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Financial institutions suffering from global cybercrime
From: Audrey McNeil <audrey () riskbasedsecurity com>
Date: Tue, 16 Sep 2014 19:25:27 -0600
http://www.insidecounsel.com/2014/09/16/financial-institutions-suffering-from-global-cyber Cybercrime has become an item of international focus as hackers from all parts of the globe manage to expose and injure individual and business profiles. Aside from the obvious risks that hackers pose to consumers, businesses face unique difficulties in not only addressing cyber security, but also mitigating cyber crime. The cost of handling cyber issues is nothing to ignore, as global costs rise in proportion to the severity of cyber attacks. A recent report from the Center for Strategic and International Studies (CSIS) — conducted between 2010 and 2013 — determined that cybercrime costs the U.S. economy $100 billion on an annual basis. Attorney Arkady Bukh, New York federal defense attorney and the founder of Bukh Law Firm, shed some light on how brutal these costs actually are for businesses, and how certain industries are more intensely affected. Regarding financial institutions specifically, Bukh remarks that there are different levels of damage done per cyber hack, and that reputational damage is one of the greatest risks. “If the money (i.e., credit cards) was stolen from the financial institution then the reputational damage would be great. On the other hand, if the hackers accessed accounts and transferred the money out then the financial groups are exposed to a certain level -- they are insured for fraud, but it's hard to tell exactly about the boundaries of such protection. But, according to banks, this is one of the costs of running business in today's environment,” says Bukh. But, of course reputational damage is impossible to buy back, as Bukh notes, and it’s a specific type of damage. Banks, especially, are less likely to see business from new clients if word gets around that its own clients have been hacked one way or another. While the same goes for retail businesses, it is especially egregious for financial institutions. Naturally, cybercrime has an effect on the global economy as a whole — particularly if countries as economically integral as the U.S. are spending $100 billion to cover damages. While Bukh says that it’s too early to say how seriously cybercrime has affected the world economy, the chances are it is having an impact “sooner than later, as for every arrested hacker there are thousands of new ‘wannabe’ cyber criminals.” Bukh notes that the traditional cybercrime is being slowly merged with a traditional criminal world, which poses a whole different kind of threat. But companies are not at a total loss, nor are they completely at the mercy of international cyber thieves. Bukh notes that banks — particularly ones in the U.S. — are adapting to European tactics of preventing cybercrime including using one-time password generator boxes or USB access cards. Bukh says that, in the past, U.S. institutions have made it quite easy for hackers to access accounts and financial transactions. In the long run, it will continue to be difficult to assess the total damages done by cybercrimes as long as companies and governments continue to conceal in part or full how severely they are affected by hacking.
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- Financial institutions suffering from global cybercrime Audrey McNeil (Sep 22)