FinTechCyber Security & FraudRansomware attacks rise, as accidental breaches spark concern

Ransomware attacks rise, as accidental breaches spark concern

Accidental data breaches are causing almost as much concern as the steady rise in ransomware attacks, reports insurer Beazley.

Ransomware attacks continued their rise in the first six months of 2017, with Lloyd’s of London insurer Beazley reporting that its clients reported an increase of more than 50% in incidents over the first half of 2016.

In its Beazley Breach Insights report for H1 of 2017, the group says that hacking and malware attacks – of which ransomware attacks form a growing part – continue to be the leading cause of breaches, accounting for 32% of the 1,330 incidents that Beazley Breach Response (BBR) Services helped clients handle over the six-month period.

However, accidental breaches caused by employee error or data breached while controlled by third party suppliers continue to be a major problem, accounting for 30% of breaches overall, only slightly behind the level of hacking and malware attacks. In the healthcare sector accidental breaches represent, by a significant margin, the most common cause of loss at 42% of incidents.

“This continuing high level of accidental data breaches suggests that organisations are still failing to put in place the robust measures needed to safeguard client data and confidentiality,” the insurer comments.

“Since 2014, the number of accidental breaches reported to [our] team has shown no sign of diminishing. As more stringent regulatory environments become the norm, this failure to act puts organisations at greater risk of regulatory sanctions and financial penalties.”

In June, the BBR Services team worked closely with the insurer’s clients to provide legal and forensics services in response the international NotPetya ransomware attacks. “The ability to respond quickly to ransomware attacks is especially critical for healthcare organisations due to the [US] Office for Civil Rights (OCR) treating all ransomware attacks as a presumed breach.

2017 data breach trends

Beazley highlighted the following data breach trends evident in the first six months of 2017:

• Schoolyard errors
Unintended disclosures caused 26% of breaches in H1 2017 in the higher education sector. Although slightly down on the 28% recorded in H1 2016, this still represents a quarter of all breaches which could be mitigated through more effective controls and processes. Hacks and malware accounted for nearly half (43%) of higher education data breaches over the six months; roughly even with the 45% of breaches caused by hacking in H1 2016. Of these, 41% were due to phishing.

• Mistakes in healthcare
Unintended disclosure – such as misdirected faxes and emails or the improper release of discharge papers – continued to drive the majority of healthcare losses, leading to 42% of industry breaches in 1H 2017 equal to the proportion of these breaches in the industry in 1H 2016. Hacks and malware accounted for only 18% of healthcare data breaches in 1H 2017, compared to 17% in 1H 2016.

• Unintended disclosures among financial services firms
Unintended disclosure – sending bank account details or personal information to the incorrect recipient – grew to 29% in H1 2017 from 25% in H1 2016, a level that has remained consistent since 2014. Hacks and malware were less frequent, representing 37% of breaches in 1H 2017 compared to 46% of breaches in H1 2016.

• Professional services on the wrong track
At first glance, professional services firms appear to have greater internal controls in place with unintended breaches accounting for 14% of all incidents, well below the average for the period in question. However, the trend is tracking adversely, up from 9% in H1 2016. Firms in the sector were not immune to hacking and malware attacks, with these incidents accounting for 44% of breaches over the period compared to 53% in 1H 2016. Social engineering scams, including W2 fraud and requests for fraudulent wire transfers, were a large driver of attacks in early 2017.

“Unintended breaches account for one-third of all data breach incidents reported to Beazley and show no signs of abating,” said Katherine Keefe, global head of BBR Services. “They are a persistent threat and expose organisations to greater risks of regulatory sanctions and financial penalties.

“Yet, they can be much more easily controlled and mitigated than external threats. We urge organisations not to ignore this significant risk and to put more robust systems and procedures in place.”

Four basic steps

The insurer acknowledges that perfect cyber security is impossible to attain, but there are four key steps that organisations can take to minimise the risk:

• Deploy prevention and detection tools.
• Use threat intelligence services.
• Train managers and employees on cyber security, threat awareness and phishing.
• Conduct risk assessments focused on identifying and protecting sensitive data.

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