KPMG’s predictions for 2016 for the cyber security industry

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Each year, companies interested in cyber threats publish similar documents to that reproduced below. Each year governments claim to be doing ‘something’ about the fastest rising global crimes. Sadly, not much has changed. More than 25 years ago, cyber security specialists warned governments of the potential threats and the need to both legislate and support development of technology to prevent the establishment of this very costly crime wave. Unfortunately, politicians failed to act and the IT and communications industries failed to take action on the grounds that it would disrupt marketing programs and hit the profit margins. There are always excuses for not taking risk management seriously. Even given this serious level of threat and neglect, figures estimating cyber crime have consistently fallen well below the actual crime levels. This is because many systems, particularly domestic systems, have virtually no protection and many attacks go completely unseen, but also because some organizations, notably banks, conceal the level of attacks for fear that this will damage customer confidence. Lets make 2016 the year when everyone wakes up and starts acting before the problem becomes too severe to get under full control.  Editor

 

 

30th December 2015

 

  • Looking ahead at the cyber security landscape for next year, David Ferbrache, Technical Director at KPMG’s cyber security practice, points out that law enforcement is catching up with hackers and in response they are employing smarter methods of attack:

 

Revealing the scale of the problem

 

“The recent field trial by the Office of National Statistics suggested that there could have been over 7.5 million cyber offences against individuals last year. 2016 will see cybercrime finally find its place in our official statistics. I doubt that even the headline grabbing statistics which follow will capture the true scale of cybercrime – with many crimes against organisations remaining unreported.

 

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Extortion attacks make a comeback

 

“Extortion attacks have been making a comeback with criminals demanding significant sums for suspending denial of service attacks against targets; not going public with stolen data; and of course providing a ‘service’ which grants access to a ‘client’s data which they had previously hacked and encrypted. Although security firms and law enforcement have become savvier in disrupting the infrastructure being used by organised crime groups, cyber criminals continue to search for new ways to turn other people’s information into money.


HNWs, corporate treasuries and commercial banks face a bigger threat

 

“While phishing attacks, banking Trojans and large scale low value cash outs have characterised the last 10 years of cybercrime, new techniques are becoming part of the criminal arsenal while firms invest more and more in cyber threat intelligence in the hope of keeping up. In 2016 we predict that organised crime groups will become increasingly selective in targeting high net worth individuals, corporate treasuries and commercial bank accounts; as well as looking for new ways to profit. The recent US indictments of alleged market hackers show just how sophisticated manipulation of markets has become – whether through front running stocks using stolen market sensitive information, or pump and dump schemes using personal data acquired in bulk from unsuspecting banks, insurers and even governments.”

 

  • 2015 has topped 2014’s unenviable record of bulk data breaches with some of the most serious large scale disclosures of personal information. Unfortunately this trend is likely to continue in 2016, with David Ferbrache suggesting that the patience of regulators is beginning to wear thin and there is a growing drive for transparency around business’ approach to cyber security.

 

A regulated response

 

“The much lobbied EU General Data Protection Regulation and the EU Network and Information Security Directives are likely to be finally agreed in 2016, firing the starting pistol for governments and firms to implement within two years. Together these EU interventions set the scene for greater transparency around data breaches, a more robust data protection stance and a Europe wide nudge towards greater cyber security regulation.

 

“While large international firms are no strangers to an increasingly complex and uncoordinated global tapestry of national cyber security initiatives; smaller firms are likely to come under increasing pressure in 2016 as their larger cousins embed cyber security requirements into their contracting and procurement processes – fuelling both a supply chain security industry and the growth of third party cyber insurance.”

 

“The expected launch of a new National Cyber Security Strategy in 2016 has the potential to signal a new relationship between UK governance and industry, with the new National Cyber Centre at its heart. In 2016 we can only hope for a nuanced approach to regulation which works with the risk mechanisms in the markets to drive the right behaviours and address the current market failure around cyber security.”

 

  • Following recent geopolitical developments it is likely that terrorism will spill over to the cyber world. This is something that was already raised by the Chancellor when he spoke at GCHQ recently. David Ferbrache, points out that:

 

Terrorist-deployed attacks

 

Terrorist organisations are becoming more and more tech savvy exploiting the internet for propaganda, radicalisation and communications. Often seen as dog which hasn’t yet barked, it seems inevitable that such terrorist groups will explore and exploit cyber attacks. While these attacks are likely to lack the visceral impact of the tragic bombings and shootings which have become all too common, they are likely to become more frequent in our increasingly interconnected and interdependent world.

 

“2016 is likely to be the year that cyber resilience starts to matter more than just cyber protection, as governments worry about systemic risks from cyber attacks and critical infrastructure firms start to pay more attention to just how resilient their business models really are to these new threats. The NIST cyber security framework will succeed in becoming the de-facto yardstick for cyber security amongst such firms.”

 

  • David Ferbrache’s concluding remarks highlight that business of all sizes need to look beyond cyber security as a technical issue, and start preparing for some of the worst case scenarios:

 

Cyber attacks – no longer an ‘if’, but ‘when’

 

“This year cyber security has been grabbing the headlines following many high profile data breaches – expect that to continue into 2016. Firms are finally beginning to recognise that a determined and well-resourced adversary will find a way to breach their cyber protection regardless of the robustness of their defences. This is leading to firms focusing more on the data and systems that are most critical to their operations and how to reduce the risk to those assets”.


“Many business now accept the likelihood of a data breach and are turning their attention to what a cyber incident might actually mean for their business, and just how they can restore and maintain client and customer confidence if and when they are hit – an issue for the whole C suite, not just the CIO.”

 

  • And finally, one prediction which we would dearly love to see come true, but we have a suspicion isn’t likely in 2016… maybe in a few years to come…

 

“Passwords are broken! They have become one of the weakest links in our security chain. People are being forced to adopt more and more convoluted passwords, while simultaneously trying to avoid the temptation to reuse those super strong passwords. It is high time we moved to more sophisticated approach to authenticating people which blends biometrics, behavioural analysis and contextual information rather than relying on knowledge of a single increasingly user unfriendly password.”