Securing NorthPine Bank’s Data: How SQL Server 2022 Can Help

Introduction

NorthPine Bank, a fictitious yet representative financial institution, recognized the necessity to modernize its data infrastructure to safeguard sensitive customer information against emerging threats. The bank decided to migrate its operations to SQL Server 2022, leveraging its advanced security features to enhance data protection, ensure regulatory compliance, and maintain operational efficiency. This blog explores the specific security challenges faced by NorthPine Bank and details how SQL Server 2022 addresses these issues through its robust, built-in features.

Protecting Customer Data at Rest

The Challenge

NorthPine Bank handles a vast amount of sensitive customer data, including:

• Personally Identifiable Information (PII): Social Security numbers, addresses, phone numbers.
• Financial Data: Account numbers, balances, transaction histories.

The potential loss or theft of this data could result in significant financial loss, legal penalties, and damage to the bank’s reputation. Encrypting data at rest is crucial to ensure that even if physical storage media are compromised, the data remains unreadable to unauthorized parties. NorthPine needed a solution that provided strong encryption without impacting system performance or requiring changes to existing applications.

How SQL Server 2022 Helps: Transparent Data Encryption (TDE)

Transparent Data Encryption (TDE) in SQL Server 2022 encrypts database files at the page level. TDE encrypts the data and log files on disk and decrypts them in memory during read operations. This process is transparent to applications, meaning no changes are required in application code.

Key Features of TDE

• Real-Time I/O Encryption and Decryption: Ensures data is encrypted on disk and decrypted when read into memory.
• Minimal Performance Impact: Designed to have a negligible effect on database performance.
• Easy Implementation: Can be enabled on existing databases without modifying applications.

Implementation at NorthPine Bank

To implement TDE, NorthPine Bank followed these steps:

1. Create a Master Key and Certificate in the Master Database

   The master key is used to encrypt the certificate, which in turn secures the database encryption key.

   -- Create a master key in the master database
   USE master;
   GO
   CREATE MASTER KEY ENCRYPTION BY PASSWORD = 'YourKeyPassword';
   GO
   
   -- Create a certificate protected by the master key
   CREATE CERTIFICATE TDECert WITH SUBJECT = 'TDE Certificate for NorthPine Bank';
   GO

2. Create a Database Encryption Key and Enable Encryption on the User Database

   The database encryption key is used to encrypt the database.

   -- Switch to the user database
   USE NorthPineDB;
   GO
   
   -- Create the database encryption key
   CREATE DATABASE ENCRYPTION KEY
   WITH ALGORITHM = AES_256
   ENCRYPTION BY SERVER CERTIFICATE TDECert;
   GO
   
   -- Enable Transparent Data Encryption on the database
   ALTER DATABASE NorthPineDB SET ENCRYPTION ON;
   GO

3. Back Up the Certificate and Private Key

   Backing up the certificate and private key is essential for restoring the database or in disaster recovery scenarios.

   -- Back up the certificate and private key
   USE master;
   GO
   BACKUP CERTIFICATE TDECert
      TO FILE = 'C:\Backup\TDECert.cer'
      WITH PRIVATE KEY (
         FILE = 'C:\Backup\TDECert_PrivateKey.pvk',
         ENCRYPTION BY PASSWORD = 'YourKeyPassword!'
      );
   GO

Benefits Achieved

• Data Protection: The database, including backups and transaction logs, is encrypted, securing data at rest.
• Compliance: Meets encryption requirements under regulations like PCI DSS and GDPR.
• Transparency: No need to alter existing applications or queries.

Preventing Unauthorized Access to Sensitive Data

The Challenge

With multiple teams and personnel accessing the database, controlling who can view sensitive data is critical. Even privileged users like database administrators should not have access to plaintext sensitive data to prevent insider threats. NorthPine needed a solution that ensures data remains encrypted throughout its lifecycle, including during query processing.

How SQL Server 2022 Helps: Always Encrypted with Secure Enclaves

Always Encrypted is a feature that protects sensitive data by allowing clients to encrypt data inside client applications and never revealing the encryption keys to the database engine. Secure enclaves in SQL Server 2022 enhance this feature by enabling rich computations on encrypted data within a secure, isolated part of the server’s memory.

Key Features

• Client-Side Encryption: Data is encrypted and decrypted on the client side using column encryption keys.
• Secure Enclaves: Enable server-side computations on encrypted data without exposing plaintext data to the SQL Server instance.
• Enhanced Security: Prevents even high-privileged users from accessing sensitive data in plaintext.

Implementation at NorthPine Bank

1. Set Up Column Master Key (CMK) and Column Encryption Key (CEK)

   The CMK is stored in a trusted key store (e.g., Windows Certificate Store), and the CEK is used to encrypt column data.

   -- Create Column Master Key Metadata
   CREATE COLUMN MASTER KEY MyCMK
   WITH (
      KEY_STORE_PROVIDER_NAME = 'MSSQL_CERTIFICATE_STORE',
      KEY_PATH = 'CurrentUser/My/YourCMKCertificateThumbprint'
   );
   GO
   
   -- Create Column Encryption Key
   CREATE COLUMN ENCRYPTION KEY MyCEK
   WITH VALUES (
      COLUMN_MASTER_KEY = MyCMK,
      ALGORITHM = 'RSA_OAEP',
      ENCRYPTED_VALUE = 0x... -- Encrypted CEK value obtained from encryption process
   );
   GO

2. Encrypt Sensitive Columns

   For example, encrypting the SSN column in the Customers table:

   -- Alter the column to be encrypted
   ALTER TABLE Customers
   ALTER COLUMN SSN NVARCHAR(11) COLLATE Latin1_General_BIN2
   ENCRYPTED WITH (
      COLUMN_ENCRYPTION_KEY = MyCEK,
      ENCRYPTION_TYPE = Deterministic,
      ALGORITHM = 'AEAD_AES_256_CBC_HMAC_SHA_256'
   ) NULL; -- Include NULL if the column allows NULL values
   GO

3. Configure Client Applications

   Applications accessing the encrypted columns need to use an updated version of the client drivers (e.g., ADO.NET) that support Always Encrypted and secure enclaves. Additionally, the application connection string should have the Column Encryption Setting=Enabled parameter.

Benefits Achieved

• Data Confidentiality: Ensures sensitive data is never seen in plaintext by the database engine or unauthorized users.
• Compliance: Helps meet strict data protection regulations by enforcing data access policies.
• Operational Transparency: Minimal changes required in application code when using compatible client drivers.

Maintaining Regulatory Compliance

The Challenge

NorthPine Bank must comply with regulations such as GDPR, PCI DSS, and SOX, which require strict data governance, access controls, and auditing capabilities. They needed tools to automate the identification of sensitive data, enforce security policies, and provide comprehensive audit trails.

How SQL Server 2022 Helps: Advanced Auditing and Data Classification

Dynamic Data Classification (DDC)

DDC helps discover, classify, label, and protect sensitive data within the database.

• Automatic Discovery: Identifies columns containing potentially sensitive data.
• Labeling: Applies sensitivity labels (e.g., Confidential, Highly Confidential) and information types.
• Integration: Works with auditing and monitoring features to track access to sensitive data.

SQL Server Audit

SQL Server Audit provides a powerful auditing capability that enables tracking and logging of events at the server and database levels.

• Customizable Audit Actions: Specify which actions and events to audit.
• Compliance Reporting: Generate detailed audit logs required for regulatory compliance.

Implementation at NorthPine Bank

1. Implement Dynamic Data Classification

   NorthPine used DDC to classify sensitive columns:

   -- Add sensitivity classification to a column
   ADD SENSITIVITY CLASSIFICATION TO
      [dbo].[Customers].[CreditCardNumber]
   WITH (LABEL = 'Highly Confidential', INFORMATION_TYPE = 'Financial');
   GO

   Alternatively, this can be managed through SQL Server Management Studio’s Data Discovery & Classification feature.




2. Set Up SQL Server Audit

   -- Create a server audit
   USE master;
   GO
   CREATE SERVER AUDIT ComplianceServerAudit
   TO FILE (FILEPATH = 'C:\AuditLogs\', MAXSIZE = 100 MB);
   GO
   
   -- Enable the server audit
   ALTER SERVER AUDIT ComplianceServerAudit WITH (STATE = ON);
   GO
   
   -- Create a database audit specification
   USE NorthPineDB;
   GO
   CREATE DATABASE AUDIT SPECIFICATION ComplianceDBAuditSpec
   FOR SERVER AUDIT ComplianceServerAudit
   ADD (SELECT ON SCHEMA::dbo BY PUBLIC),
   ADD (UPDATE ON SCHEMA::dbo BY PUBLIC),
   ADD (INSERT ON SCHEMA::dbo BY PUBLIC),
   ADD (DELETE ON SCHEMA::dbo BY PUBLIC);
   GO
   
   -- Enable the database audit specification
   ALTER DATABASE AUDIT SPECIFICATION ComplianceDBAuditSpec WITH (STATE = ON);
   GO

3. Monitor and Report

   Regularly review audit logs and use built-in reports or SQL queries to analyze audit data.

Benefits Achieved

• Enhanced Data Governance: Automated data classification aids in understanding and managing sensitive data.
• Comprehensive Auditing: Detailed logs of database activities support forensic analysis and compliance reporting.
• Regulatory Compliance: Simplifies adherence to legal requirements and reduces the risk of non-compliance penalties.

Protecting Against Data Breaches

The Challenge

Acknowledging that no system is entirely immune to attacks, NorthPine Bank sought to minimize the impact of potential data breaches. Early detection of anomalous activities and limiting exposure of sensitive data were essential components of their security strategy.

How SQL Server 2022 Helps: Advanced Threat Protection and Dynamic Data Masking

Advanced Threat Protection (ATP)

ATP provides:

• Anomaly Detection: Identifies unusual database activities that could indicate a security threat.
• Real-Time Alerts: Sends immediate notifications when suspicious events occur.
• Actionable Insights: Offers recommendations for mitigating detected threats.

Dynamic Data Masking (DDM)

DDM limits sensitive data exposure by masking it to non-privileged users.

• Real-Time Data Masking: Masks data returned by queries based on user privileges.
• Customizable Masking Functions: Supports various masking formats (e.g., default, email, partial).

Implementation at NorthPine Bank

1. Enable Advanced Threat Protection

   ATP is configured through the Azure portal for Azure SQL Databases. For on-premises SQL Server instances, NorthPine can integrate with Microsoft Defender for SQL to enable similar threat detection capabilities.




2. Implement Dynamic Data Masking

   For example, masking the SSN and Email columns:

   -- Mask SSN to show only last four digits
   ALTER TABLE Customers
   ALTER COLUMN SSN ADD MASKED WITH (FUNCTION = 'partial(0,"XXX-XX-",4)');
   GO
   
   -- Mask Email to show only the first character and domain
   ALTER TABLE Customers
   ALTER COLUMN Email ADD MASKED WITH (FUNCTION = 'email()');
   GO

3. Define User Roles and Permissions

   Assign users to roles based on their need to access sensitive data. Grant the UNMASK permission to roles that require access to unmasked data.

   -- Grant UNMASK permission to a specific user
   GRANT UNMASK TO [AuthorizedUser];
   GO

Benefits Achieved

• Proactive Threat Detection: Early identification of potential security breaches allows for swift response.
• Reduced Data Exposure: Limits the amount of sensitive data exposed to unauthorized users.
• Compliance Support: Helps fulfill data minimization principles under regulations like GDPR.

Protecting Data in the Cloud and On-Premises

The Challenge

Adopting a hybrid cloud model introduced complexity in maintaining consistent security policies across on-premises and cloud environments. NorthPine needed a unified approach to manage security for databases in both environments.

How SQL Server 2022 Helps: Unified Security Management

Integration with Azure Defender for SQL

• Unified Threat Protection: Extends advanced threat protection capabilities to on-premises and cloud databases.
• Vulnerability Assessments: Identifies and helps remediate security misconfigurations and vulnerabilities.
• Centralized Monitoring: Provides a single interface for security alerts and recommendations.

Implementation at NorthPine Bank

1. Connect On-Premises SQL Servers to Azure Arc

   Install the Azure Arc-enabled SQL Server agent on the on-premises servers and register SQL Server instances with Azure Arc to manage them through Azure.




2. Enable Azure Defender for SQL

   Activate Azure Defender for SQL for both on-premises and cloud instances via the Azure portal. This provides advanced security features such as threat protection and vulnerability assessments across all environments.




3. Manage Security Policies

   Use Azure Policy to define and enforce security configurations across all SQL Server instances. Monitor compliance and remediate issues using Azure Security Center (now part of Microsoft Defender for Cloud).

Benefits Achieved

• Consistent Security Posture: Applies uniform security policies across all environments.
• Simplified Management: Centralized dashboard for monitoring and managing security.
• Scalability: Easily extends security controls as the infrastructure grows.

Conclusion: A Secure Foundation with SQL Server 2022

By leveraging the advanced security features of SQL Server 2022, NorthPine Bank established a robust data protection strategy that addresses the multifaceted challenges of modern financial operations. The implementation of Transparent Data Encryption, Always Encrypted with secure enclaves, advanced auditing, threat protection, and unified security management provided a comprehensive defense-in-depth approach.

Key Outcomes for NorthPine Bank:

• Enhanced Data Security: Sensitive data is protected at rest, in transit, and during processing.
• Regulatory Compliance: Simplified adherence to complex regulations, reducing legal risks.
• Operational Efficiency: Security features were integrated with minimal disruption to existing systems.
• Future-Ready Infrastructure: Preparedness for scaling operations and integrating emerging technologies.

As the financial industry continues to evolve, SQL Server 2022 equips institutions like NorthPine Bank with the necessary tools to protect their data assets, maintain customer trust, and adapt to future security challenges.

Microsoft Documentation References

• Transparent Data Encryption (TDE)
• Always Encrypted with Secure Enclaves
• Dynamic Data Classification
• SQL Server Audit
• Advanced Threat Protection
• Azure Defender for SQL