Growing cybercrimes pose global threats to individuals and corporations

Indeed, cybercrime has become a separate, high-yielding business, comparable with other modern evils, such as human trafficking, including for prostitution and organ theft purposes, as well as illegal drug and arms trade. The craftiness and high level of education of the people behind cybercrime, whose intellectual creativity borders on ingenuity, have put this type of crimes into a special category. 

All these developments, experts say, differentiate the naughtiness of ‘Internet-hooligans’ of past years that saw hacking mainly as innocent pastimes from today’s cybercrimes that have turned into an entire industry with all the attributes of free-market relations: specific clients, suppliers of hacking infrastructure and a portfolio of services, beginning from comparatively legal web-hosting to sophisticated ones, such as stealing credit card data and others. 

“The craftiness and high level of computer education of the people behind cybercrime, whose intellectual creativity borders on ingenuity, have put this type of crimes into a special category.”

“Cybercrimes have become a business, whilst cybercriminals are no longer isolated individual amateurs,” said Tomer Teller, a security evangelist and researcher at Check Point Software Technologies. “These criminals now belong to well-structured organizations, often employing highly-skilled hackers to execute targeted attacks, many of whom receive huge wages for their efforts, depending on the region and nature of the attack.” 

According to other Internet security experts, the more information that is placed on the Internet, the more attractive it becomes for hackers and the more high-tech the tactic required for the attacks against it. “Today approximately one third, or about 2.3bln, of people on Earth use Internet, and this means more targets for attacks by cybercriminals, and hence more new victims,” – Victoria Baines, Europol adviser for anticybercrime strategies, noted. 

According to Europol’s data, such negative scenarios will continue to develop robustly, as different researches have shown that majority of users often entrust their important personal or other data to people or institutions they know little or nothing about. In this context, not only users’ personal or office computers are at risk, but also other more important objects of infrastructure, such as systems of managing companies or even municipal institutions or state apparatus. 

The accelerated growth of such hazardous trends was noted in researches conducted in 2011 by McAfee and Guardian Analytics, which said targeted and well-coordinated attacks were occurring daily and everywhere. John Lyons, the CEO of the International Cyber Security Protection Alliance, also shares this point of view. “For the last two years, almost all crucially important infrastructure objects all over the world have come under daily attacks by the organized-crime groups, including those being sponsored by governments.” 

“Cybercrime has become a separate, high-yielding business, comparable with other modern evils, such as human trafficking, including for prostitution and organ theft purposes, as well as illegal drug and arms trade.”

An unusual combination of several negative trends has further aggravated this already dreadful situation. One of these trends is that today those involved in this business — “fishing in the murky waters” of the Internet — are no longer the traditional classical “technical adventurers or young romantic idlers,” but influential trans-border investors, intending to get their shares of the multi-billion-dollar revenues being generated by this fast-growing intellectual products market. It is very difficult to catch and indict such “pseudo-investors” on charges of sponsoring the growth of cybercrimes, experts said. This is because the border between “harmful viruses” and “useful software” is similar to the boundary between drugs and poisons. The difference between the two substances is the level of dosage. 

Global damage from cyberattacks runs into billions 

A study of server logs by McAfee and Guardian Analytics showed that cyber-swindlers via hacking attacks on individuals, corporations and even states, were able to steal from bank accounts of individuals and financial corporations about $2.5bln in 2011. However, when this figure was extrapolated to all types of cybercrimes, the volume of global damage ran into $12.5bln, or about $5.5bln higher than the data for the previous year. 

English-speaking hackers topped the global rating of high-tech intellectual property crimes, controlling about 40% of the global hacking services market. Such a big share stems from the absolute globalization of English as the Internet’s default lingual franca. The “bronze medal,” valued at 18% of the world market, is held by Chinese hackers, thanks to the their country’s status of having the world’s largest population.

Located between these two groups with the “silver medal” in the infamous ranking is “Russian speaking cyberhunters” that have used high technologies and related mobile gadgets to defraud unsuspecting victims.  In the broadest sense of this term, hackers of Russian origin, earned “via their back-breaking labor” almost $4.5bln, which, in percentage terms, constituted almost 30% of total global cybercrimes. The experts here deemed it necessary to note that locally homebred Internet-criminals, that is hackers residing in Russia, generated over 50%, or about $2.3bln, of the $4.5bln gross total.  

Telecom firms and financial institutions are a profitable Klondike for cyber fraudsters

Due to their nature, as well as their high dependence on Internet and other innovation technologies, banks, other financial institutions, such as insurance companies, money transfer agencies, etc., as well as telecom companies are cyber-thieves’ easiest preys. 

“For the last two years, almost all crucially important infrastructure objects all over the world have come under daily attacks by the organized-crime groups, including those being sponsored by governments.”

Such negative trends are frequently reported by the companies operating in these industries. For example, according to the Russian mobile telecoms services giant, MegaFon, the company’s specialists processed over 100,000 cyber-fraud claims and different sorts of mobile thefts in first half of 2012 alone.  “In this period, MegaFon paid RUR22.5mln in compensations to its clients that fell victims to cyberfraud, a figure that was 12 times over the corresponding data for 2011,” Sergei Khrenov, director of MegaFon’s Fraud Prevention Department, noted. 

The situation in the bank industry is even worse, where the damage from cyber-attacks has risen to hundreds of millions of rubles in recent years. Thus, according to Artem Sychev, the head of Rosselkhozbank’s Data & Information Security Department, an average of 15-20 attacks are made on financial organizations’ distant banking systems (DBS) in Russia every day. It is sad to note that parts of these attempts are, sometimes, successful, leading to a loss of millions of rubles, according to other experts. Thus, according to Group-IB, cyber-fraudsters stole over RUR120mln from Russian banks’ clients in 2011 alone, whilst, according to the Internal Affairs Ministry, one band of hackers was able to steal over $150mln in 2011. 

According to the Russian Central Bank (CBR), the number of electronic banking transaction in the country averages 10mln per day. This figure is miniscule in comparison with the volumes of similar transactions in more developed countries, which means that the volume of electronic operations will grow further in Russia. In other words, there is no alternative to the DBS and other electronic payment facilities as these services are profitable for banks and convenient for clients. However, the level of security of such operations, though enormously higher than that of physical cash transactions, it is still lower than 100%. 

Guaranteeing full security of such transactions is a systemic problem that requires urgent solutions, according to experts. Today, the number of cyber-swindlers’ attacks on all banking transactions, including those settled via the DBS, is growing from year to year. This problem has become so critical, especially for the banking industry, that the Analysis without Borders International Bank Club recently organized a special Round Table, devoted to the searches for more reliable mechanisms of protecting of financial services from cyber-criminals. According to the Round Table discussion participants, this problem is further aggravated by the fact that the CBR is not really keen on monitoring the damage from cyber-related frauds, while the law enforcement agencies are able to trace only about 30% of all cyberattacks on the Russian banking system. 

To be fair, however, it should be noted that these state agencies have to work in what can be called “conditions of artificially created information vacuum.” This is because banks and other companies’ security services are usually reluctant to disclose crimes committed against them in order to avoid reputation risks, which, amongst others, could lead to possible loss of client confidence, which is fatal, especially for financial organizations. “Such behavior by banks can be understood, as they are very dependent on public opinion, and consequently, crimes, including cybercrimes, are often concealed by banks so as to avoid panic among clients and hence prevent bank runs,” HandyBank Board Chairman Sergei Chernomorov noted.

Diversification of goals of cyber-attacks threatens apocalypses to mankind 

The goals of cyberfraudsters are varied and multifaceted and continue to grow in complexity. Thus, according to Check Point’s recent survey report, about 65% of organizations that experienced targeted attacks said the hacker’s motivation was driven mainly by financial fraud, and resulted in business disruption and the loss of sensitive information, including intellectual property and trade secrets. The report, The Impact of Cybercrime on Businesses, also showed companies reporting an average of 66 new security attack attempts per week, with successful incidents costing businesses anywhere from $100,000 to $300,000. 

“Today, those involved in this business — “fishing in the muddle waters” in the Internet — are no longer the traditional classical “technical adventurers or young romantic idlers,” but influential trans-border investors.” 

Cybercriminals today are increasingly leveraging malware, bots and other forms of sophisticated threats to attack organizations for various reasons - from financial gain and disruption of business operations to data theft or attacks driven by political agendas. Regardless of motivation, new variants of malware are being generated on a daily basis, often targeting multiple sites and organizations to increase the likelihood of an attack’s initial success and the potential for threats to spread quietly throughout an organization 

An example of politically and/or ideologically motivated cybercrimes is the Group Anonymous’ ruthless attacks on global companies in 2011, including financial organizations, which, reportedly acting on U.S. Government’s secret order, had blocked the accounts of Julian Assange, the founder of the Internet project Wikileaks. Washington has expressed its discontent with the publication of its secret data by Wikileaks, which, among others, had strategically important military and diplomatic values. 

The threat of uncontrollable spread of extremely serious forms of cybercrimes is so high today that even Yevgeny Kaspersky, the owner of Kaspersky Laboratory, a Russia-based global antivirus company and one of the world’s most authoritative “computer viruses hunters,” compared high-tech-related crimes with infectious epidemics, noting that he was very scared by its sheer magnitude. “Today, cyberepidemics can have apocalyptic consequences for mankind, capable of changing the world the way we know it today,” he noted and went to compare cyber-attacks with weapons of mass destruction, especially the biological ones. 

Recently, Kaspersky Laboratory discovered an unprecedentedly powerful computer spy virus, codenamed the “Flame.” This harmful virus is able to capture traffic, steal data, including those simply displayed on monitors, as well as make records of ongoing conversastions. “Such virus, which can be easily used as a tool for attacks, is much more dangerous, since a lot of countries today have the capabilities to ‘infect warheads’ with this virus programmed with certain information or other parameters,” Kaspersky said. “Such cyber-weapons can replicate themselves and attack accidental victims anywhere all over the world. Indeed, as the Internet does not have borders, different infrastructure and projects with similar software systems can be attacked, say, for instance, electric power stations with similar software, in different regions of the planet.” 

The Russian ‘computer viruses hunter’ has outlined three possible scenarios of negative development and consequences of a cyber-related epidemic. This can be a total Internet blackout, individual attack on key infrastructural objects or on both simultaneously. “Unfortunately, there is no adequate protection against this sort of attacks in the world today,” Kaspersky noted, thus conceding not only mankind’s absolute vulnerability to this evil, but also its current inability to invent adequate measures to deal with it. 

Kaspersky sees the only way out in deepening international cooperation, which means that governments and all concerned individuals and organizations have to start speaking about these problems with another other more actively in order to find long-lasting solutions. “Otherwise, I’m afraid that all cyber-attacks going on today are just the beginning,” Kaspersky noted. “And, going forward, the situation will only become worse, if no adequate measures are found today. Then, I’m afraid this will be the end of the world as we know it today.”