ISO 27018 – the international standard for protecting PII in the public cloud – Where are we now?

Since its release in August 2014, ISO 27018 is becoming well established as the “go to” standard to help cloud customers to comply with their privacy obligations when using public cloud services.  Privacy regulators recognise and refer to the new standard.  Cloud customers are using it in their RFP requirements and in their assessments of CSPs.  And CSPs themselves can and should adopt and commit to the new standard. 

A guest post by Matthew Hunter (@matthew1hunter) and Daniel Jung.

A reminder

We reported last year about the publication of this new standard: “ISO/IEC 27018:2014 – Information technology – Security techniques – Code of practice for protection of personally identifiable information (PII) in public clouds acting as PII processors” (“ISO 27018”).

In a subsequent post, we discussed how ISO 27018 helps cloud customers in Singapore to comply with Singapore’s Personal Data Protection Act (PDPA).  We concluded that if a cloud customer engages a cloud services provider (CSP) that complies with ISO 27018 (e.g. adopts and contractually commits to ISO 27018), then the cloud customer can be confident that the CSP’s solution will help the cloud customer to comply with its key legal obligations under the PDPA relevant to its use of cloud services.  We carried out the same research for other countries and the same conclusion applies: Cloud customers who use CSPs that comply with ISO 27018 will be better able to comply with relevant privacy law obligations in Australia, Hong Kong, Japan Korea, Malaysia, New Zealand and European countries, including the France, Germany, Spain and the UK.

In this post we will look at the latest developments in the market in relation to ISO 27018 and at how ISO 27018 is becoming the “go to” standard to help cloud customers to comply with their privacy obligations.  We will also provide pointers for cloud customers, CSPs and regulators on how to benefit from ISO 27018.

The latest ISO 27018 developments

Regulators

Since August 2014, we have seen regulators around the world recognise and refer to ISO 27018 (and this should come as no surprise as regulators often refer to ISO standards (e.g. ISO 27001).

  • In Australia, the OAIC referred to ISO 27018 in its guide to securing personal information (January, 2015).
  • In Belgium, the privacy commission referred to ISO 27018 in its Guidance on Security & Privacy in the Cloud (December, 2014).
  • In Canada, the OIPC posted on its blog that ISO 27018 allows access the benefits of the cloud whilst keeping control of data (March, 2015).
  • In Germany, a state regulator’s cloud guidance highlights the use of ISO 27018 for cloud (October, 2014).
  • In Slovenia, the Information Commissioner indicated that ISO 27018 is consistent with its requirements and should help to raise the lack of confidence in cloud (January, 2015).

These regulators and others are continuing to consider the use of ISO 27018.  The Belgian authority is also working on an analysis of ISO 27018 to be included in a global recommendation to customers using cloud.  The PDPC in Singapore is also considering the use of ISO 27018.

Cloud customers

Customers in the public and the private sector are looking at including ISO 27018 in their RFP requirements and in their procurement contracts, in the same way they have done with other ISO standards.  These are the kinds of discussions we have been having with, and recommendations we are making to, our clients.

Cloud customers have been, in the past, slow to adopt cloud services.  In part, this has been because of regulatory concerns.  But ISO 27018 has provided cloud customers with a convenient solution to address privacy regulations when using public cloud services.  We have seen that cloud customers who use CSPs that comply with ISO 27081 will be better able to comply with relevant privacy law obligations in many jurisdictions.

Cloud services providers

CSPs can now adopt and commit to ISO 27018.

Earlier this year Microsoft, one of the leading CSPs in the market, became the first CSP to adopt and commit to ISO 27018.  An independent audit confirmed its services incorporate all of the ISO 27018 controls and the ISO 27018 controls will become part of Microsoft’s contractual commitment to its customers.  We expect to see other CSPs follow suit.

No standalone certification is available as yet for ISO 27018.  However, compliance with ISO 27018 is demonstrated through an ISO 27001 certification that incorporates all of the controls from ISO 27018.  By going through this kind of assessment process, CSPs (and their ultimately their customers) can be certain of their ISO 27018 compliance.  To remain compliant, CSPs must undergo yearly independent reviews.  This is what the likes of Microsoft will do.

The more regulators recognise and refer to ISO 27018 and the more customers require compliance with ISO 27018, the more CSPs will need to adopt and commit to ISO 27018.  Like other ISO standards before it, ISO 27018 will become the norm.

What next for ISO 27018?

Regulators are adopting ISO 27018, customers are requiring compliance with ISO 27018 and CSPs are committing to ISO 27018 compliance.  ISO 27018 is already becoming the norm (just like other ISO standards).

We expect this to continue.  The adoption of cloud services is increasing across all sectors: financial services, retail, energy, logistics, manufacturers, travel and all kinds of SMEs.  In the public sector governments have pushed “public cloud first” style policies in the US, Europe, Australia and Singapore.  It is in the interest of governments to allow cloud services to be adopted in the public and private sectors.  The benefits of cloud services are clear.  But at the same time the compliance challenge will not disappear.  The regulation of data is on the rise (and rightly so).  Data should be regulated; it is a valuable and sensitive asset.  This is why ISO 27018 is proving helpful; customers can benefit from cloud services but at the same time ensure compliance with privacy regulations.

Posted in ASEAN, Cloud computing, Data protection, Outsourcing, Services, Software | Tagged , | Leave a comment

Myanmar mobile banking and payment: where to start?

Myanmar is currently largely a cash economy.  In this post we consider the types of mobile banking and payments solutions we predict will first gain traction in the Myanmar market: remittance services and banking the unbanked.

Outside Myanmar, the way people bank and pay has been revolutionised: from the introduction of credit cards, telephone banking and mobile banking to the launch of PayPal and Bitcoin.  The global growth of e-commerce has been accompanied by an increasing demand for online and mobile payments systems.

It is possible to imagine places where the use of cash might disappear entirely in the future.Whilst the rest of the world has still not fully exploited the benefits of mobile banking and payments, Myanmar has yet to start.

Burmese brollies

Mobile banking and payment solutions

What do we mean by mobile banking and mobile payments?

Mobile banking means banking done from a mobile device.  Banks provide a portal to access banking services across mobile platforms, including via its website, apps for tablet and apps for smartphones.  The introduction of mobile banking usually requires banks with legacy systems to re-engineer their delivery methods (i.e. to digitise service delivery).

Mobile payments means using a mobile device for the initiation, authorisation and realisation of a payment transaction.  Mobile payments systems allow payments to be made a mobile device via a proximity payment or via a mobile remote payment.  Depending on the way the solution works, the parties involved can include customers, merchants, mobile payment service providers, telecoms companies and banks.

There has been rapid innovation and disruption globally.  From traditional payment systems (e.g. Visa) and Internet payment systems (e.g. PayPal) to varying mobile payment systems (e.g. M-Pesa, Apple Pay) and retailer-led systems (e.g. integration of customer behavioural data and store-cards).  There’s no winning ‘secret formula’ across global markets.  In some countries there are constrains to potential approaches.  In every market partnerships and alliances have been and are still critical to success (between e.g. telecommunication companies, technology manufacturers, traditional banks, payment companies and retailers).

The market in Myanmar and where to start

Both the telecoms and banking sectors are very underdeveloped in Myanmar.

There are a low number of access points, low customer awareness, a lack of services and a lack of infrastructure and processes.  However, these are focus sectors for investment by the Myanmese government and investors, and by foreign investors.

It is tempting to imagine that Myanmar can leapfrog ahead and adopt sophisticated mobile banking and payments solutions for all because it is unencumbered by legacy IT systems and processes and can dive straight into the deep end.  However, as Myanmar also lacks access points, awareness, services, infrastructure and processes, the starting point must still be basic.

One of the biggest current challenges is the lack of distribution networks for getting cash in/out.  In our view, remittance services will be one of the first services to be developed.

There’s no point developing fancy mobile banking solutions and payments if people can’t get cash in/out.  Providing the most basic banking services for a largely unbanked population will the next major focus followed by basic payment services.

Remittance services  

It is common for Myanmese families to work and live apart, and as economic development and foreign investment drives urbanisation it will only increase.  Domestic remittance services are need to help families to send money to each other.  There are also a large number of overseas Myanmese workers and so international remittance services are needed.

The challenge for this in Myanmar is that there is a bottleneck of cash in/out points.  A secondary challenge is that it is difficult to authenticate parties.  Telcos have the ability to address both of these challenges, because they offer outlets and a means to authenticate users.  One solution therefore is for the banks and the telcos to partner and integrate a basic remittance offering.

Banking  the unbanked  

Most Myanmese citizens have no bank account today.  Experience from Africa shows that a move from a cash system to a banking or quasi-banking system brings widespread benefits.  Again, however, the banks have the enormous challenge of building distribution (i.e. branch access), whereas the telcos are already building distribution and reachBank and telco partnerships are therefore a likely formula to success because the scale of the distribution network is critical.

Structuring and negotiating a successful mobile banking partnership

Banks have a clear role to play to build the banking services in Myanmar.  However, they do not have the networks or the technology to succeed alone.  Partnerships with telcos are most likely to offer success but what do the parties to such a partnership need to consider to make it work?

First, the parties must have a clearly defined idea of what the ‘end to end’ system will look like and which role each of the parties will play.

Second, the parties must consider the regulatory risks.  Do one or both of parties need a licence and can they comply with the licence requirements?

The commercial aspects of the deal will also need to be agreed.  Who is responsible for taking what actions and providing which services?  Can each party fulfill their relevant obligations?  What are the consequences if a party fails to meet its obligations?  And what is the price or reward for each party?

Final tips

Parties involved in these kinds of negotiations should never assume that the other parties know what they are doing.  The mobile payments and mobile banking space can be very complex and parties who are more familiar with in the space will use often use jargon.  You should not be afraid to ask simple and basic questions, especially in a new market.  Finally, don’t be wowed by complex solutions.  It’s definitely better to walk before you can run, so we predict the winners will be those who keep it simple and do the basics first.

This post was co-written with @matthew1hunter.

Posted in ASEAN, Commercial activity, Myanmar, Payment, Telecoms | Tagged , , , | Leave a comment

UK withdraws proposed updates to the Electronic Communications Code

On 22 January 2015, the UK Government withdrew its proposed changes to the Electronic Communications Code.

As the changes were unexpected, more time for consultation is not entirely unwelcome.

However, as the changes in large part were positive, I hope that this is only a delay and the proposals will be brought forward in due course.

Posted in Broadband, Fixed, Government policy, Mobile, Regulatory action, Telecoms, UK | Tagged | Leave a comment

UK proposes surprise changes to the Electronic Communications Code

Fibre optic trenchIn a surprise move, on 13 January the UK government announced plans to update the elderly (and, even to the House of Lords, rather incomprehensible) Electronic Communications Code which deals with the rights of telecoms operators to access public and private land.

Whilst the proposed changes in large part adopt the recommendations of the Law Commission’s report on the current Electronic Communications Code, the timing at the end of a coalition parliament and method (being part of a rather hotch-potch Infrastructure Bill) has come as something of a surprise.

The Government’s intention is to reduce the barriers to infrastructure investment and so expects that operators will benefit, relative to landowners, from the changes.

With thanks and acknowledgement to Warren Gordon, the key issues in the draft are:

  1. Better drafting. The plain English approach in the new draft is very welcome.
  2. Clearer interaction with the Landlord and Tenant Act 1954 in relation to seeking to recover possession. The proposed Code amends the 1954 Act to  provide that tenancies, the primary purpose of which is to grant Code rights, cannot benefit from the security of tenure rights under the 1954 Act.
  3. Conferring of Code rights. Code rights are only conferred by written agreement between the occupier and the operator, and the agreement only binds the occupier’s landlord if he agrees to be bound. However, there is a power for the court to impose an agreement by order if: (i) any prejudice caused is capable of being adequately compensated by money; and (ii) the public benefit in access to a choice of high quality electronic communications services, likely to result from the making of the order, outweighs any prejudice. However, an order may not be made if the court thinks that the relevant person intends to redevelop all or part of the land to which the Code right would relate, or any neighbouring land, and could not reasonably do so if the order were made.
  4. Consideration and compensation. Any court-imposed agreement must deal with the consideration to be paid, being an amount representing the market value of the relevant person’s agreement to confer or be bound by the Code right. The market value is assessed on the basis of the value to the operator of the agreement (note, not to the relevant person such as a landowner) and having regard to the use which the operator intends to make of the land. The court may also order compensation for loss or damage and the legislation sets out the bases for compensation. At the core of the new Code is the change to the wayleave valuation regime, which essentially moves valuation away from pure free market principles by requiring the use of the RICS Red Book. According to the Government’s Impact Assessment, this is expected to lead to a 10% reduction in wayleave payments (such as lease payments) from operators to landowners. It is expected that this will result in landowners’ revenue from wayleave payments decreasing by £30 million per year.
  5. Interim agreement. The new code allows an interim order to be made, with presumably matters such as compensation decided at a later and fuller hearing.
  6. Assignment of Code rights/upgrading or sharing use of apparatus. Operators can assign Code rights (although can be required to enter into an authorised guarantee agreement), upgrade or share the use of electronic communications apparatus subject to certain conditions and anti-avoidance provisions.
  7. Continuation of Code rights and bringing agreement to an end. A site provider who is a party to a Code agreement may bring the agreement to an end by giving a notice to the operator. The notice must state the end date, which must fall no earlier than after the end of 18 months from the day on which the notice was given,and also state the ground on which the site provider proposes to bring the agreement to an end (this includes that the site provider intends to redevelop all or part of the land to which the agreement relates or any neighbouring land, and could not reasonably do so unless the agreement comes to an end). Where such a notice is given, the Code agreement comes to an end in accordance with the notice unless within three months from the day on which the notice is given, the operator gives the site provider a counter-notice, and within three months from the day on which the counter-notice is given, the operator applies to the court for an order. However, if the court decides that the site provider has established the redevelopment or other ground, the court must order that the agreement comes to an end. Otherwise, the court can make one of a number of orders specified in the legislation. The operator may be required to make interim payments. There is also a procedure for changing an agreement, which again may involve applying to court for an order (it appears that there is no equivalent of the existing paragraph 20 “lift and shift” right).
  8. Removal of apparatus. There are also rights for a landlord to require the removal of apparatus if one or more of five conditions are satisfied, including the apparatus is no longer used for the purposes of the operator’s network; or there is no person with a Code right to keep the apparatus on the land. There is a procedure to enforce removal of the apparatus.
  9. Not retrospective. The new Code will not be retrospective.
  10. Code rightsCode rights may be granted to wholesale providers as well as service operators. Existing rights do not become Code Rights if an operator is later granted Code Operator status.

For more (and more learned) detail, see Warren’s update here.

Posted in Broadband, Fixed, Government policy, Mobile, Telecoms, UK | Tagged , , | 1 Comment

Will ISO 27018 help cloud customers to comply with Singapore’s data protection laws?

A key challenge for organisations who want to use cloud services is to do so in a way that is compliant with the organisations’ obligations under data protection laws.

This guest post by Matt Hunter (@matthew1hunter) and Daniel Jung explains how ISO 27018 is relevant and why companies considering cloud solutions should look to cloud providers who meet this standard.

Around the world, companies are coming under increasing pressure to comply with data protection laws.  Singapore is no different.  In July 2014, Singapore’s Personal Data Protection Act (PDPA) came into force.  Will the new international standard, ISO 27018, help customers in Singapore to overcome the data protection challenge when using cloud services?  Our conclusion is yes.  If a cloud customer engages a cloud service provider (CSP) that complies with ISO 27018, the cloud customer can be confident that the CSP’s cloud solution will help the cloud customer to comply its key legal obligations under the PDPA relevant to the use of cloud services.  Similarly, if a CSP complies with ISO 27018, the CSP can be confident that it can offer a cloud solution that will help its customer comply with its key legal obligations under the PDPA.

Background

The PDPA places obligations on companies when it comes to the collection, use and disclosure of personal data.  One of the consequences of the PDPA is that companies in Singapore who want to engage the services of a CSP must consider how the cloud solutions will comply with the relevant obligations under the PDPA.  Similarly, CSPs who want to offer cloud solutions to customers in Singapore must consider how their cloud solutions will comply with the relevant obligations under the PDPA.

In August 2014 the International Organization for Standardization (ISO) published a new standard specifically applying to how CSPs protect and managed data on behalf of their customers. “ISO/IEC 27018 – Information technology – Security techniques – Code of practice for protection of personally identifiable information (PII) in public clouds acting as PII processors” (widely known as ISO 27018).  One of the main intentions of ISO 27018 is to help public CSPs to comply with applicable obligations when holding personal data for their cloud customers.

So, how do the key legal obligations in the PDPA compare to the requirements of ISO 27018?  Can ISO 27018 help cloud customers and CSPs alike to ensure compliance with PDPA requirements?  In this blog we compare the key legal obligations in the PDPA relevant to the use of cloud services to the requirements in ISO 27018 and look at the practical steps that cloud customers and CSPs can take to ensure compliance.

How do ISO 27018 and the PDPA compare?

  • Consent and Purpose.

PDPA requirement: An organisation must obtain the consent of an individual in order to process personal data about the individual.

Does ISO 27018 help? Yes. ISO 27018 will help the customer to comply with this obligation because it requires the CSP to process personal data in accordance with the customer’s instructions and prohibits processing for any other purposes.  This requirement will help the customer because it will provide assurance to the customer the CPS will not use its personal data for purposes that are inconsistent with the consent the customer has obtained from individuals.

  • Notification.

PDPA requirement: An organisation must notify individuals about the purposes for which their data will be processed.

Does ISO 27018 help? Yes. ISO 27018 will help the customer to comply with this obligation because it requires the CSP to process personal data in accordance with the customer’s instructions and it requires the CSP to disclose information about sub-processors and data location to the customer.  These requirements will help the customer because it will provide assurance to the customer the CPS will not use its personal data for purposes that have not been notified to individuals and the customer can provide extra information in its notice to individuals about sub-processors and locations of processing.

  • Data retention.

PDPA requirement: An organisation must cease to retain personal data as soon as the purpose for which the personal data was collected is no longer being served by the retention of the personal data.

Does ISO 27018 help? Yes. ISO 27018 will help the customer to comply with this obligation because it requires the CSP to implement a policy under which the CSP ensures that personal data is erased as soon as it is no longer necessary for the specific purposes of the customer.

  • Data subjects’ right of access and correction.

PDPA requirement: An organisation must, upon the request of an individual, provide the individual with access to the personal data that an organisation holds about the individual and correct the personal data.

Does ISO 27018 help? Yes. ISO 27018 will help the customer to comply with this obligation because it requires the CSP to assist its customer to comply with a data subject’s access requests and correction requests.

  • Security.

PDPA requirement: An organisation must make reasonable security arrangements to prevent unauthorised access, collection, use, disclosure, copying, modification, disposal or similar risks.

Does ISO 27018 help? Yes. ISO 27018 will help the customer to comply with this obligation because it requires the CSP to take certain types of security measures, to adopt and implement security awareness policies and to subject their services to independent information security reviews at regular intervals.

  •  Sub-contracting. 

PDPA requirement: An organisation has the same obligations in respect of personal data processed on its behalf and for its purposes by a third-party, as if the personal data is processed by the organisation itself.

Does ISO 27018 help? Yes. ISO 27018 will help the customer to comply with this obligation because it requires a contract to be executed between the data controller (the customer) and the data processor (the CSP), that contains minimum security arrangements and an obligation to process data in accordance with the data controller’s requirements. Further, it also requires the CSP to seek consent from the customer before engaging any sub-contractors.

  • International transfer restrictions.  

PDPA requirement: An organisation must not transfer personal data outside of Singapore unless the transfer is made in accordance with the requirements of the PDPA to ensure that the organisation provides a standard of protection to the personal data so transferred that is comparable to the protection under the PDPA.

Does ISO 27018 help? Yes. ISO 27018 will help the customer to comply with this obligation because it requires the CSP to specify and document the countries in which the personal data may be processed and, no matter where the personal data is located, all of the other requirements in ISO 27018 will apply to the Personal Data, so the customer can be sure that its personal data will be protected to the same standard of protection.

  • Policies and procedures. 

PDPA requirement: An organisation must implement policies and procedures in order to meet their obligations under the PDPA and shall make information about its policies and procedures publicly available.

Does ISO 27018 help? Yes. ISO 27018 will help the customer to comply with this obligation because it requires the CSP to execute a contract with the customer to ensure that data is processed in accordance with the customer’s instructions (including instructions as to policies and procedures that are adopted by the customer).

Put simply, the comparison shows that the key legal obligations are matched by the standard’s requirements.

What about other countries?

The same conclusion appears to us to apply in other countries as well.  The PDPA is similar to the data protection laws in many other countries, including Australia, European countries, Hong Kong, Japan, Korea, Malaysia and New Zealand.  If a cloud customer in any of these countries engages a CSP who complies with ISO 27018, the cloud customer can be confident that the CSP’s cloud solution will help the cloud customer to comply its key legal obligations under the data protection laws in its country.

How can a CSP demonstrate compliance with ISO 27018?

There are a few options:

  1. A CSP can contractually commit to comply with ISO 27018.  This will show a commitment to comply but it does not demonstrate compliance.
  2. A CSP can consider third party certification against ISO 27018. This can currently only be done through a  ISO 27001 certification that incorporates, as part of the controls that the CSP is being certified against, the controls in ISO 27018.
  3. A CSP can do a compliance self-audit against ISO 27018.  There are also good arguments that a self-audit by a provider under ISO 27018 is accepted as proof of compliance with technical and organisational measures (as required, for example, under EU law for data processing agreements).
  4. Certification against a standard that includes ISO 27018.  In November 2013, the Infocomm Development Authority of Singapore (IDA) launched a Multi-Tiered Cloud Security Standard (MTCS) in order to encourage CSPs to implement strong risk management and security practices through certification.  This standard is currently being updated by the IDA.  It would be sensible (and beneficial to customers and CSPs) if the IDA included by reference ISO 27018 or included equivalent requirements in any revised MTCS.  This would mean that a CSP that is MTCS certified, would also be ISO 27018 certified.

Conclusion

There is no silver bullet to ensure overall compliance with an organisation’s obligations under privacy laws. However, in relation to cloud solutions, ISO 27018 is a welcome step towards ensuring that such cloud solutions are compliant with relevant privacy law obligations, including those in Singapore’s PDPA, and thereby further boosting customer confidence in cloud solutions.  Customers should check that their CSPs (existing or potential) comply with ISO 27018.  This will help customers to be confident that the cloud solutions (existing or potential) comply with the relevant obligations under the PDPA (or the relevant laws in other countries).  CSPs should demonstrate compliance with ISO 27018 in order to be confident that their cloud solutions will help their customers to comply with the relevant obligations under the PDPA (or the relevant laws in other countries).

 

Posted in ASEAN, Cloud computing, Data protection, Outsourcing, Regulatory action, Services, Singapore, Software, Technology | Tagged | 2 Comments