IBM Software Group Introduction IBM Tivoli Privacy Manager

IBM Software Group | Tivoli software Agenda § Why Privacy Matters § Safeguarding Personal Information • Rise of e-business • Privacy Enforcement • HIPAA Privacy Regulations • Privacy Value Proposition • Privacy Guidelines • The solution: IBM Tivoli Privacy Manager • How it works • How it can save money, lower risk and increase customer satisfaction § Summary 2 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Why Privacy Matters § e-business and e-government are on the rise § CRM and data mining technology allow businesses to compile and analyze more information about buying behavior, both of large groups and individual consumers § The spread of PII (Personal Identifying Information), handled by people with no stake in protecting your privacy § Information can be copied and distributed much more quickly and easily § Companies recognize the value of information sharing § Lower legal barriers to sharing customer data, especially in the financial industry § Customers want personalized marketing. . . but not too personal § New laws protect privacy more strictly 3 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Safeguarding Personal Information • • • • 4 Mailing lists Purchase records Customer correspondence Web browsing history Office memos e-mails / attachments Public records (business license requests, births and marriages, divorce filings, etc. ) Tax returns Bank statements Loans Insurance claims Medical records ERP / CRM data Clinical trial data Customers – ability to make changes or updates to their information? Employees – what information can they access, and how are they allowed to use it? Other Firms – what information do they have access to and how can they use it? Organizations – ability to incorporate individual’s choices into data access policies? Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Marketing Trends Yesterday Today Broad, large-scale marketing Narrow, highly targeted campaigns; difficult to measure impact with measurable impact Separate, disjointed customer interactions across business areas Shared history of customer contact Customer preferences captured many times, inconsistently and disparately Customer preferences captured once Uncoordinated, overlapping messages Triggered, integrated messaging Difficult to optimize sales force 5 Privacy Manager for e-business | Non-Confidential Opportunity management © 2003 IBM Corporation

IBM Software Group | Tivoli software How Information is Misused § Accidental/sloppy release § Inappropriate business use (violating patient confidentiality, spam, etc. ) § Internal abuse for non-business reasons (idle curiosity, mischief, stalking) § Identity theft/fraud 6 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Carelessness Leaves Data Unprotected 7 Privacy Manager for

IBM Software Group | Tivoli software July 6, 2002 Free Prozac in the Junk Mail Draws a Lawsuit By ADAM LIPTAK FORT LAUDERDALE, Fla. , July 3 — The unsolicited Prozac arrived in a hand-addressed manila envelope. It came from a Walgreen’s drugstore not far from here, and there was a "Dear Patient" form letter inside. The mailing infuriated one recipient, a 59 -year-old home caregiver who filed a class-action lawsuit this week in state court here. "They're going after me because I have a problem, " said the caregiver, who agreed to an interview in her lawyer's office here on the condition that her name be withheld. "It bothers me to think that somebody could get into my medical records and start sending me dangerous medications. “ The suit says Walgreen’s, a local hospital, three doctors and Eli Lilly, which makes Prozac, misused patients' medical records and invaded their privacy. It also accused the drugstore and Lilly of engaging in the unauthorized practice of medicine. The plaintiffs' lawyers said they did not know how many people received the mailings. "It could be anywhere from several dozen to several thousand, " said Gary M. Farmer Jr. , one of the lawyers. 8 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Even Public Records Aren’t Safe Posted on Thu, Jan. 16, 2003 Illegal snooping costs Allstate access to online DMV records By Deborah Lohse Mercury News California's Department of Motor Vehicles has banned Allstate Insurance from checking driver records online after Allstate employees were caught illegally snooping through records of friends, family and others. In one case, an Allstate employee released a confidential home address that enabled an unidentified road-rage driver to send a written threat to another driver. After that incident, the threatened driver complained to DMV, which investigated. It did not learn the identity of the Allstate employee who facilitated the threat, but DMV did find 131 violations of confidentiality rules such as those requiring people who access the data to have individual passwords and sign confidentiality papers. Allstate employees in seven claims offices violated the rules, sometimes by sharing computer passwords on Post-it notes, in other cases by making up fake car-claim numbers to get into friends' or family members' DMV records, officials said. ``The violations were so egregious here, without an ironclad agreement in our hands that it wouldn't happen again. . . we had to pull the plug, '' said DMV Director Steven Gourley. A privacy group applauded DMV's ban on Allstate. ``Companies that have access to these sensitive databases like DMV must have ironclad electronic-audit trail capabilities in order to monitor how their employees use these databases, '' said Beth Givens, director of the Privacy Rights Clearinghouse. ``Otherwise there will be all too much abuse caused by inquisitive employees, '' Givens added. 9 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Identity Theft Earns $2. 5 million 10 Privacy

IBM Software Group | Tivoli software Even the Military Can’t Guarantee Data Safety 11

IBM Software Group | Tivoli software Privacy Is Being Enforced! The Federal Trade Commission will ask every company the following questions: 1. Do you have a system in place that is appropriate to the sensitivity of the information you collect? 2. Did you follow your procedures? Reactions to Privacy Abuses §Consumer resentment §Government regulation to protect privacy and limit information sharing 12 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Key HIPAA Privacy Regulations § Individuals have a right to review and update protected health information and request amendments § When using protected health information, entities must limit use to only the minimum necessary § Individuals can authorize the use of protected health information for other purposes, agree to or reject certain disclosures § Individuals can obtain an accounting of disclosures of protected health information 13 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Implementing HIPAA Means… § Patient authorizations can restrict access by some users to certain data within HIPAA-impacted applications § Accounting must be maintained of data disclosures and individual rights requests of patients § Need mechanism to block access based on the role of the user, the context of the data element and the preferences of the individual 14 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software The Opportunity 15 § Increase revenue by improving customer loyalty § Lower cost of compliance by incorporating privacy rules into security infrastructure § Mitigate risk of inappropriately disclosing information Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Privacy Value Proposition Asset Competitive Advantage Marketing Communication Ex pe ns e Operational Controls 16 Regulatory Compliance Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Royal Bank Of Canada Puts A Value On Privacy By Rick Whiting, Information. Week Aug 19, 2002 URL: http: //www. informationweek. com/story/IWK 20020816 S 0008 What's privacy worth? To the Royal Bank of Canada, it's $630 million. The bank takes the position that giving customers the level of privacy they want is a competitive differentiator. "Information is really the currency of the relationship with our customers, and trust is a key part of that relationship, " says Peter Cullen, the bank's chief privacy officer. Each year, the bank surveys customers about the importance of branch services, customer service, and more than a dozen other items. It added privacy to the list about six years ago, and it ranks in the middle of what consumers consider valuable. Based on the survey results, the bank figures that privacy drives 7% of the demand for its products and services. That means privacy is worth 7% of the $9. 0 billion shareholder value of the bank's consumer business: $630 million. 17 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Security vs. Privacy Policies § Security ensures access control to resources: “Members of the marketing department will be given permission to query the accounting database. ” § Privacy addresses the relationship between an organization that collects information and the individual from whom the information was collected. § Business purpose is used as the framework for that relationship: § A privacy statement may be: “Members of the marketing department are permitted to see an individual’s credit score for the purpose of developing a new loan product only if the individual provides explicit authorization. ” 18 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software OECD Privacy Guidelines Principle of Openness Principle of Participation Principle of Disclosure Principle of Collection Limitations Principle of Use Limitations Principle of Accountability Principle of Verification Principle of Security 19 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Why Privacy Technology? § Policies are not business process-specific Set at a global level § Employees don’t always know privacy policies High training and compliance costs § To share data more effectively! Server consolidation, data warehousing, unified CRM or ERP infrastructure 20 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Won’t Security Technology Handle the Problem? There are existing privacy (security) technologies: § Anonymization and Infomediary Services § Encryption § Web site monitoring and checking 21 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Privacy vs. Security Protecting your IT infrastructure from external, unauthorized access is a security problem. 22 Privacy Manager for e-business | Non-Confidential Protecting your IT infrastructure from intentional or unintentional abuse of authorized access is a privacy problem. © 2003 IBM Corporation

IBM Software Group | Tivoli software Privacy vs. Traditional Access Control Data User Action Resource § Traditional Access Control Factors: • Data User (Sam from accounting, or a group, such as “Doctors”) • Action (read, write, delete, etc. ) • Resource (Web page, application) 23 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Data Subject Data User Data Subject Action Resource § Privacy Management considers the data subject: • Choices (e. g. opt in to marketing e-mail) • Attributes (Age >13, country of residence) • Other factors (Time of day, etc. ) 24 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Business Purpose Data Subject Data User Business Purpose Action Resource § Privacy Management authorizes “actions for a business purpose” • “Read for the purpose of fulfilling an order” • “Write for purpose of registering political party affiliation” • “Delete for purpose of removing from preferred physician list” 25 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Policy as a Relationship Data Subject Policy 2 Policy 1 Data User Data Subject § Traditional access control attaches “policy” to protected object (“access control lists”) § Privacy Management is an Agreement between Data Collector and Data Owner • Must be recorded on a per-data owner basis • Data subjects must provide authorization for any changes 26 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Authorization Why did you send me spam? Because you opted in to the marketing policy 1 on April 1, 2002. Data Subject Data User § In traditional access control, logging the access is enough § In privacy management, all actions involving personally identifiable information must be justified in terms of authorization 27 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software IBM Tivoli Privacy Manager “The mission of IBM Tivoli Privacy Manager is to enable enterprises to use the personally identifiable information they collect according to the OECD Privacy principles, and to monitor, enforce and report on their compliance to those principles. ” 28 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Privacy Manager’s Main Tasks 1. Define the privacy policy 2. Deploy the privacy policy 3. Record user consent to policy 4. Monitor/enforce access according to the policy that the user consented to 5. Create audit trail reports 29 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Identity Access Privacy Directory Integration Tivoli Privacy Manager Access Granted If: • Approved Business Purpose • Respects Privacy Preferences Privacy Manager Customer Data Medical Data Financial Data Employee Accesses Personal Information Personal Data Privacy Access Audit Trail 30 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software What Does Privacy Manager Do? Submits Personal Info. External User “Data Subject” 3 Privacy Manager Monitor e-business application 2 Records Consent to Policy Accesses Personal Info. ® data store Audits Compliance to Policy Privacy Manager® 31 Privacy Manager for e-business | Non-Confidential 4 5 1 Policy Editor Internal User “Data User” Report Generation © 2003 IBM Corporation

IBM Software Group | Tivoli software Sample Privacy Policy 32 Privacy Manager for e-business

IBM Software Group | Tivoli software Building the Rules in Privacy Manager 33 Privacy

IBM Software Group | Tivoli software Privacy and Access Control Web. Seal Firewall Privacy Manager Monitor Web Application Server ® Data Store Bob’s Address. “Can Alice look at Bob’s “Alice was given address? ” Db request: access to Bob’s “Get Bob’s address” Address” Bob’s Address 1. What privacy policy did Bob Web. Seal: Agree to? AMis. ID = Alice 2. “Alice Whichaccessed AM Groups Bob’s. Alice In? AMGroups Group = “Access the How do these for AM home address the Web. Seal: Marketing Dept. Customer relate toof Bob’s Privacy Policy? purpose marketing 1. “Who are you? ” 3. Portal” Does the privacy policy in. permit email, which Bob opted (authentication) http request: the you business purpose of the 2. “Can access “Get Bob’s this app? application? ” 4. What are Bob’s Address” opt-in/out (authorization) choices for the policy? Access Manager Policy Server 34 Privacy Manager for e-business | Non-Confidential Privacy Manager Policy Server © 2003 IBM Corporation

IBM Software Group | Tivoli software Sample Individual Access Report 35 Privacy Manager for

IBM Software Group | Tivoli software Privacy Manager Monitors § Monitors applications and their storage systems § Detects the submission of and access to data that has been tagged as Personally Identifiable Information § Monitored systems can be physical repositories (LDAP) or abstract (application and data) § Each monitor is customized for its storage system § Monitors can be deployed in 3 ways: • On a per-application basis • Through an application resource layer • As part of a workflow 36 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software More Privacy Manager Monitors § Placeholder for 3 slides promised in previous slide § Monitors can be deployed in 3 ways: • On a per-application basis • Through an application resource layer • As part of a workflow 37 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software User Spotlight: Identity-driven Control for Privacy Ernst & Young Need Solution Result • Assist clients by mapping privacy policies and practices into their e-business applications and infrastructure IBM Tivoli Privacy Manager • Pushes policy enforcement and auditing into enterprise applications • Automates many privacy compliance activities • Improves overall management of privacy policies and practices • Simplifies the collection and management of consent data “We have been hoping for solutions that allow a privacy officer to push the enforcement of policy into the enterprise applications. Privacy Manager provides that foundation. ” —Brian Tretick, Principal, Privacy Assurance and Advisory Service, Ernst & Young LLP 38 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Privacy Manager Benefits Feature Benefit IBM Tivoli Privacy Manager allows the Simplifies privacy management and enterprise to push privacy policy down to makes consistent across separate applications and IT infrastructure business units, IT infrastructures and applications Web-based tools for transforming written Decreases time and resources needed policies to digital format to put policies online 39 Application monitors that record privacy choices and uses of data Automated way of collecting privacy choices Restricts access to personal information at the application level, based on business purpose and individual preference Reduces time and effort needed to monitor privacy compliance; reduces risk of misuse and associated penalties; increases customer confidence Reporting tools Automatically generated audit trails of access to personal and confidential information Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software IBM Privacy Management Council § § 40 Established in 2001 Consists of existing and new customers and service integrators Is a forum for driving the use of privacy technologies in the enterprise Members: Fidelity Investments Blue Cross / Blue Shield Minnesota Travelers T. Rowe Price Marriott International Blue World Sharp Japan JP Morgan Chase (HK) Deloitte & Touche IBM Global Services IBM Office of the CIO Ernst & Young Health Insurance Commission Ahold USA State of Michigan Johnson & Johnson Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation

IBM Software Group | Tivoli software Summary § Consumer information can be extremely valuable in e-business • Personalized customer experience • Better customer service • Faster, less expensive transactions § Risks of information use • Overly intrusive marketing • Improper employee access • Theft, fraud and other crimes § Effective privacy practices § Traditional security and access control aren’t enough § Tivoli Privacy Manager 41 Privacy Manager for e-business | Non-Confidential © 2003 IBM Corporation