Entries Tagged "cybercrime"

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Analyzing Cyber Insurance Policies

There’s a really interesting new paper analyzing over 100 different cyber insurance policies. From the abstract:

In this research paper, we seek to answer fundamental questions concerning the current state of the cyber insurance market. Specifically, by collecting over 100 full insurance policies, we examine the composition and variation across three primary components: The coverage and exclusions of first and third party losses which define what is and is not covered; The security application questionnaires which are used to help assess an applicant’s security posture; and the rate schedules which define the algorithms used to compute premiums.

Overall, our research shows a much greater consistency among loss coverage and exclusions of insurance policies than is often assumed. For example, after examining only 5 policies, all coverage topics were identified, while it took only 13 policies to capture all exclusion topics. However, while each policy may include commonly covered losses or exclusions, there was often additional language further describing exceptions, conditions, or limits to the coverage. The application questionnaires provide insights into the security technologies and management practices that are (and are not) examined by carriers. For example, our analysis identified four main topic areas: Organizational, Technical, Policies and Procedures, and Legal and Compliance. Despite these sometimes lengthy questionnaires, however, there still appeared to be relevant gaps. For instance, information about the security posture of third-party service and supply chain providers and are notoriously difficult to assess properly (despite numerous breaches occurring from such compromise).

In regard to the rate schedules, we found a surprising variation in the sophistication of the equations and metrics used to price premiums. Many policies examined used a very simple, flat rate pricing (based simply on expected loss), while others incorporated more parameters such as the firm’s asset value (or firm revenue), or standard insurance metrics (e.g. limits, retention, coinsurance), and industry type. More sophisticated policies also included information specific information security controls and practices as collected from the security questionnaires. By examining these components of insurance contracts, we hope to provide the first-ever insights into how insurance carriers understand and price cyber risks.

Posted on April 26, 2017 at 6:14 AM • View Comments

Duqu Malware Techniques Used by Cybercriminals

Duqu 2.0 is a really impressive piece of malware, related to Stuxnet and probably written by the NSA. One of its security features is that it stays resident in its host’s memory without ever writing persistent files to the system’s drives. Now, this same technique is being used by criminals:

Now, fileless malware is going mainstream, as financially motivated criminal hackers mimic their nation-sponsored counterparts. According to research Kaspersky Lab plans to publish Wednesday, networks belonging to at least 140 banks and other enterprises have been infected by malware that relies on the same in-memory design to remain nearly invisible. Because infections are so hard to spot, the actual number is likely much higher. Another trait that makes the infections hard to detect is the use of legitimate and widely used system administrative and security tools­—including PowerShell, Metasploit, and Mimikatz—­to inject the malware into computer memory.

[…]

The researchers first discovered the malware late last year, when a bank’s security team found a copy of Meterpreter—­an in-memory component of Metasploit—­residing inside the physical memory of a Microsoft domain controller. After conducting a forensic analysis, the researchers found that the Meterpreter code was downloaded and injected into memory using PowerShell commands. The infected machine also used Microsoft’s NETSH networking tool to transport data to attacker-controlled servers. To obtain the administrative privileges necessary to do these things, the attackers also relied on Mimikatz. To reduce the evidence left in logs or hard drives, the attackers stashed the PowerShell commands into the Windows registry.

BoingBoing post.

Posted on February 16, 2017 at 10:28 AM • View Comments

The Culture of Cybersecurity

Interesting survey of the cybersecurity culture in Norway.

96% of all Norwegian are online, more than 90% embrace new technology, and 6 of 10 feel capable of judging what is safe to do online. Still cyber-crime costs Norway approximately 19 billion NKR annually. At the same time 73.9% argue that the Internet will not be safer even if their personal computer is secure. We have also found that a majority of Norwegians accepts that their online activities may be monitored by the authorities. But less than half the population believe the Police is capable of helping them if they are subject to cybercrime, and 4 of 10 sees cyber activists (e.g. Anonymous) play a role in the fight against cybercrime and cyberwar. 44% of the participants in this study say that they have refrained from using an online service after they have learned about threats or security incidents. This should obviously influence digitalization policy.

Lots of details in the report.

Posted on October 3, 2016 at 6:23 AM • View Comments

Cybercrime as a Tax on the Internet Economy

I was reading this 2014 McAfee report on the economic impact of cybercrime, and came across this interesting quote on how security is a tax on the Internet economy:

Another way to look at the opportunity cost of cybercrime is to see it as a share of the Internet economy. Studies estimate that the Internet economy annually generates between $2 trillion and $3 trillion, a share of the global economy that is expected to grow rapidly. If our estimates are right, cybercrime extracts between 15% and 20% of the value created by the Internet, a heavy tax on the potential for economic growth and job creation and a share of revenue that is significantly larger than any other transnational criminal activity.

Of course you can argue with the numbers, and there’s good reason to believe that the actual costs of cybercrime are much lower. And, of course, those costs are largely indirect costs. It’s not that cybercriminals are getting away with all that value; it’s largely spent on security products and services from companies like McAfee (and my own IBM Security).

In Liars and Outliers I talk about security as a tax on the honest.

Posted on September 1, 2016 at 9:49 AM • View Comments

The Economist on Hacking the Financial System

The Economist has an article on the potential hacking of the global financial system, either for profit or to cause mayhem. It’s reasonably balanced.

So how might such an attack unfold? Step one, several months before mayhem is unleashed, is to get into the system. Financial institutions have endless virtual doors that could be used to trespass, but one of the easiest to force is still the front door. By getting someone who works at an FMI or a partner company to click on a corrupt link through a “phishing” attack (an attempt to get hold of sensitive information by masquerading as someone trustworthy), or stealing their credentials when they use public Wi-Fi, hackers can impersonate them and install malware to watch over employees’ shoulders and see how the institution’s system functions. This happened in the Carbanak case: hackers installed a “RAT” (remote-access tool) to make videos of employees’ computers.

Step two is to study the system and set up booby traps. Once in, the gang quietly observes the quirks and defences of the system in order to plan the perfect attack from within; hackers have been known to sit like this for years. Provided they are not detected, they pick their places to plant spyware or malware that can be activated at the click of a button.

Step three is the launch. One day, preferably when there is already distracting market turmoil, they unleash a series of attacks on, say, multiple clearing houses.

The attackers might start with small changes, tweaking numbers in transactions as they are processed (Bank A gets credited $1,000, for example, but on the other side of the transaction Bank B is debited $0, or $900 or $100,000). As lots of erroneous payments travel the globe, and as it becomes clear that these are not just “glitches”, eventually the entire system would be deemed unreliable. Unsure how much money they have, banks could not settle their books when markets close. Settlement is a legally defined, binding moment. Regulators and central banks would become agitated if they could not see how solvent the nation’s banks were at the end of the financial day.

In many aspects of our society, as attackers become more powerful the potential for catastrophe increases. We need to ensure that the likelihood of catastrophe remains low.

Posted on July 25, 2016 at 6:10 AM • View Comments

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Sidebar photo of Bruce Schneier by Joe MacInnis.