Not Considering Insider Fraud A Top Security Priority Is A Costly Mistake

On average, organisations experience approximately one fraud event per week, according to information from the second annual Attachmate Corporation and Ponemon Institute survey, “The Risk of Insider Fraud,” released at RSA Conference 2013. However, only 44 percent of respondents say their organisation views insider fraud prevention as a top security priority, a perception which has declined since 2011. This misconception can prove costly: The average cost of a data breach in a 2011 study was $194 per lost or stolen record.

The insider fraud survey includes results from more than 700 individuals at leading global organisations. The survey reveals some alarming data security trends:

• On average, it takes 87 days to first recognise that insider fraud has occurred and more than three months (105 days) to get at the root cause of the fraud.

• Seventy-nine percent of respondents say that in their organisation a privileged user has or is very likely to alter application controls to access or change sensitive information and then reset the controls.

• According to 73 percent of respondents, an employee’s malfeasance has caused financial loss and possibly brand damage.

• Eighty-one percent say they already had an employee use someone else’s credentials to gain elevated rights or to bypass separation-of-duty controls.

“This data demonstrates the invisibility of employee actions across an enterprise,” said Larry Ponemon, chairman and founder of Ponemon Institute. “While organisations may have policies and procedures to thwart insider fraud, it doesn’t mean employees will remain compliant, particularly with the rise of Bring Your Own Device (BYOD) practices.”

Almost half (48 percent) of respondents say that BYOD has resulted in a significant increase in fraud risk and 77 percent of respondents say the lack of security protocols over edge devices presents a significant security challenge and risk.

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“Data security and insider threats continue to be a challenge for organisations, particularly as BYOD brings complexity to enterprise risk management,” said Christine Meyers, director of Attachmate’s enterprise fraud management solutions. “Next-generation enterprise fraud management solutions are able to correlate cross-channel activity, score risk and provide a screen-by-screen replay of what actually occurred. Add to that the proven deterrence factor that arises from being able to see and monitor use and abuse, and you can see why customers choose to deploy this technology for fraud detection.”

The study defined insider fraud as the malicious or criminal attacks perpetrated upon business or governmental organisations by employees, temporary employees and contractors. Typically, the objective of such attacks is the theft of financial or information assets, which include customer data, trade secrets and intellectual properties. Sometimes, the most dangerous insiders are those who possess strong IT skills or have access to an organisation’s critical applications and data.

“With this research, we want to reiterate that organisations are not immune,” said Meyers. “The threat of insider fraud is a growing risk that can result in tangible financial loss to businesses. And the longer an organisation takes to address it, the more costly it can become.”