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Equifax rating outlook decimated over cybersecurity breach

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Apple and Cisco team up on cybersecurity insurance
Apple and Cisco are now offering insurance policies to companies to protect them financially against cyber attacks.

Moody’s has cut its rating outlook for Equifax in consideration of a disastrous security breach which led to the theft of over 146 million user records.

The capital markets and investment firm decided to reduce its Equifax outlook from stable to negative this week, as first reported by CNBC.

A 2017 data breach is the cause of the financial fallout. Individuals from the US, Canada, and the United Kingdom were informed that their information had been exposed, potentially including the theft of names, social security numbers, birthdates, home addresses, and partial driving license details.

A well-known vulnerability in Apache Struts, CVE-2017-5638, was blamed for the intrusion.

See also: Equifax, FICO launch Data Decision Cloud as credit scores meld with marketing, compliance, customer experience

The Apache Struts Project Management Committee said at the time the attackers behind the breach “either used an earlier announced vulnerability on an unpatched Equifax server or exploited a vulnerability not known at this point in time.” Equifax revealed an unpatched system was at fault, despite the bug’s disclosure and a patch being made available two months before the data breach occurred.

In other words, the data breach was preventable, a fact that haunts Equifax to this day.

The failure to patch the problem has been an expensive lesson for the company, not just in terms of its battered reputation, but in cold, hard cash and results on the balance sheet.

Moody’s cited a legal expenditure charge of $690 million in the first quarter as a reason for the downgrade. However, the cost to Equifax is far more substantial, with Q1 2019 earnings also revealing $786.8 million in general costs due to the data breach, $82.8 million in data security costs, $12.5 million in legal fees, and $1.5 million in product liability charges, as noted by IT Pro.

CNET: Instagram website leaked phone numbers and emails for months, researcher says

“We are treating this with more significance because it is the first time that cyber has been a named factor in an outlook change,” Joe Mielenhausen, a Moody’s spokesperson told CNBC. “This is the first time the fallout from a breach has moved the needle enough to contribute to the change.”

The financial ramifications of lax patch processes are now proving to be an ongoing strain and burden on Equifax. The company is also facing class-action lawsuits and regulatory scrutiny — which may, in turn, lead to additional fines and penalties in the future.

These problems have a knock-on impact which has now entered investor territory, as traders and shareholders will often examine rating outlooks and creditworthiness reports provided by companies such as Moody’s to ascertain the long-term prospects of an organization.

Cyber risk and cyber insurance are relatively new entrants to investor considerations but ones that cannot be ignored.

TechRepublic: Arm suspends cooperation with Huawei, endangering mobile and server business

The consequences of a major security incident or data breach can now have a long-term financial impact for a victim company and so the responsibility now lies on corporations to strengthen their security practices as much as possible to mitigate the risk of attack — as well as reduce the risk to investors.

Equifax serves as a lesson in why boards should sign up to proactive security defense rather than consider security as a budgetary afterthought. However, despite the credit rating company’s efforts to improve its security and prevent such a data breach from ever happening again, the millions of dollars now spent on shoring up security is also a financial burden and one that Moody’s cannot ignore.

“Beyond 2020, infrastructure investments are likely to remain higher than they had been before the 2017 breach,” the company added.

ZDNet has reached out to Equifax and will update if we hear back. 

Previous and related coverage


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GigaOm Radar for DDoS Protection

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With ransomware getting all the news coverage when it comes to internet threats, it is easy to lose sight of distributed denial of service (DDoS) attacks even as these attacks become more frequent and aggressive. In fact, the two threats have recently been combined in a DDoS ransom attack, in which a company is hit with a DDoS and then a ransom demanded in exchange for not launching a larger DDoS. Clearly, a solid mechanism for thwarting such attacks is needed, and that is exactly what a good DDoS protection product will include. This will allow users, both staff and customers, to access their applications with no indication that a DDoS attack is underway. To achieve this, the DDoS protection product needs to know about your applications and, most importantly, have the capability to absorb the massive bandwidth generated by botnet attacks.

All the DDoS protection vendors we evaluated have a cloud-service element in their products. The scale-out nature of cloud platforms is the right response to the scale-out nature of DDoS attacks using botnets, thousands of compromised computers, and/or embedded devices. A DDoS protection network that is larger, faster, and more distributed will defend better against larger DDoS attacks.

Two public cloud platforms we review have their own DDoS protection, both providing it for applications running on their public cloud and offering only cloud-based protection. We also look at two content delivery networks (CDNs) that offer only cloud-based protection but also have a large network of locations for distributed protection. Many of the other vendors offer both on-premises and cloud-based services that are integrated to provide unified protection against the various attack vectors that target the network and application layers.

Some of the vendors have been protecting applications since the early days of the commercial internet. These vendors tend to have products with strong on-premises protection and integration with a web application firewall or application delivery capabilities. These companies may not have developed their cloud-based protections as fully as the born-in-the-cloud DDoS vendors.

In the end, you need a DDoS protection platform equal to the DDoS threat that faces your business, keeping in mind that such threats are on the rise.

How to Read this Report

This GigaOm report is one of a series of documents that helps IT organizations assess competing solutions in the context of well-defined features and criteria. For a fuller understanding consider reviewing the following reports:

Key Criteria report: A detailed market sector analysis that assesses the impact that key product features and criteria have on top-line solution characteristics—such as scalability, performance, and TCO—that drive purchase decisions.

GigaOm Radar report: A forward-looking analysis that plots the relative value and progression of vendor solutions along multiple axes based on strategy and execution. The Radar report includes a breakdown of each vendor’s offering in the sector.

Solution Profile: An in-depth vendor analysis that builds on the framework developed in the Key Criteria and Radar reports to assess a company’s engagement within a technology sector. This analysis includes forward-looking guidance around both strategy and product.

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GigaOm Radar for Security Information and Event Management (SIEM) Solutions

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The security information and event management (SIEM) solution space is mature and competitive. Most vendors have had well over a decade to refine their products, and the differentiation among basic SIEM functions is fairly small.

In response, SIEM vendors are developing advanced platforms that ingest more data, provide greater context, and deploy machine learning and automation capabilities to augment security analysts’ efforts. These solutions deliver value by giving security analysts deeper and broader visibility into complex infrastructures, increasing efficiency and decreasing the time to detection and time to respond.

Vendors offer SIEM solutions in a variety of forms, such as on-premises appliances, software installed in the customers’ on-premises or cloud environments, and cloud hosted SIEM-as-a-Service. Many vendors have developed multi-tenant SIEM solutions for large enterprises or for managed security service providers. Customers often find SIEM solutions challenging to deploy, maintain, or even operate, leading to a growing demand for managed SIEM services, whether provided by the SIEM vendor or third-party partners.

SIEM solutions continue to vie for space with other security solutions, such as endpoint detection and response (EDR), security orchestration automation and response (SOAR), and security analytics solutions. All SIEM vendors support integrations with other security solutions. Many vendors also offer tightly integrated solution stacks, allowing customers to choose the solutions they need most, whether just a SIEM, a SIEM and a SOAR, or some other combination. Other vendors are incorporating limited EDR- or SOAR-like capabilities into their SIEM solutions for customers who want the extra features but are not ready to invest in multiple solutions.

With so many options, choosing a SIEM solution is challenging. You will have to consider several key factors, starting with your existing IT infrastructure. Is an on-premises SIEM the right choice for you, or do you want a cloud-based or hybrid solution? Which systems and devices will be sending data to your SIEM, and how much data will it need to collect, correlate, analyze, and store? You should also consider the relative importance of basic capabilities and advanced features, bearing in mind that the basic capabilities may be considerably easier to deploy, maintain, and operate. Will your IT and security teams be able to deploy, maintain, and operate the solution on their own, or should you look for managed services to handle those tasks?

This GigaOm Radar report details the key SIEM solutions on the market, identifies key criteria and evaluation metrics for selecting a SIEM, and identifies vendors and products that excel. It will give you an overview of the key SIEM offering and help decision-makers evaluate existing solutions and decide where to invest.

How to Read this Report

This GigaOm report is one of a series of documents that helps IT organizations assess competing solutions in the context of well-defined features and criteria. For a fuller understanding consider reviewing the following reports:

Key Criteria report: A detailed market sector analysis that assesses the impact that key product features and criteria have on top-line solution characteristics—such as scalability, performance, and TCO—that drive purchase decisions.

GigaOm Radar report: A forward-looking analysis that plots the relative value and progression of vendor solutions along multiple axes based on strategy and execution. The Radar report includes a breakdown of each vendor’s offering in the sector.

Solution Profile: An in-depth vendor analysis that builds on the framework developed in the Key Criteria and Radar reports to assess a company’s engagement within a technology sector. This analysis includes forward-looking guidance around both strategy and product.

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Key Criteria for Evaluating a Distributed Denial of Service (DDoS) Solution

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Although ransomware is making all the headlines today, it’s not the only kind of attack that can intrude between you and your customers. Distributed denial of service (DDoS) attacks, in which a target website is overwhelmed with spurious traffic, have become increasingly common.

Websites and online applications have become critical to how businesses communicate with their customers and partners. If those websites and applications are not available, there is a dollars and cents cost for businesses, both directly in business that is lost and indirectly through loss of reputation. It doesn’t matter to the users of the website whether the attacker has a political point to make, wants to hurt their victim financially, or is motivated by ego—if the website is unavailable, users will not be happy. Recent DDoS attacks have utilized thousands of compromised computers and they can involve hundreds of gigabits per second of attack bandwidth. A DDoS protection platform must inspect all of the traffic destined for the protected site and discard or absorb all of the hostile traffic while allowing legitimate traffic to reach the site.

Often the attack simply aims vast amounts of network traffic at the operating system under the application. These “volumetric” attacks usually occur at network Layer 3 or 4 and originate from compromised computers called bots. Few companies have enough internet bandwidth to mitigate this much of an attack on-premises, so DDoS protection needs to be distributed to multiple data centers around the world to be effective against these massive attacks. The sheer scale of infrastructure required means that most DDoS platforms are multi-tenant cloud services.

Other attacks target the application itself, at Layer 7, with either a barrage of legitimate requests or with requests carefully crafted to exploit faults in the site. These Layer 7 attacks look superficially like real requests and require careful analysis to separate them from legitimate traffic.

Attackers do not stand still. As DDoS protection platforms learn to protect against one attack method, attackers will find a new method to take down a website. So DDoS protection vendors don’t stand still either. Using information gathered from observing all of their protected sites, vendors are able to develop new techniques to protect their clients.

How to Read this Report

This GigaOm report is one of a series of documents that helps IT organizations assess competing solutions in the context of well-defined features and criteria. For a fuller understanding consider reviewing the following reports:

Key Criteria report: A detailed market sector analysis that assesses the impact that key product features and criteria have on top-line solution characteristics—such as scalability, performance, and TCO—that drive purchase decisions.

GigaOm Radar report: A forward-looking analysis that plots the relative value and progression of vendor solutions along multiple axes based on strategy and execution. The Radar report includes a breakdown of each vendor’s offering in the sector.

Solution Profile: An in-depth vendor analysis that builds on the framework developed in the Key Criteria and Radar reports to assess a company’s engagement within a technology sector. This analysis includes forward-looking guidance around both strategy and product.

Continue Reading

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