Security Products

June 20, 2008

Nearly nine in 10 corporate data breaches could have been prevented had reasonable security measures been in place, according to a comprehensive report issued recently by Verizon Business. The study also provides key recommendations to help businesses protect themselves and urges them to be proactive.

The "2008 Data Breach Investigations Report" spans four years and more than 500 forensic investigations involving 230 million records, and analyzes hundreds of corporate breaches including three of the five largest ones ever reported. This first-of-its-kind study, conducted by Verizon Business Security Solutions investigative experts, also found that 73 percent of breaches resulted from external sources versus 18 percent from insider threats, and most breaches resulted from a combination of events rather than a single hack or intrusion.

"Security breaches and the compromise of sensitive information are very real and growing concerns for organizations worldwide," said Dr. Peter Tippett, vice president of research and intelligence for Verizon Business Security Solutions. "This report can help companies better understand data breaches -- how they occur and the commonalities that exist. Most importantly, it urges organizations to be proactive in their approach to security -- the absolute key to safeguarding data."

Key Findings Examine Basic Security Tenets

Some of the findings may be contrary to widely held beliefs, such as that insiders are responsible for most breaches. Key findings include:

• Most data breaches investigated were caused by external sources. Thirty-nine percent of breaches were attributed to business partners, a number that rose five-fold during the course of the period studied.
• Most breaches resulted from a combination of events rather than a single action. Sixty-two percent of breaches were attributed to significant internal errors that either directly or indirectly contributed to a breach. For breaches that were deliberate, 59 percent were the result of hacking and intrusions.
• Of those breaches caused by hacking, 39 percent were aimed at the application or software layer. Attacks to the application, software and services layer were much more commonplace than operating system platform exploits, which made up 23 percent. Fewer than 25 percent of attacks took advantage of a known or unknown vulnerability. Significantly, 90 percent of known vulnerabilities exploited had patches available for at least six months prior to the breach.


• Nine of 10 breaches involved some type of "unknown" including unknown systems, data, network connections and/or account user privileges. Additionally, 75 percent of breaches are discovered by a third party rather than the victimized organization and go undetected for a lengthy period.
• In the modern organization, data is everywhere and keeping track of it is an extremely complex challenge. The fundamental principle, however, is quite simple -- if you don't know where data is, you certainly can't protect it.

The breaches investigated represent a broad spectrum of industries. The retail and food and beverage industries account for more than half of all cases investigated. By contrast, financial services -- an industry with great monetary assets that are also typically well-protected, especially when compared to other sectors -- accounted for 14 percent of breaches studied.

The study's findings show a marked increase in the number and type of international incidents. For example, attacks from Asia, particularly in China and Vietnam, often involve application exploits leading to data compromise, while defacements frequently originate from the Middle East. Internet protocol (IP) addresses from Eastern Europe and Russia are commonly associated with the compromise of point-of-sale systems.

"As the world becomes more interconnected through information technologies, as enterprises aggressively seek global partnerships and as the laws governing the handling and disclosure of such incidents mature, it is likely that this upward trend of international data breaches will continue," the study finds.

Pointing to the psychology behind breaches, the reports suggests that data compromise is the easiest, safest and most lucrative way to steal the information necessary to commit identity fraud. By breaking into restricted computer systems and compromising sensitive information stored within them, criminals are able to access systems that contain information on tens of thousands of victims versus just a handful through non-electronic means.

Making this crime even more attractive is the lucrative black market for stolen data. This social network enables criminals to work with one another to find vulnerable systems, compromise data and commit large-scale identity fraud. Within this network, the report finds, criminal conglomerates maintain access to hackers, fraudsters and other organized crime groups.

Simple actions, when done diligently and continually, can reap big benefits, the study notes. Key recommendations include:

• Align process with policy. In 59 percent of data breaches, the organization had security policies and procedures established for the system, but these measures were never implemented. Implement, implement, implement.
• Create a data retention plan. With 66 percent of all breaches involving data that a company did not even know was on their system, it's critical that an organization knows were data flows and where it resides. Identify data and prioritize its risk to the organization.
• Control data with transaction zones. Investigators concluded that network segmentation can help prevent, or at least partially mitigate, an attack. In other words, wall off data when and where appropriate.
• Monitor event logs. Evidence of events leading up to 82 percent of data breaches was available to the organization prior to actual compromise. Data logs should be continually and systemically monitored and responded to when events are discovered.
• Create an incident response plan. If and when a breach is suspected, the organization must be ready to respond, not only to stop the data compromise but to collect evidence that enables the business to pursue prosecution when necessary.
• Increase awareness. Only 14 percent of data breaches were discovered by employees of the victimized organization, even though employees are the first line of defense in safeguarding data. Educate them to be aware.
• Engage in mock-incident testing: Making sure employees are well-trained to respond to a breach. Run drills and test people's abilities, judgments and actions during a mock crisis.