Security breaches can cost organizations millions of dollars, and those costs could be followed by lawsuits, insurance claims, and hefty fines. Just as important are the devastating effects on company reputation and customer trust that could extend far into the future. A 2008 study by the Ponemon Institute, which researches information security policy and data protection, found that after a breach of credit card data businesses lose 31% of their customers.

As hackers continually find new and more sophisticated ways to steal sensitive data, it becomes imperative to protect unsuspecting clients – and a company’s image - by fully complying with security standards to prevent future attacks.

Although the PCI Data Security Standard (PCI DSS) was designed to specifically protect credit card information, it is increasingly becoming the security “bible” for all companies because of its thorough and rigorous approach.

The PCI (payment card industry) standard is a set of specific requirements that help companies build and maintain a secure network, protect data and test networks. PCI covers everything from prevention and detection to responses for security incidents. The PCI Data Security Standard is not a law; it is a self-regulated global standard developed by the major credit card companies and applies to all merchants using credit or debit cards.

Even those companies that are required to observe other federal-mandated standards - the Health Insurance Portability and Accountability Act (HIPAA) for health data, the Gramm-Leach-Bliley Act (GLB) for financial institutions, and the Sarbanes Oxley Act (SOX) for accounting practices – can benefit from PCI DSS’s comprehensive nature.

Assume, for instance, that Company A provides healthcare software to a variety of clients and follows the PCI DSS,  which spells out – in 220 steps – the requirements for procedures and policies, security management, software designs and other critical measures needed to protect all facets of electronic data, including data in transit and at rest.

Because of the healthcare connection, Company A would also be required to follow HIPAA rules. HIPAA is not as detailed as PCI DSS about the specific technical controls that should be implemented. HIPAA instead relies upon each covered entity to determine, through a risk management process, the controls that are necessary to adequately protect stored health information.

It is likely that if Company A follows the PCI DSS, it also will be in compliance with HIPAA regulations, because it has covered its security bases by following the more demanding PCI requirements.

Unlike HIPAA, which does not provide a framework for electronic data storage protection, PCI DSS  delivers equitable protection for all types of sensitive data.

PCI DSS is not a substitute for other compliance standards, but the well-defined and pervasive set of technological controls can be used to quickly adopt a reasonable security standard. Companies should be familiar with state and local requirements concerning specific standards – such as HIPAA - to ensure full compliance.

PCI DSS is also a useful tool when determining a service organization’s security strength. For instance, companies vetting outsourced cloud computing providers should request a copy of their Report on Compliance (Roc) for PCI.  If the data center has passed a PCI audit, it's a good indication that their security procedures are up to snuff. 

There are other factors to consider, as well.  Companies may have been compliant three months ago, but today are vulnerable to a breach because they haven’t maintained networks or policies, or loaded patches to fend off ever-evolving risks.

To ensure a company is serious about security, user organizations should ask the service company to prove that all areas of its operations are PCI DSS compliant and that it has continued to be compliant over successive years. The company should have obtained an in-depth audit and received an updated Statement on Auditing Standards No. 70 (SAS 70) detailing the independent auditor’s findings. Effective June 15 of this year, the Statement on Standards for Attestation Engagements (SSAE) No. 16 replaces SAS 70 as the standard for reporting on service organizations.

The PCI standard divides merchants into four different levels based on the transactions they generate. While the largest merchants are required to obtain audits, smaller companies are required to submit self-assessments that are similar to onsite audits.

These, and other requirements, are certified by the PCI Security Standards Council, the body governing the PCI standard. While the requirements may seem overwhelming, especially for smaller companies, the council and other companies offer tools and assistance for compliance so that merchants everywhere can become fully compliant.