Layer Seven Security

Three More Reasons for using Solution Manager to Secure SAP Systems from Cyber Attack

Layer Seven on August 13, 2014

Our recent article outlining the advantages of using SAP-delivered components versus third party software resonated strongly with customers seeking an effective and cost-efficient solution to address cyber threats impacting their SAP systems. The article examined the five key benefits of a Solution Manager-based strategy that included lower costs through the avoidance of licensing and maintenance fees for third-party software, the ability to configure custom security checks to address system, company or industry-specific risks, alerting for critical security events, detailed reporting driven by SAP Business Warehouse, and the availability of SAP support. The article presented a compelling argument for selecting SAP Solution Manager over the host of competing solutions offered by independent vendors.

The benefits delivered by Solution Manager stem from the depth and volume of security-related data that is continuously pulled from managed systems into the platform. Solution Manager lays at the core of SAP system landscapes and therefore occupies a central vantage point to oversee the security of connected systems. In contrast, third party software solutions are not embedded within SAP landscapes to the same extent and therefore lack the connectivity and range of Solution Manager.

Aside from the advantages mentioned above, there are three other benefits delivered by Solution Manager for security monitoring. The first is the availability of security dashboards. SAP delivers three security apps through the standard WebDynpro dashboard application in Solution Manager, located in the Cross-Application section for dashboard apps. This includes the Security Overview app, which summarizes security policy compliance by system across landscapes, the Security Details app, which displays compliance levels for software, configuration and user categories, and finally, the Security List app, which conveys security compliance levels for every SAP System ID. Dashboards apps can be automatically refreshed as often as every 5 minutes to provide security information in near real-time.

The second is Solution Manager’s ability to deliver detailed metrics for analyzing changes. Like third party solutions, components such as Configuration Validation in Solution Manager are able to pinpoint differences between actual and recommended security settings. However, Solution Manager goes a step further by enabling users to drill-down into the underlying changes that created risks identified by security scans. This is performed through Change Analysis which provides timestamps for changes in managed systems and the original values for instance, profile or other parameters before the changes were implemented.

The third is Solution Manager’s flexibility to support security policies aligned to any compliance framework. This includes not only familiar frameworks such as SOX and PCI DSS but requirements that are unique to specific industries or sectors. The transparent security checks performed by Configuration Validation can be customized for all regulatory, statutory and other forms of compliance standards.

Organizations do not have to look far for the solution to remove security vulnerabilities in their SAP systems. Most are delivered with standard license agreements by SAP and can be leveraged immediately at zero cost. Tools such as Configuration Validation provide a powerful and cost-effective alternative to third party solutions. They are also fully supported by SAP. You can learn more about SAP Configuration Validation here or contact Layer Seven Security to unlock the value of your Solution Manager systems.

Cybersecurity Insurance: Is it Worth the Cost?

admin on June 26, 2014

According to the most recent annual Cost of Cyber Crime Study by the Ponemon Institute, the average cost of detecting and recovering from cyber crime for organizations in the United States is $5.4 million. Median costs have risen by almost 50 percent since the inaugural study in 2010. The finding masks the enormous variation of data breach costs which can range from several hundred thousand to several hundred million dollars, depending on the severity of the breach. A growing number of insurance companies are offering cyber protection to enable organizations to manage such costs. This includes traditional carriers in centers such as London, New York, Zurich and elsewhere, as well as new entrants targeting the cybersecurity insurance market. Carriers in the latter category should be carefully veted since some new entrants have been known to offer fraudulent policies in order to exploit the growth in demand for cyber insurance.

Cybersecurity insurance has been commercially available since the late 1970s but was limited to banking and other financial services until 1999-2001.  It became more widespread after Y2K and 9/11. Premiums also increased after these events and carriers began to exclude cyber risks from general policies. More recently, the dramatic rise in the threat and incidence of data breaches has propelled cybersecurity into a boardroom issue and led to a growing interest in cyber policies from organizations looking to limit their exposure.

A 2011 study performed by PriceWaterhouseCoopers revealed that approximately 46% of companies possess insurance policies to protect against the theft or misuse of electronic data, consumer records, etc. However, this is contradicted by the findings of 2012 survey by Chubb Group of Insurance Companies which revealed that 65 percent of public companies forego cyber insurance. The confusion may be due to a general lack of awareness among survey responders of the exact nature of insurance coverage. Many responders appear to be under the impression that cyber risks are covered by general insurance policies even though this is no longer the norm.

The cybersecurity insurance industry is highly diverse with carriers employing a plurality of approaches. Some offer standardized insurance products with typically low coverage limits. Others provide customized policies tailored for the specific needs of each client. Furthermore, the industry is evolving rapidly to keep pace with evolving threats and trends in cybersecurity.

Policy premiums are driven primarily by industry factors. E-commerce companies performing online transactions while storing sensitive information such as credit card data are generally considered high risk and are therefore subject to higher premiums. Health institutions hosting data such as social security numbers and medical records are also deemed high risk.

Premiums typically range between $10,000 to $40,000 per $1 million and provide up to $50 million in coverage. However, most standard policies only provide coverage for specific third-party costs to cover losses incurred by a company’s customers or partners. This includes risks related to unauthorized access and the disclosure of private information, as well as so-called conduit injuries that cause harm to third party systems.

Polices that provide coverage for first-party areas such as crisis management, business interruption, intellectual property theft, extortion and e-vandalism carry far higher premiums and are therefore relatively rare. This limits the appeal of cybersecurity insurance and ensures organizations need to self-insure for such risks for the foreseeable future. The situation is unlikely to improve until actuarial data is more widely available and shared between carriers for cybersecurity risks. This may require the establishment of a federal reinsurance agency and legislative standards for cybersecurity.

Carriers are unlikely to offer full cover for all first and third party costs arising from security breaches. This is due to the moral hazard associated with such coverage. Organizations that completely transfer cyber risk have no incentive to invest in preventative and monitoring controls to manage security risks. However, most carriers have exclusions for breaches caused by negligence. Other exclusions include coverage for fines and penalties, often due to regulatory reasons.

Aside from industry considerations, other factors that drive premiums for cybersecurity insurance are risk management cultures and practices in organizations. Carriers often assess cybersecurity policies and procedures before deciding premiums. Organizations that adopt best practices or industry standards for system security are generally offered lower premiums than those that do not. Therefore, insurers work closely with clients during the underwriting process to measure the likelihood and impact of relevant cyber risks. This includes consideration for management controls. Carriers that decide not to assess the cybersecurity practices of prospective clients tend to compensate by including requirements for minimal acceptable standards within policies. These clauses ensure that carriers do not reimburse organizations that failed to follow generally-accepted standards for cybersecurity before a security breach. Cybersecurity standards for SAP systems are embodied in benchmarks that are aligned to security recommendations issued by SAP. This includes the SAP Cybersecurity Framework outlined in the white paper, Protecting SAP Systems from Cyber Attack.

Cybersecurity insurance is most valuable for organizations with mature cyber risk cultures including effective standards and procedures for preventing, detecting and responding to cyber attacks. It enables such organizations to transfer the risk of specific costs arising from security breaches that are more cost-effectively covered by third-party coverage rather than self-insurance. Cybersecurity insurance is not a viable option for companies with weak risk management practices. Even if carriers were willing to insure such high-risk organizations, the premiums are likely to outweigh the cost of self-insurance. Furthermore, the likelihood that organizations would be able to collect upon such policies is low.

M-Trends, Verizon DBIR & Symantec ISTR: Detecting and responding to cyber attacks has never been more important

admin on April 28, 2014

The release of three of the most important annual threat intelligence reports earlier this month confirmed that 2013 was an explosive year for cybersecurity. All three reports point to rising incidences of cyber attack, increasing sophistication of attack vectors and a growing diversity of threat actors and targets.

The first of the reports is entitled M-Trends, compiled by the security forensics company Mandiant, now owned by FireEye. M-Trends is based on the analysis of incidence response data from organisations across 30 industries. While the analysis detected a slight improvement in the average number of days taken by organisations to detect a network breach, there was no discernable improvement in the ability of organisations to detect breaches without outside assistance. Only 33 percent of breaches are discovered by internal resources.

The analysis also revealed that cybercriminals are deploying a wider variety of attack methodologies against targets. Traditional approaches involve the detection and exploitation of vulnerabilities in Web applications which enable attackers to move laterally through connected systems after a successful compromise. According to M-Trends, attackers are shifting focus from Web applications to exploiting workstations and other systems infected with botnets and Trojans. These tools are designed to create backdoors for the installation and propagation of more powerful  forms of malware designed to seek out and extract sensitive data.

The report notes that sensitive data goes beyond proprietary intellectual property. State-sponsored attackers target a wide variety of information sources to understand how businesses work including emails, procedural and workflow documents, plans, budgets, organisational charts, and meeting agendas and minutes.

M-Trends concludes that the list of potential targets has increased, and the playing field has grown. Threat actors are not only interested in seizing the corporate crown jewels, but are also looking for ways to publicize their views, cause physical destruction, and influence decision makers.

The second report is also the most long-standing and well-known. The Verizon Data Breach Investigations Report (DBIR) is now in its eighth year and includes contributions from organisations such as the U.S Secret Service, US-CERT, Europol and the Council on Cyber Security. The 2014 DBIR analyzed over 1300 confirmed data breaches and 63,000 security incidents in 95 countries.

The highest number of security incidents analyzed by the DBIR affected organizations in the financial, retail and public sector. This is unsurprising since such organizations tend to store or process financial and other sensitive information. However, the DBIR did not observe any industry that was not impacted by security incidents that led to confirmed data losses. This underscore the DBIR finding that “everyone is vulnerable to some type of event. Even if you think your organization is at low risk for external attacks, there remains the possibility of insider misuse and errors that harm systems and expose data. To illustrate, 30% percent of security incidents impacting manufacturing companies can be classified as acts of cyber espionage. In comparison, less than 1 percent of incidents in public sector organisations are caused by cyber espionage. However, public sector organisations experience three times as many incidents of insider abuse as manufacturing companies.

The third and final threat intelligence report released in April was Symantec’s Internet Security Threat Report which revealed a 62 percent year-on-year increase in data breaches with 8 breaches exposing more than 10 million identities each. According to the report, the industries most at risk of a targeted attack are mining, government and manufacturing. The likelihood that organisations in such industries will experience an attack are 1 in 2.7, 1 in 3.1 and 1 in 3.2 respectively.

The report also revealed that there were more zero-day vulnerabilities in 2013 than other year on record. The number of zero-day vulnerabilities discovered last year were 61 percent higher than the year before and more than the previous two years combined.

The report recommends multiple and mutually-supportive defense-in-depth strategies to guard against single-point failures. It also recommends continuous monitoring and automatic alerting for intrusion attempts, as well as aggressive updating and patching. These recommendations are echoed by both M-Trends and the DBIR. According to the former, organisations require “visibility into their networks, endpoints and logs. Organisations also need actionable threat intelligence that identifies malicious activity faster.

Layer Seven Security enable SAP customers to meet this challenge by hardening every component of the SAP technology stack for defense in depth including underlying networks, databases and operating systems. We also configure comprehensive network, system, table and user logs to enable organisations to track, identify and respond to cyber attacks. Finally, we unlock standard, powerful security monitoring mechanisms in SAP Solution Manager to automatically detect and alert of potential malicious activity.

Trustwave Survey Reveals that IT Professionals are Feeling the Pressure of Board Level Scrutiny over Cyber Security

admin on March 25, 2014

The rise in the rate and sophistication of cyber attacks has predictably fuelled the pressure on security resources. However, the precise complexion and source of the pressure was largely unknown until the recent release of the Trustwave Security Pressures study. The study examines the threats most concerning to security professionals and the preferred responses.

The results of the study are based on survey responses from over 800 decision makers in the US, UK, Canada, and Germany including CIOs, CISOs, and IT Directors / Managers. Almost 60 percent of respondents were IT/ Security Directors or higher and 75 percent represented organisations in North America.

Over 50 percent of IT professionals experienced more security-related pressures in 2013 than the year before and almost 60 percent expect the pressure to grow in 2014. The source of the greatest pressure is the threat of external attack through targeted malware. The threat of data loss arising from a successful network and system breach also ranked highly as a stressor. Only 5 percent of respondents believe their organisations are not susceptible to attack.

The study revealed that owners, boards of directors and C-level executives exert the most pressure on IT professionals. This reflects the high visibility and growing board-level presence of security concerns. Cyber risk is a common and recurring subject on board agendas. According to Trustwave, executives and board members are increasingly demanding a deeper explanation from IT professionals on security postures and often display a lack of confidence in IT risk management strategies. This wariness stems partly from the seeming inability of conventional security products and solutions to stem the tide of cyber attack and data loss.

The study also revealed that respondents struggle with the complexity of security solutions, shortages in dedicated resources and controlling capital and operational budgets.

The study recommends a number of specific actions to relieve the pressure. The first involves accepting the growing level of scrutiny from boards and other sources over security practices and managing security programs as strategic business initiatives with regular reporting to executive management. Other recommendations include augmenting in-house security expertise by partnering with outside security consultants, performing periodic risk assessments and penetration tests, focusing upon securing external-facing systems, controlling third party access and avoiding over-reliance upon security tools that provide a false sense of security.

Layer Seven’s Cybersecurity Framework delivers a comprehensive strategy to protect SAP systems from cyber attack and data breach. The framework provides a series of actionable recommendations to alleviate the growing pressure on IT professionals while avoiding the need for capital expenditure in security software. The framework equips security professionals with the insight and expertise required to safeguard mission-critical SAP resources from cyber risks. Learn more.

A First Look at the U.S Data Security and Breach Notification Act

admin on February 11, 2014

On January 30, members of the U.S Senate and House of Representatives introduced a new bill intended to enforce federal standards for securing personal information and notifying consumers in the event of a data breach. Sponsored by leaders of the Senate Commerce, Science and Transportation Committee, the Security and Breach Notification Act of 2014 would require the Federal Trade Commission (FTC) to develop and enforce nationwide security standards for companies that store the personal and financial information of consumers. According to Committee Chairman Jay Rockefeller, “The recent string of massive data breaches proves companies need to do more to protect their customers. They should be fighting back against hackers who will do whatever it takes to exploit consumer information.”

If enacted, the measures introduced by the Bill would direct the FTC to develop robust information security measures to protect sensitive data from unauthorised access and exfiltration. The FTC would also be empowered to standardize breach notification requirements across all states to ensure that companies need only comply with a single law. The law would be enforced jointly by the FTC and state attorneys. Civil penalties for corporations and criminal penalties for corporate personnel would be imposed for violations of the law. The latter would include imprisonment for up to five years. Unlike HIPAA and SEC Disclosure Guidelines, the requirements of the Act are not limited to health organisations or publically listed companies. They are applicable equally to both private and public organisations that store customer information across all industries and sectors. They are also applicable to data entrusted to third party entities.

The proposed Federal data security and breach notification standards are firmly supported by the FTC. During a speech delivered to a privacy forum on December 12 2013, FTC Chairperson Edith Ramirez supported the role of the FTC as an enforcer of consumer data protection standards. The organisation has aggressively pursued companies that have suffered data breaches for alleged unfair and deceptive trade practices and imposed fines of up to $10 million. However, FTC rulings are often challenged on the grounds that the organisation lacks a clear legal mandate. The Data Security and Breach Notification Act would provide the mandate required by the FTC against clearly-defined standards for data protection.

This includes standards for identifying and removing vulnerabilities in systems that contain customer information and monitoring for breaches to such systems as required by sections 2 (C) and (D) of the Act. To learn about vulnerabilities effecting SAP systems and implementing logging and monitoring to detect potential breaches in SAP applications and components, download our white paper Protecting SAP Systems from Cyber Attack. The paper presents a framework of 20 controls across 5 objectives to safeguard information in SAP systems from internal and external threats.

Measuring the Risks of Cyber Attack

admin on January 23, 2014

Most studies that examine the impact of cyber attack tend to focus on a combination of direct and indirect costs. Directs costs include forensic investigations, financial penalties, legal fees, hardware and software upgrades, etc. The approach is typified by the annual Cost of Data Breach Study performed by the Ponemon Institute, now in its eighth year. The most recent study examines the costs incurred by 277 companies in 16 industry sectors from 9 countries. According to the study, average data breach costs per organisation range between $1.1M – $5.4M for the selected countries. Estimates include losses related to reputational harm, lower sales, the loss of intellectual property, and other forms of indirect costs, which can account for as much as 68 percent of the total cost of a data breach.

Since indirect costs are far harder to accurately measure than direct costs and yet are proportionally more significant than direct costs, estimates for the average cost of a data breach have a high margin of error. Therefore, the actual costs incurred by organisations that suffer a data breach may be far higher or lower than the estimates provided by official studies.

A recent joint study performed by McKinsey and Company and the World Economic Forum presents a very different perspective on the risks of cyber attack. The results of the study are published in the report Risk and Responsibility in a Hyperconnected World, released earlier this week. It examines the global impact of cyber attacks and highlights risks often overlooked by conventional studies that focus on narrow definitions of direct and indirect costs. This includes opportunity risks, especially in the areas of cloud computing, data analytics and mobility. According to the study, such technological trends could create $10 trillion – $20 trillion in value for the global economy by 2020. Cyber risks lead to lower levels of trust and slower rates of adoption for cloud, big data and mobile technologies. The net result is that the risk of cyber attacks could lead to as much as $3 trillion in lost productivity and growth if it is not effectively managed before the end of the decade.

The study surveyed over 250 industry leaders across 7 sectors and 3 regions. 65 percent of respondents rated malicious external and internal attacks as the most likely risk to have a negative strategic impact upon their business. 69 percent believe that the sophistication or pace of attacks will continue to outperform the ability of institutions to defend such attacks, in spite of the fact that global spending on cyber security is expected to rise from $69 billion in 2013 to over $123 billion in 2020.

The study presents a proactive roadmap to build public and private sector capabilities designed to address cyber risks and accelerate innovation and growth. The roadmap includes prioritizing information assets based on business risks, scaling security efforts based on the importance of assets, integrating security into every area of technology from development to decommissioning, as well as business operations, deploying active defences to uncover attacks, continuous testing and security awareness training.

Three Parallels between the POS Breach at Target Corp. and Vulnerabilities in ERP systems

admin on December 20, 2013

The decision of the Office of the Comptroller at the U.S Department of Treasury to recognize cyber threats as one of the gravest risks faced by organisations today appears to be vindicated by the disclosure of an unprecedented data breach at Target Corporation shortly after the release of the Comptroller’s report. Specifics of the breach may not be known until the completion of an investigation currently underway by a forensics firm hired by Target to examine the incident. However, early reports suggest that the event may be one of the most devastating data breaches in recent years. According to a statement released by Target yesterday, approximately 40 million credit and debit card accounts may have been impacted between Nov. 27 and Dec. 15, 2013. The breach appears to have involved all of Target’s 1800 stores across the U.S. Based on the current average of $200 per compromised record, some estimates have placed the damage of the breach at $8 billion, almost three times the company’s net earnings in 2012.

The significance of the breach is related not only to the volume of records that have may have been compromised, but the type of data believed to have been extracted from Target. This includes sensitive track data stored within the magnetic stripe of payment cards. The card numbers, expiration dates and verification codes obtained through the track data could enable the perpetrators of the crime to create and sell counterfeit payment cards. There are three primary methods for compromising track data in retail scenarios. The first involves targeting switching and settlement systems. These systems are usually heavily fortified and traffic is commonly encrypted. The second entails the use of card skimmers. However, it is highly unlikely that skimmers could have been successfully installed across Target’s nationwide network of stores without detection. Therefore, the mostly likely method used by the attackers to obtain track data in such large volumes was through the compromise of the software that processes card swipes and PINs within Point-of-Sale (POS) systems at Target. Unfortunately, POS systems are a neglected area of information security, often regarded as little more than ‘dumb terminals’. This point of view could not be further from the truth. Today’s POS systems are sophisticated appliances that often run on Linux and Windows platforms. Furthermore, readily-available software development kits (SDK) for POS systems designed to enable developers to rapidly deploy applications for such systems could be abused to build dangerous forms of malware. This is the most probable cause of the breach at Target. Herein lays the first parallel between POS and ERP systems: although both process large quantities of sensitive information and lay at the core of system landscapes, security efforts are rarely equal to the strategic importance of such systems or aligned to the risks arising from their architecture.

The second parallel relates to the method used at Target to access and install the malware within the POS systems. This could only have been possible if the attackers were part of the software supply chain. Therefore, they mostly took advantage of some form of insider access. The counterpart in ERP systems is the often blind trust placed by organisations in third party developers, consultants and system administrators with broad access privileges.

The final parallel is the use of malware specifically aimed at business systems rather than individuals or consumers. Both POS and ERP systems are witnessing a surge in targeted malware. Systems such as SAP have always contended with this threat. One of the earliest known Trojans for SAP was discovered in 2003: KillSAP targeted SAP clients and, upon execution, would discover and replace SAPGUI and SAPLOGON files. Today’s malware is capable of far more destructive actions such as key logging, capturing screenshots, and attacking SAP servers through instructions received from remote command and control servers. The recently discovered Carberp-based Trojan is an example of such a threat. You can learn more about the risks posed by this Trojan at the Microsoft Malware Protection Center.

New malware variant suggests cybercriminals are targeting SAP systems

admin on November 7, 2013

Security researchers at last week’s RSA Europe Conference in Amsterdam revealed the discovery of a new variant of a widespread Trojan program that has been modified to search for SAP systems. This form of reconnaissance is regarded by security experts as the preliminary phase of a planned attack against SAP systems orchestrated by cybercriminals. The malware targets configuration files within SAP client applications containing IP addresses and other sensitive information related to SAP servers and can also be used to intercept user passwords. Read More

The program is adapted from ibank, a Trojan that is most well-known for targeting online banking systems. Ibank is one of the most prevalent Trojans used in financial attacks, based on number of infected systems. It is often deployed together with the Zeus Trojan to harvest system credentials and is assigned a variety of names including Trojan.PWS.Ibank, Backdoor.Win32.Shiz, Trojan-Spy.Win32.Shiz and Backdoor.Rohimafo. Once installed, the program operates within whitelisted services such as svchost.exe and services.exe and is therefore difficult to detect. It also blocks well-known anti-virus programs. Ibank installs a backdoor on infected systems, enabling remote control of infected hosts. It also provides spying functions and the ability to filter or modify network traffic and change routing tables.  The program uses a wide number of APIs to log keystrokes, capture logon credentials, identify, copy and export files and certificates, and perform other malicious activities.

SAP customers are strongly advised to secure SAP installations against the threat of such an attack. Layer Seven Security use SAP-certified software to identify and remove vulnerabilities that expose SAP systems to cyber-attack. This includes misconfigured clients, unencrypted interfaces, and remotely accessible components and services targeted by attackers. Contact Layer Seven Security to schedule a no-obligation proof-of-concept (PoC).  PoCs can be performed against up to three targets selected from a cross-section of SAP systems and environments. Read More

Organisations are not effectively addressing IT security and compliance risks according to accounting professionals

admin on August 27, 2013

The results of the 2013 Top Technology Initiatives Survey revealed that securing IT environments against cyber attack and managing IT risks and compliance are rated as two of the three greatest challenges in technology by accounting professionals in North America. The survey was performed jointly by the AICPA and CPA, the largest accounting organisations in the United States and Canada. The survey sampled approximately 2000 members from the public accounting, business and industry, consulting, government and not-for-profit sectors. Members of both the AICPA and CPA placed securing the IT environment as the second highest priority for organisations in the area of information technology. Managing IT risks and compliance was ranked third by AICPA members and fourth by CPA members.

U.S respondents expressed average confidence levels of just 51 percent in organisational initiatives designed to manage IT security and 47 percent in initiatives addressed at managing IT and compliance risks. Confidence levels have fallen drastically in 2013 due to the wave of recent well-publicized data breaches. In 2012, U.S confidence levels for securing IT environments and managing IT risk and compliance were 62 and 65 percent. However, according to the Chair of the AICPA’s Information Management and Technology Assurance (IMTA) Division, The decline in confidence levels may mean professionals are making more knowledgeable assessments of the ability of organizations to achieve technology goals. This more realistic assessment indicates that the goals may be more challenging than originally thought, and that organizations must have the focus, commitment and drive to achieve them.

Layer Seven Security assist organisations worldwide to identify and remove vulnerabilities that expose SAP systems to cyber attack and impact the ability to comply with the requirements of IT control frameworks. To learn how we can assist your organisation manage SAP risks and stay compliant, contact Layer Seven Security.

Lloyds 2013 Risk Index: Cyber Risk Rated as the Third Most Significant Risk by Board Executives

admin on July 17, 2013

The recent wave of sophisticated and targeted data breaches has led global business leaders to recognize cyber risk as one of the most significant threats faced by corporations today. According to the Lloyds 2013 Risk Index released this week, “Cyber security now sits squarely towards the top of the agenda for boards around the world”.

The Index is based on a global survey of almost 600 C-suite and board level executives performed by Ipsos MORI, a leading market research company. Respondents represented both small companies with revenues below $499M and larger organizations with revenues above $500M. They were drawn from a variety of geographic zones including Asia-Pacific, Europe and North America.

Respondents were asked to rate risk categories and specific risks within each category according to corporate risk priorities and degree of business preparedness to manage risks. Cyber risk is rated higher by respondents than the risks of inflation, legislative and regulatory changes, changes to the cost and availability of credit, climate change and failed investments. The only two risks rated higher on the index than cyber security are taxation and the loss of customers.

As expected, smaller companies reveal a low level of risk preparedness. However, large organizations appear to over-estimate their ability to deal with cyber risks that include code injection, denial of service and Web-based attacks. Although insurers offer a suite of products to deal with the costs related to data breaches including forensic analysis and public relations services, the report concludes that preventative measures provide the greatest degree of protection against cyber risks. It references the 2012 study by the Ponemon Institute that places the average cost of a data breach at US$ 8.9M based on an analysis of 56 reported breaches. According to the study, data breach costs range between US$1.4M and $US 46M.