Cyber-Attacks Digitization Entails Risks: In the Sights of Hackers

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Cyber-attacks on companies are increasing worldwide. Hackers are particularly targeting businesses that interconnect their machines, devices, and business processes. Therefore, investing in cyber-security is worthwhile.

It is the largest ransom amount hackers have ever demanded after an attack on a company: $50 million. In July 2020, the hacker group REvil targeted the American software manufacturer Kaseya. The multimillion-dollar demand came after the hackers paralyzed Kaseya's systems—and, as a result, shut down thousands of other companies that relied on the American firm's software.

Hackers have become the mafia of the digital age. They block systems, steal sensitive data, and extort money. They no longer operate as individuals in backrooms but as professionally organized groups equipped with cutting-edge technology. Their targets include international corporations as well as medium-sized and small businesses.

IoT Applications Are Affected By Security Vulnerabilities

Today, any business can become a target for hackers. This is especially true for companies that fully digitalize their operations. In these businesses, devices, machines, and computers frequently communicate autonomously with one another. Alongside the many advantages of digitalization, the risk of cyberattacks also increases. Even a single device connected to a network via the internet can cause significant damage.

This is illustrated by an example from Las Vegas: cybercriminals hacked the supposedly well-secured finance department of a casino. The culprits were the fish in an aquarium—or more precisely, the aquarium's internet connection. It had an application that fed the fish and monitored water quality via an internet connection. This system contained a security vulnerability through which the hackers accessed the network.

The aquarium is not an isolated case. Worldwide, millions of web-based devices—so-called "Internet of Things" (IoT) applications—are affected by security vulnerabilities, according to researchers at the U.S. security firm Forescout. In 2020, they identified the 33 most common vulnerabilities under the name "Amnesia: 33." They found that in about half of all cases examined, IoT devices such as cameras, sensors, smart light switches, barcode scanners, printers, or audio systems were affected.

Industrial companies are increasingly using IoT devices. In the era of Industry 4.0, the Internet of Things is increasingly connecting operational processes in the production hall with IT. Digital technologies have become integral to industrial companies. They are embedded in the control of machines and systems, in monitoring systems, and even in building technology. This means the systems, sensors, and software of all devices and machines communicate over shared networks. As a result, many new interfaces are created, providing attack surfaces for cyberattacks.

IoT Devices Are Popular Targets for Hackers

When it comes to security, IoT devices are particularly vulnerable to weaknesses because they are online around the clock, often poorly maintained, and rarely monitored. A study by the U.S. software company Symantec illustrates what this means: it concludes that today two-thirds of all internet-enabled devices use usernames like "admin" and default passwords like "12345." Additionally, updates are often neglected for devices such as printers.

Such vulnerabilities play into the hands of hackers. For industrial companies increasingly using IoT devices as part of their digitalization efforts, these security gaps can have serious consequences:

• Production downtime: If cybercriminals gain access to a connected manufacturing plant, they can install malware and halt production. Until the affected device is identified, downtime occurs due to unavailable services.
• Theft of intellectual property: Hackers steal patents and intellectual property. If they sell this data on the darknet, it can cause significant financial damage to the company.
• Exposure of sensitive data: Cybercriminals search for critical data that they can publish. Companies with sensitive personnel data are particularly at high risk of incurring financial and reputational damage, along with potential legal consequences.

The examples show: The vulnerability of companies is significant. That's why cyber-security is becoming increasingly indispensable for businesses. However, while it is clear to a company's security officers that protection against physical intruders is necessary, many businesses often lack effective digital security barriers.

Simple Tactic: First Infiltrate the System, then Extort

If digital barriers are missing, hackers have an easy time extorting money through their actions. They proceed as follows:

Step 1: Infiltration

The first step for cybercriminals is to choose their target. Once identified, they attempt to infiltrate the selected company's network. Most often, hackers send phishing emails to employees to achieve this. A study by the international cybersecurity company Proofpoint reveals that two-thirds of the surveyed companies in Germany, France, the UK, Australia, Japan, and the USA were affected by phishing attacks in 2020.

Phishing emails usually contain a link or a file. If an employee clicks on it, malware is silently downloaded onto the computer—allowing the attackers to infiltrate the company network. Once inside, they search for valuable data they can use to blackmail the company. They are particularly interested in sensitive customer data, intellectual property, or other confidential documents.

Step 2: Extortion

Often, attackers extract sensitive data from the company's network, encrypt it, and then demand a ransom. If the company pays, the blackmailers provide software that allows the data to be decrypted. As noted in the latest report from the Swiss National Cybersecurity Center, the extortionists are becoming increasingly audacious: many of them deploy encryption Trojans, also known as ransomware. To apply pressure on their victims, cybercriminals even resort to phone calls. They threaten to inform journalists about security vulnerabilities in the company's network or to publish sensitive data on data leak sites.

Such reprisals seem to affect victims: According to the international study by Proofpoint, over half of the extorted companies paid the ransom in 2020 to regain access to their own systems and data.

Even Simple Protective Measures Can Help

To protect against cyber-attacks, there are some measures that medium and small businesses can implement without high expenses and with minimal effort:

• Increase awareness: Training is important so employees can better recognize phishing emails and avoid opening them. This awareness effort is needed across all areas of a company to ensure the safe handling of corporate data.
• Adhere to security standards: What sounds obvious is not always the case, even in large companies. Many employees often use the same password for years. This makes devices easier to hack.
• Conduct a risk analysis: An analysis makes digital security vulnerabilities visible. Such an analysis can be particularly useful for companies whose IT networks have grown organically, as cybersecurity is often not taken into account from the outset during the growth process. Based on this, a company can then develop a protection concept (see box "Security in the Smart Factory").
• Cyber-security is a top management responsibility: To implement security measures across all business processes, a strong commitment from top management is required. They should make the issue a part of the company culture.

Ensuring Security Together With Everyone

Effective digital security barriers are essential for every company—this is evident from the alarming rise in cyberattacks. In the new reality of cybercriminal threats, it is crucial for businesses to develop a digital security concept that reliably addresses the risks from the internet. This especially includes ensuring that all employees are aware of the dangers and act cautiously as a result.

Nevertheless: There is no such thing as 100% security against attackers. Companies should also be aware of this. Instead, it is about establishing the necessary security barriers in tandem with technological advancement on their path to digital operations.

Companies in Industry 4.0 can achieve this by focusing not only on an internal cultural shift toward greater security awareness but also on prioritizing security in external decisions. This means, on one hand, businesses should take cybersecurity factors into account when selecting their partners. On the other hand, IoT manufacturers must integrate cybersecurity into the development of their solutions. Smart networking will only be successful if, in addition to performance, the protection of the digital infrastructure is ensured.

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