I recently saw a post from a blog on a corporate web site from a company called Cloud compliance, entitled “Compliance is the New Security Standard“.

Cloud Compliance provides a SaaS-based identity and Access Assessment (IdAA) solution that helps identify and remediate access control and entitlement policy violations. We combine the economies of cloud computing with fundamental performance management principles to provide easy, low cost analysis of access rights to prevent audit findings (sic) and ensure compliance with regulations such as SOX, GLBA, PCI DSS, HIPAA and NERC.

The basic thesis of the blog post was that since companies have to spend money on compliance anyhow, they might as well spend the money once and rename the effort “security”.   This is an interesting notion – although perhaps “placebo security” might be a cheaper approach.
Compliance is not equivalent to security  for several fundamental reasons.  Let’s examine this curious notion, using  PCI DSS 1.2 as a generic example of a regulatory compliance standard that is used to protect payment card numbers:
A. Filling out a form or having an auditor check off a list is not logically equivalent to installing and validating security countermeasures. A threat modeling exercise is stronger than filling out a form or auditing controls – it’s significant that threat modeling is not even mentioned by PCI DSS, despite the ROI in think time.
B. Although PCI DSS 1.2 is better than previous versions – it still lags the curve of typical data security threats – which means that even if a business implements all the controls – they are probably still vulnerable.
C. PCI DSS was designed by the card associations – there is no way that any blanket standard will fit the needs of a particular business – anymore than a size 38 regular suit will fit a 5′ 7″ man who weighs 120 kg and wrestles professionally.
D. PCI DSS talks about controls with absolutely no  context of value at risk. A retailer selling diamond rings on-line, may self-comply as a Level 4 merchant but in fact have more value at risk than then the payment processor service provider he uses. (See my previous post on Small merchants at risk from fraudulent transactions )
E. PCI DSS strives to ensure continued compliance to their (albeit flawed) standard with quarterly (for Level 1) and yearly (for everyone else) audits.   The only problem with this is that a lot of things can happen in 3 months (and certainly in a year).   The automated scanning that many Level 2-4 merchants do is essentially worthless but more importantly – the threat scenarios shift quickly these days – especially when you take into account employees and contractors who as people are by definition, unpredictable.
F. Finally – PCI DSS is a standard for whom? It’s a standard to help the card associations protect their supply chain.   It is not a policy used by the management of a company in order to improve customer service and grow sales volume.
F. PCI DSS 1.2 mandates security controls for untrusted networks and external attacks.   The phrases “trusted insider” or “business partner” are not mentioned once in the standard. This is absurd, since a significant percentage of the customer data breaches in the past few years involved trusted insiders and business partners. A card processor can be 100 percent compliant but because they have a Mafia sleeper working in IT – they could be regularly leaking credit card numbers. This is not a theoretical threat.
To summarize:

• PCI DSS is a standard for the card associations not for your business nor for your customers.
• As a security standard it is better than none at all but leaves much to be desired because it is not oriented towards the business and consumer protection