electronic trading systems have become more common in recent years, and securities are now often traded “over-the-counter” or directly among investors either online or over the phone.
An initial public offering (IPO) represents a company’s first significant sale of equity securities to the public. Following an IPO, any newly issued stock, while still sold in the primary market, is referred to as a secondary offering. Alternatively, securities may be offered privately to a restricted and qualified group in what is known as a private placement—an important distinction in terms of both company law and securities regulation. Sometimes companies sell stock in a combination of public and personal order.
In the secondary market, also known as the aftermarket, securities are transferred as assets from one investor to another: shareholders can sell their stakes to other investors for cash and capital gain. The secondary market thus supplements the primary. The secondary market is less liquid for privately placed securities since they are not publicly tradable and can only be transferred among qualified investors.
Investing in Securities
The entity that creates the securities for sale is the issuer, and those who buy them are, of course, investors. Generally, securities represent an investment and a means by which municipalities, companies, and other commercial enterprises can raise new capital. Companies can generate a lot of money when they go public, selling stock in an initial public offering (IPO), for example.
City, state, or county governments can raise funds for a particular project by floating a municipal bond issue. Depending on an institution’s market demand or pricing structure, raising capital through securities can be a preferred alternative to financing through a bank loan.
On the other hand, purchasing securities with borrowed money, an act known as buying on a margin, is a popular investment technique. In essence, a company may deliver property rights, in the form of cash or other securities, either at inception or in default, to pay its debt or other obligation to another entity. These collateral arrangements have been growing of late, especially among institutional investors.
Regulation of Securities
Securities and Exchange Commission (SEC) regulates the public offer and sale of securities.
Public offerings, sales, and trades. Securities must be registered and filed with the SEC’s state securities departments. Self Regulatory Organisations (SROs) within the brokerage industry often take on regulatory positions as well. SROs include the National Association of Securities Dealers (NASD) and the Financial Industry Regulatory Authority (FINRA).
The definition of a security offering was established by the Supreme Court in a 1946 case. In its judgment, the court derives the meaning of a security based on four criteria—the existence of an investment contract, the formation of a joint enterprise, a promise of profits by the issuer, and the use of a third party to promote the offering.
Residual securities are a type of convertible security—that is, they can be changed into another form, usually that of common stock. A convertible bond, for example, is residual security because it allows the bondholder to convert the security into common shares. Preferred stock may also have a convertible feature. Corporations may offer residual securities to attract investment capital when competition for funds is intense.
When residual security is converted or exercised, it increases the number of current outstanding common shares. This can dilute the total share pool and their price also. Dilution also affects financial analysis metrics, such as earnings per share, because a company’s profits must be divided by a more significant number of shares.
In contrast, if a publicly-traded company takes measures to reduce the total number of its outstanding shares, the company is said to have consolidated them. The net effect of this action is to increase the value of each claim. This is often done to attract more or more prominent investors, such as mutual funds.
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