Cybercrime - Stealing in the Connected Age

©2016 – Treasury Alliance Group LLC – All Rights Reserved

Cybercrime – Stealing in the Connected Age

Treasury Alliance Group LLC www.treasuryalliance.com

January 28, 2016


Cybercrime – A Growing Threat

Source: Ponemon Institute, HP

2015 Cost of Cybercrime Study

Year over year net change in cybercrime


CYBERCRIME


Malware

•  21 million new malware samples in 3rd quarter of 2015 –  “Ransomware” is a growing problem –  75% are Trojans

•  33% of all PCs around the globe are now infected –  China 45% –  Turkey 43% –  Peru 41% –  Russia 38% –  Taiwan 38%

•  US is still the top hosting country of phishing-based Trojans and keyloggers – largely due to the number of websites and domains hosted in the US

Source: Anti-Phishing Work Group


Ransomware


Vector of Malware Installation

The Rule of 20

Source: U.S. Secret Service


Phishing

The creation and use of e-mails and websites designed to look like e-mails and websites of well-known legitimate businesses to deceive Internet users into disclosing their bank and financial account information or other personal data such as usernames and passwords


Phishing Illustrated


Key Tells


Phishing Attacks by Industry

Source: Anti-Phishing Work Group


Pharming

Phishing’s evil twin – If you won’t answer our email, we’ll get you to come to us!


Pharming Illustrated

92.100.01.01

98.155.01.01

98.155.01.01

www.nicebank.com


BYOD – A Growing Issue

Source: Tech Pro Research


An Increasingly Mobile Universe

•  Potential rise of infested mobile apps. Don’t rely on mobile vendors’ app vetting processes. Do your corporate diligence. Installing an app on your phone may expose access to ALL of your phone data and ongoing activities, including contact books, email, login information, browsing history, GPS location history, security codes that you enter for conference calls, etc.

•  Onset of bring-your-own-device cultures. The mobile revolution has partly

benefited corporate mobile costs by inviting privately chosen devices into corporate networks. However, this poses security risks stemming not only from the nature of mobile, but also from the scope of devices on the network. Hardware and software have known and lurking vulnerabilities. More variety creates more exposure.

•  Mobile vulnerabilities are multi-dimensional. Phones with data access to the

corporate network can expose data, network authentication information, network application access, remote sessions, browsing data, and even DNS information. These exploits can be escalated to the land-based network.


Smishing and Vishing

•  The rise of mobile creates new channels for the same old tricks.

•  Sending you a fake SMS alert (Smishing) or voice mail (Vishing) to create panic, so that you reveal useful security information.

•  Objective is to confirm authenticity of your mobile information (i.e.. the target phone is actually yours) and to encourage a subversive action by you.

•  Example: “Your account has been compromised. Immediately call 1-800-IAM-FAKE to help us investigate this security breach. Alternatively, immediately log in with your normal bank account user name and password at www.authenticbank.fakesecurity.com.”


•  Corporate version of ID Theft •  Mimics internal fraud •  Funds are often gone before you are aware

there is a problem •  “Mules”, who often think they are doing

legitimate business, are used to move the money out of the country

•  Originally aimed at large companies but now cybercrooks are targeting smaller businesses, municipalities and non-profits

Corporate Account Takeover


COST OF CYBERCRIME


What are Cybercriminals After?

•  Usernames and passwords, obviously, but there’s MUCH more

•  Information about the hardware and software you are running:

•  Trade secrets and trade data – corporate espionage •  Personally Identifiable Information

–  Social Security Number –  Drivers License Number –  Card Numbers –  Bank Account Numbers –  Etc. etc.


Data Breaches

953

1241

3220

2345

3014

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2010 2011 2012 2013 2014 0

200

400

600

800

1,000

1,200

Inci

dent

s

Rec

ords

Exp

osed

Mill

ions

Incidents

Records


True Cost

•  Remediation •  Legal costs •  Regulatory costs and fines •  Loss of customers •  Reputation


Total Cost

Source: Ponemon Institute, HP 2015 Cost of Cybercrime Study

Cost expressed in US dollars (000,000), n = 252 separate companies


BEST PRACTICES


Best Practices

•  Educate your staff •  Use pop-up blockers and anti-virus software and maintain

them! •  Never respond to emails or pop-ups asking for personal

(corporate) info •  Be suspicious of unknown or unexpected emails •  Never open email attachments unless you already know

what’s in them •  Lock unattended workstations •  Use limited purpose workstations for financial transactions •  Cyber risk policy and action plan •  Insurance •  Report suspicious activity


Better to do it now … before you have a problem!

Improve Your Authentication

•  Don’t use the same password for different login levels.

•  Change your passwords regularly. •  Use complex passwords, even if not enforced. •  Consider using encrypted password “vaults” or

managers to store and machine-enter authentication strings.

•  Be aware of symptoms of key-logging.


Password Vaults

•  Store passwords •  Create strong passwords •  Device agnostic / cross-platform capabilities •  Single password for access


•  Incident Response Plan –  Specify the response team –  Notification channels –  Escalation Procedures –  Identify regulatory requirements –  Don’t forget PR –  Test at least annually

•  Data Privacy Policy –  Identify access to all PII and related information –  Specify security policies and procedures –  Review vendor agreements and processes –  Board level approval

Cyber Risk Management Plan


CYBER LIABILITY

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Cyber Insurance

•  First Party –  Notification –  Credit Monitoring –  Business Interruption –  Extortion –  Crises Management/PR

•  Third Party –  Invasion of Privacy Rights –  Media Intellectual Property –  Failure to implement, maintain or enforce reasonable security

policies –  Unfair, Deceptive and unlawful business practices –  Regulatory Actions

Source: Oswald Insurance


•  First Party Coverages (Losses/expenses incurred by insured)

•  Event Management Expense: Coverage for notification costs, credit monitoring/restoration services, legal assistance, forensic investigation costs, and costs to hire PR firm to minimize harm

•  Cyber Extortion: Costs incurred to investigate and terminate an extortion threat to commit an intentional computer attack against the insured

•  Information Asset: Covers replacement costs as a result of damage to or theft of insured’s information assets due to a covered computer attack (Data Restoration)

•  Business Interruption: Coverage for loss (costs and lost income) in the wake of a computer attack that interrupts or suspends your business

First Party Privacy Insurance Coverage


•  Third Party Liability (Economic damages suffered by others)

•  Network Security Liability: Coverage for damages and defense costs resulting from breaches in network security; i.e. computer virus, unauthorized access, denial-of service, identity theft

•  Privacy Liability: Coverage for failure to protect or wrongful disclosure of PI or PHI, whether or not due to failure of network security

•  Privacy Regulatory Proceeding Coverage: Covers costs resulting from civil, administrative or regulatory proceedings alleging violation of privacy laws

•  Electronic (Website) Media Liability Coverage: Coverage for content-based injuries such as libel, slander, defamation, copyright

Third Party Privacy Insurance Coverage


OOPS

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When It Happens

And it will happen! •  Notify - Notify your bank immediately and

consider suspending funds transfer capabilities until you know the scope of the problem.

•  Report - Contact appropriate law enforcement and file a report.

•  Record - Make a written record of what happened, what was lost, and the steps you took to report the incident and attempt to recover the funds involved.


CONCLUSIONS


Conclusions

•  Cybercrime is a growing problem around the world •  Convenience of easy access complicates the

problem •  The total cost can be immense •  There are things that you should be doing to protect

yourself –  Policies and procedures –  Training –  Action plans –  Insurance –  Board involvement

•  Cybercrime is not just an IT issue, it should be part of your overall enterprise risk planning


Daniel L. Blumen, CTP, Partner

Phone (630) 717-9728 [email protected]

Mark K. Webster, CCM, CPA, Partner

Phone (216) 932-1678 [email protected]

Treasury Alliance Group LLC

www.treasuryalliance.com

Contact Information

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Cybercrime - Stealing in the Connected Age

Economy & Finance

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