A few years back I was stunned by a story of Frankenstein written by Mary Shelley. It’s a science fiction story, and the protagonist from the book creates a monster out of pieces from corpses and various components. He is very happy with his invention and innovation. But then there is a problem. Frankenstein doesn’t know how to tame it. And the monster grows wild. He becomes uncontrollable and starts hurting human beings.
The reason I remember this story today is because I find a great resemblance between what happened in the story and what has been happening across industries. Every business has embraced technology and they are trying to adopt a digital culture. While technology has automated industries and revolutionised the working structure, it also comes with its own challenge — it is exposed to cyberattacks. And surprisingly, despite adding strong firewalls, different tech layers, not all of them are able to protect and control their systems from hacking. Just like Frankenstein, who couldn’t stop the monster from killing people.
It is inevitable to stay away from the digital world and it’s also difficult to deal with it. This week, research firm Thales released a report which says two-thirds of businesses in India have seen an increase in ransomware attacks. To make it clear, out of the total respondents, one in four businesses have witnessed a ransomware attack.
It’s not just Thales that showcases the darker side of the business. Many IT companies, consultancy firms and think tanks have reported the increase in the number of cyberattacks. According to VMware, there was a 238% increase in the targeting of financial institutions. The Cyber Threat Report of 2022 by Sonic Wall reveals that governments globally have seen a 1,885% increase in ransomware attacks.
Well, generally, the hackers or ransomware attacks play with the data and hack the systems. Before the company can notice, they get their job done in a fraction of seconds. Once the data is breached, it hits the companies hard because it disrupts the regular operations and swells the costs.
According to IBM and Ponemon Institute, the average cost of data breaches in 2021 was $5.72 million. It can certainly keep a medium and small business down for a few quarters.
Banks and financial institutions are most vulnerable to cyberattacks. In fact, they are always the top hacker targets. While cyberattack on a Bangladesh bank shook the world, there have been several attacks on banks globally. In India, the largest cyberattack was on Cosmos Bank, where the amount involved was a little less than Rs 100 crore.
With the rise of digital banking, the numbers are only growing. According to CERT, in 2020, about 2.9 lakh crore cybersecurity incidents related to digital banking were reported. This includes website hacking, network scanning, phishing attacks, etc. There is an average 40% increase in cyberattacks in the digital banking space if you look at the data of the last three years.
From meat suppliers in the US to the bitcoin holders of Singapore, from the account holder of Pune to the e-commerce buyer of Hong Kong, no one is safe from hackers.
But the interesting thing I learned from reading a lot of fraud survey reports is that the major reason behind these attacks is data theft. And data theft happens only at the company level. Bigger the company, the bigger the vendors and supply chain. There are many chances of data breaches at various points. In a few cases, there were also noticed that data was compromised at the company level itself. And that is going to be the bigger challenge for companies.
Apart from this, while the Russia and Ukraine crisis is on, there are more attacks expected. So, businesses and specifically banks and financial institutions have no other alternative but to stay safe.
As usual, I am also adding here the top five in-depth articles/copies that we published this week. Trust, you will find them meaningful.
1. How can CFOs leverage the power of Fintech?
2. ICAI won’t spare any CA guilty of fraud but don’t paint everyone with the same brush: President Debashis Mitra
3. PFS declares ITPCL account as fraud, says no regulatory requirement to report to exchanges
4. Two-third businesses in India have seen increase in ransomware attacks: Thales Survey
5. .Impending rate hike not a big concern for India Inc CFOs