Cyber Security: The Growth of an Industry

Bill Ward, Executive Vice President, Chief BSA/AML & Security Officer, First Republic Bank

October 20, 2015

As people increasingly spend more time online, for both personal and professional reasons, a window has been left open for the next generation of criminals. Cyber theft, once relegated to isolated incidents, is evolving into a large, pervasive operation.

Cyber thieves are tech-savvy pickpockets who work on a much larger scale—online crooks who sneak past protective measures and, in effect, pick thousands of pockets in one fell swoop.

Over the years, they’ve gotten very good at it. From a consumer’s standpoint, it’s valuable to understand how cyber theft has evolved, and what can be done to protect your information online.

A Change in Motivation and Scale

One development in the world of cyber threats is the motivation underlying the crime. Not long ago, many cyber security breaches were derived from a thirst for notoriety: Hackers wanted to show off their prowess. Now, it’s more a mercenary pursuit—cyber thieves are in it for the tangible gain, from stealing hundreds of thousands of dollars from businesses using wire transfer fraud to breaching government networks to take, and subsequently sell, sensitive information. 

The scale of theft has also grown. While the number of complaints submitted to the FBI’s Internet Crime Complaint Center decreased 16 percent between 2011 and 2014 the dollar value of the losses jumped nearly 40 percent to over $800 million. Fewer individuals are falling victim to cyber theft but their losses are growing substantially.

New Methods of Fraud

The online “location” of cyber theft perpetrators has evolved as well. While “malware” infection—intrusive software inserted into computers to mislead users—has been largely mitigated by detectors, cyber thieves have moved on to a technique known as “spoofing” or social engineering fraud. Here, emails are hijacked and used to direct authorized personnel to transfer vast sums of money into cyber criminal-controlled accounts. 

What You Can Do

Fortunately, efforts to fight hackers are quickly improving. On one level, there’s Regulation E—federally mandated measures that offer valuable protection from electronic fraud. From a corporate standpoint, companies that use more secure channels to direct and manage wire transfers and other activities involving large sums of money can more effectively watch out for fraud attempts.

Consumers can also better protect themselves against cyber crimes by taking the following actions:

  • Watching for automatic or uninitiated downloads
  • Installing and maintaining anti-virus software, firewalls, and email filters
  • Hovering over links in emails with your cursor to show the actual URL at the bottom

In the end, whether it’s a highly skilled thief slipping past a corporation’s firewall to snag valuable information or a hacker harvesting credentials to gain access to a bank account, cyber theft is a large, organized community that’s constantly changing its model based on security developments. Though there have been developments in terms of cyber security technology, following best practices on protecting yourself from cyber theft can save you from falling victim to online fraud.

©First Republic Bank, 2015

All information in this article is from sources deemed to be reliable.

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