Last year was a record-setting year for data breaches, exceeding the total for 2020 by 17% before the fourth quarter even began. This year will likely be no different as more organizations shift to hybrid work models. To better understand how these incidents happen, we put together a list of the common risks and causes of data breaches.
The risks associated with data breaches
1. Sensitive data theft
The consequences of data theft can be catastrophic for both companies and their customers. If the breach includes personally identifiable information such as names, biometric records and social security numbers, it could result in countless cases of identity theft. Sensitive data might also include company information like login credentials and financial records that shouldn't be exposed to the public.
2. Financial impact
Data breaches have a substantial financial impact on effected organizations. According to Security Intelligence, the average cost of a data breach in 2021 was an astonishing $4.24 million. This includes everything from ransom demands and victim compensation to the cost of investigations, incident response and additional cybersecurity measures. If the breach is bad enough, firms can also expect legal expenses, regulatory penalties and even a decrease in share price.
3. Damaged reputation
The drop in market valuation after data breaches is often partly due to public perception. A single incident can devastate an organization's reputation as customers lose trust in the company's ability to secure their information. Some breaches can even result in class-action lawsuits that further smear a company's reputation while costing millions.
Common causes of data breaches
1. Software settings and vulnerabilities
When software systems are set up incorrectly, it can lead to data breaches that have the potential to expose millions of people's private data. For example, last year, over 533 million Facebook users worldwide had their personal information stolen and published online due to misconfigured software, as Business Insider reports. Hackers stole this data back in 2019 before Facebook was able to patch their software. This catastrophic breach underscores the importance of properly configuring software settings.
Software vulnerabilities are among the most common and convenient methods cybercriminals use to steal sensitive data. These flaws can lead to zero-day exploits, as we've seen with the recent Log4J vulnerability, allowing hackers to access databases, inject malicious code and malware and even steal credit cards and identities.
2. Social engineering
It isn't often that cybercriminals initiate data leaks, but when they do, it's usually through social engineering attacks. In cybersecurity, social engineering refers to the use of psychological manipulation tactics to gain credential information from unsuspecting victims. According to ZDNet, an average organization is hit with 700 social engineering attempts each year. The most common type of these attacks is phishing, in which bad actors pose as a trusted source to extract sensitive data.
Phishing attacks are relatively simple for cybercriminals to perform and can be carried out electronically or verbally. Electronic attacks usually take the form of email spoofing, i.e., baiting victims into clicking on malicious links or downloading malware via infected attachments. Threat actors can also use verbal tactics to impersonate IT team members or administrators over the phone. Once connected to an actual employee, they request credentials under false pretenses to access an organizations' network and computer systems.
3. Device theft
When a company or employees' device is lost or stolen, it can easily fall into the wrong hands, leading to identity theft and data breaches. With the physical device in hand, hackers can brute force their way into accounts or deceive IT administrators into divulging login information. Once they log in, these bad actors have full access to the company's system. They can then download all the stored data and either hold it for ransom or leak it online. This is what's known as an endpoint attack as hackers utilize compromised devices as an entry point into a system.
4. Weak passwords and authentication
Using default or recycled passwords is another easy way for hackers to gain access to an organization's network. A single compromised password can often expose multiple accounts of an individual who uses the same password across different logins. Factory-standard credentials are also generally available to the public, making it essential for employees to change their passwords from the default. In general, it's best to change passwords frequently to maintain the security of your organization's credentials and sensitive information.
Additional verification is also critical in protecting your organization from hackers looking to exploit stolen credentials. According to Reuters, DarkSide, the cybercriminal organization behind the recent Colonial Pipeline ransomware, used a single password unprotected by multi-factor authentication as their attack vector. If the company had implemented these extra verification steps, the hackers would have been unable to enter accounts without answering security questions or passing biometric tests.
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