As data breaches continue to target various industries, it is becoming increasingly important for businesses and consumers to protect themselves from possible attacks. Jennifer Openshaw, a MarketWatch columnist and consumer financial expert, spoke to MarketWatch about how companies and customers can protect their financial and social identities. Her book, “The Socially Savvy Advisor,” was published in fall 2014 and details effective social media strategy for the financial industry.
MarketWatch: We’ve had 10 major cyber attacks now in the past two years, what’s going on?
Openshaw: As major companies are developing new kinds of technology and social media, new risks are being exposed, and leaders are still figuring out how to address those risks. Cyber crime is not going away any time soon. Cyber attacks range from potential espionage to data breaches, for example that of J.P. Morgan Chase JPM, -0.39% From a corporate standpoint, there is a reputational risk, as in the case of Sony SNE, -0.23% where private personal messages and comments were disclosed. There are also communication risks, as in the case of the U.S. military Central Command, whose social media accounts were apparently hijacked, raising questions about who’s in control of the communications going out to the public.
MarketWatch: Are these breaches the result of internal vulnerabilities or hackers becoming more sophisticated?
Openshaw: Both. You’ve got some companies proactively preparing themselves for cyber attacks while others are waiting for something to happen. Now we have different flows of information, whether it’s different kinds of devices to new social channels, opening up new holes that have to be addressed. For hackers, their goal is to find those holes and new ways of attacking. These new ways can lead to data breaches, like those at Target TGT, -0.75% Home Depot HD, -0.62% and J.P. Morgan Chase. Social media accounts are another risk. The biggest challenge today is determining who the perpetrators are.
MarketWatch: How successful are companies at finding the perpetrators?
Openshaw: In a lot of cases, they are still trying to figure out who is responsible. There are a lot of possibilities, and it is still a huge challenge to figure out who is behind these. We need to do a better job of understanding how they’re happening.
MarketWatch: What is the magnitude and severity of these attacks?
Openshaw: Millions of people have already been affected, and there have been millions of dollars in costs to businesses. About half of organizations have suffered at least one data breach, according to Experian. Pricewaterhouse Coopers found that from 2013 to 2014 the financial industry spent 50% more on cyber security. U.S. financial firms lost an average of $23.6 million from cyber security breaches in 2013. The average annual cost per company of successful attacks increased to $20.8 million in the financial services industry, $14.5 million in the technology sector and $12.7 million in communications industries, according to Ponemon Institute. We now really need to be taking a proactive stance in the fight against cyber attacks. They’re threatening not only businesses but consumers’ financial and online safety reputations.
MarketWatch: What are the top three cyber risks consumers face? How might their information be breached?
Openshaw: Whether it’s a move to take over your social media channels, your customer information or your mobile device, consumers and financial leaders are exposed to all sorts of risks.