Frequency, cost of cyberattacks on the rise

The cost of a U.S. cyber attack increased 78 percent over the past four years -- 26 percent in the past year -- and the occurrence and sophistication of such attacks also are on the rise, according to a new report.

The cost of cyber crime averaged around $11.6 million in 2013 at 60 organizations, including federal agencies, that participated in a new Ponemon Institute study. The organizations averaged 122 successful attacks per week, including viruses and other malware, denial-of-service attacks and data exfiltration.

"You can't argue that cyber attacks are rare event," said Larry Ponemon, chairman and founder of the Ponemon Institute. "These are common and organizations need to have a way to deal effectively with these problems. Deploying the right technology and having the right, smart people are essential in governance."

Malware such as trojan viruses and worms are the most common types of attacks, according to the report, which was sponsored by HP Enterprise Security Products. But a particular concern for the government is the growing trend in more serious crimes.

Denial-of-service attacks, for example, overwhelm networks with communications requests, to the point that online services and even simple access to targeted websites becomes impossible. The best-known example was when Estonian government websites were attacked in 2007, but it has happened to governments worldwide in recent years.

"It's not just an interruption to IT, but also to the business process," Ponemon said. "It's a very costly ordeal for a government organization." He noted that one unnamed U.S. federal agency "had a fairly significant cost of disruption because when the system was down, their business processes failed. They had significant idle time and couldn't perform their mission for days or weeks."

Another serious and increasingly common type of attack involves the outright theft of data. It could be intellectual property or, in the case of Edward Snowden and Bradley Manning, state secrets, and it is a top concern for the government.

"In government agencies, if there's one concern of consequence it's around data exfiltration. In general we see it as a pretty pervasive problem," Ponemon said. "The government is just as susceptible as the private sector to most types of attacks, but especially to data exfiltration, the theft of confidential, sensitive or classified information – those with the highest costs."

These stealthier, more-advanced cyber crimes also are more difficult to detect than simpler types, which means the attacks go on for longer and therefore cost organizations more money. According to a Verizon data breach report from April, 66 percent of cyber attacks took months or longer to discover, and they also take significant time to remediate.

Often, attacks are found accidentally, and frequently are not found by the victim organization.

"In 60 percent of breaches, the organizations were notified by a third party, such as a government agency, a customer or a partner," said Dan Lamorena, senior director of product marketing for HP Enterprise Security Products. "The reality is only 48 percent of the companies surveyed had technology intelligence tools."

Those advanced security intelligence tools include those that can look at patterns of data and draw on big data analytics, as well as employ encryption, data loss prevention tools and protections at the human, application and data layers. Those tools provide better visibility into the network, but they are not yet broadly enough implemented, Lamorena said.

"Network security still gets the lion's share of budget dollars, and other areas where agencies can get better value aren't getting that yet," he said. "There are ways to look at investment in security and get the best bang for your buck. Security intelligence tools, software and application testing, better people and training, and better data protection tools – these all offer higher return on interest, but they're not getting enough investment so far."