FIPS Compliance: A Practical Guide for Your Organization

This article will explain the significance of FIPS, both for federal agencies and private organizations.

Published on February 14, 2025

FIPS Compliance: A Practical Guide for Your Organization

FIPS, or Federal Information Processing Standards, are essential guidelines by the National Institute of Standards and Technology (NIST) to protect sensitive data. Developed initially to establish minimum requirements in sensitive government applications, such as government hospitals, they provide a rigorous and reliable framework that can be applied to sensitive data in any application or industry. If you’re wondering what FIPS is and why it’s important, this article will explain its significance both for federal agencies and private organizations. You’ll also learn steps to achieve FIPS compliance and how it applies across different sectors.

FIPS compliance has been continuously redefined since it was introduced. The currently accepted FIPS standard is FIPS 140-2. In September of 2026, FIPS 140-2 validations will no longer be active and FIPS 140-3 will be required. Ezurio's FIPS validated cryptographic module is compliant to FIPS 140-2 level 1, with a roadmap to FIPS 140-3 compliance. Learn more about our FIPS offerings within the Summit Suite here.

Key Takeaways

FIPS ensures data security in federal applications and is increasingly adopted by private organizations for enhanced trust and data protection.
FIPS 140-2 outlines stringent requirements for cryptographic modules, classified into four security levels, with compliance essential for safeguarding sensitive data in various sectors.
Achieving FIPS compliance entails rigorous testing and validation of defined cryptographic modules, often requiring significant time and investment, but enhances overall security posture and minimizes IT risks.

Understanding FIPS and Its Importance

Federal Information Processing Standards (FIPS) are a set of guidelines developed by the National Institute of Standards and Technology (NIST) to ensure the security of data within federal government operations. While initially designed for federal use, FIPS has found significant relevance in heavily regulated industries, including healthcare, financial services, and manufacturing. These standards are not just a bureaucratic requirement; they are pivotal in maintaining the integrity and confidentiality of sensitive information. Government contractors are likely to be required to demonstrate FIPS compliance.
Beyond federal agencies, many private sector organizations voluntarily adopt FIPS to bolster their data security measures. This adoption is a testament to the robustness of FIPS standards, offering a trusted framework that enhances the security posture of any organization. Implementing FIPS showcases an organization’s dedication to safeguarding sensitive data, enhancing trust and credibility among clients and stakeholders.

Overview of FIPS 140-2

FIPS 140-2 is a vital set of computer security standards that address the cybersecurity requirements for cryptographic modules used to protect sensitive data. This federal information processing standard is integral to ensuring that cryptographic solutions meet stringent security requirements when industry norms fall short. FIPS 140-2 addresses both data-at-rest and data-in-motion, safeguarding information from unauthorized access and potential breaches.
The standard classifies cryptographic modules into four levels of security, ranging from basic to highly stringent. For instance, the lowest Level 1 allows basic security features, whereas Level 3 necessitates unique user identities for authentication. The strictest level is Level 4, which is so stringent as to not only provide physical security but also mechanisms to provide a very high probability of detection if those critical security parameters are breached.
Approved algorithms, such as the Advanced Encryption Standard (AES) and Triple-DES, are fundamental to achieving FIPS 140-2 compliance, ensuring robust data protection.

The major components defined by FIPS standards are:

Approved algorithms for cryptography

Validation process for securing FIPs compliance

Role-based or identity-based authentication mechanisms for authorized device access

Physical security requirements to protect sensitive hardware

How To Secure Compliance: The Cryptographic Module Validation Program (CMVP)

The Cryptographic Module Validation Program (CMVP) is a collaborative initiative between NIST and the Communications Security Establishment (CSE) of Canada, designed to validate cryptographic modules used by federal agencies and contractors. This program ensures that cryptographic modules adhere to the stringent security requirements outlined in FIPS 140-2. Validation testing is conducted by laboratories accredited by the National Voluntary Laboratory Accreditation Program (NVLAP).

At security Level 2 and higher, cryptographic modules must undergo rigorous testing on the operating platform level including representative hardware configurations, such as Windows 10 and Windows Server operating systems.

This is the "how" of FIPS compliance. Once a manufacturer has established a FIPS plan, they'll need to work with an approved test laboratory to validate that plan. One way manufacturers can accelerate this process is to work with a pre-validated cryptographic module, such as those we supply as part of our Summit Suite Security Solutions.

Why Organizations Need to be FIPS Compliant

Federal government organizations, contractors, and service providers handling sensitive information are mandated to comply with FIPS. FIPS-compliant modules are critical for federal agencies, ensuring the confidentiality, integrity, and authenticity of government-related data. However, the benefits of FIPS compliance extend beyond regulatory requirements.

Organizations that achieve FIPS compliance often experience enhanced perceived security and trustworthiness among clients and stakeholders. This compliance also helps minimize information technology risks in a cost-effective manner, improving the organization’s overall security posture. FIPS 140-2 compliance is crucial for sectors like manufacturing, healthcare, financial services, and local governments.

FIPS compliance is globally recognized as a benchmark for secure cryptographic modules. By adhering to these standards, organizations can ensure their systems are robust against potential cyber threats, thereby safeguarding sensitive information and maintaining secure operations.

Understanding The FIPs Compliance Process

Achieving FIPS 140-2 compliance involves a series of steps guided by NIST and CSE.
The validation process can be time-consuming and financially demanding, often spanning up to a year and costing around $100,000. Despite the investment, this process is crucial for ensuring that cryptographic modules are robust and reliable.
Engaging with NVLAP-accredited laboratories for testing and validation is a critical component of becoming FIPS compliant. Only those accredited laboratories may certify a manufacturer's plan to the FIPS standards.

Approved Cryptographic Algorithms

Organizations must implement encryption solutions that utilize approved algorithms or security functions listed in FIPS 140-2 Annex A. This ensures that cryptographic methods meet the rigorous security requirements necessary for compliance and authorized data access.
Approved security functions defined in FIPS 140-2 Annex A include:
AES and TDEA Symmetric Key Encryption and Decryption
DSA, RSA, and ECDSA Digital Signatures
Secure Hash Standard (HSH)
SHA-3 Standard
Triple-DES, AES, and HMAC Message Authentication

Role-Based vs. Identity-Based Authentication

Authentication mechanisms are essential for preventing unauthorized access to sensitive information. Role-based authentication grants access based on predefined roles, with permissions assigned to these roles. Users gain access indirectly by assuming roles, making it efficient for managing group permissions.
However, identity-based authentication is generally considered more secure, as it allows for unique credentials per user, ensuring higher security levels. While role-based authentication is suitable for environments with multiple users requiring similar access levels, identity authentication provides a personalized approach, enhancing security by assigning unique credentials to each user.

Physical Security Requirements

FIPS 140-2 specifies physical security requirements for cryptographic key management, user authentication, and overall data security. At Security Level 2, tamper-evident coatings or seals are mandatory to detect unauthorized access to cryptographic keys. These features ensure that any attempt to access critical security parameters is evident, thereby protecting sensitive information.
Security Level 2 also mandates the use of pick-resistant locks on removable covers or doors of cryptographic modules. As the security levels increase, the physical security mechanisms become more stringent.
Security Level 3, for example, incorporates mechanisms to detect and respond to unauthorized access attempts, providing enhanced protection. At the highest level, Security Level 4, comprehensive protection against all unauthorized physical access attempts is required.

Self Tests and System Integrity

FIPS 140-2 mandates that cryptographic modules perform known answer tests (KATs) to verify the output of approved cryptographic algorithms. These self-tests are crucial for ensuring the correct functioning of cryptographic methods. Power-on self-tests are executed each time a cryptographic module is powered on, verifying the success of the system before any cryptography is performed.
Conditional self-tests check the integrity of digitally signed software packages and verify the generation of random numbers. For example, if a known answer test fails, the system enters a critical error state, disabling further cryptographic actions and logging the failure. This ensures that any issues are promptly addressed, maintaining the system’s overall reliability.

Common Criteria vs FIPS

Common Criteria and FIPS are distinct but complementary standards in information security. Common Criteria is a set of definitions that focuses on assessing security features in IT products, while FIPS 140 specifically validates cryptography and data security. The NIST Information Technology Laboratory and the National Information Assurance Partnership (NIAP) collaborate to align these standards, reducing duplication between evaluations.
To put it another way: FIPS may be a part of an overall Common Criteria evaluation, but the two are not equivalent. FIPS may be a subset of a broader evaluation.
Protection Profiles (PPs) define cryptographic assurance activities that support both Common Criteria and FIPS validation. The development and approval of FIPS are governed by the Information Technology Management Reform Act of 1996 and the Computer Security Act of 1987. This joint effort ensures that cryptographic standards are robust and applicable across various sectors.

Summary

In summary, FIPS compliance is crucial for ensuring the security of sensitive data. From understanding the importance of FIPS to implementing practical steps to be FIPS compliant, this guide provides a comprehensive overview. By adhering to FIPS 140-2, organizations can enhance their security posture and gain trust among clients and stakeholders.
Achieving FIPS compliance requires a commitment to rigorous standards and continuous improvement. By following the outlined steps and leveraging validated cryptographic modules, organizations can protect their data and maintain high levels of security.

Frequently Asked Questions

What is FIPS compliance?

FIPS compliance involves demonstrating security requirements for cryptographic processes on a device. Manufacturers must follow the guidelines established by NIST to maintain data security, particularly within federal and regulated sectors. This adherence is crucial for safeguarding sensitive information. It's a requirement in many US federal applications, and a best-practice to be observed in other applications and industries as well.

Why is FIPS 140-2 important?

FIPS 140-2 is important because it establishes standards for cryptographic modules, ensuring the confidentiality and authenticity of sensitive data. Compliance with these standards is essential for safeguarding information in various applications. Very sensitive data is best served by validating your solution to be FIPS compliant.

How long does it take to secure FIPS 140-2 validation?

FIPS 140-2 validation can take up to a year and may cost around $100,000, making it a significant investment for ensuring the reliability of cryptographic modules. The easiest way for manufacturers to achieve FIPS compliance is to leverage a partner's FIPS-validated modules, such as those provided by Ezurio.

What is the difference between role-based and identity-based authentication?

The primary difference is that role-based authentication provides access based on predefined roles, whereas identity-based authentication relies on unique user credentials for enhanced security. Therefore, the latter is generally considered more secure.