# Cybersecurity Incident Data Shows Need for Customized,Enterprisewide Plans to Combat Network Intrusions
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2017-05-10
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: BakerHostetler 2017 Data Security Incident Response Report
Meta Description: Learn from BakerHostetler's report about cyberthreats demanding attention from boardroom to front-line employees. Stay informed and prepared for cyber
URL: https://financedigest.com/cybersecurity-incident-data-shows-need-for-customizedenterprisewide-plans-to-combat-network-intrusionshtml

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_BakerHostetler’s 2017 Data Security Incident Response Report confirms that_ cyberthreats demand attention from the boardroom down to front-line employees

Ransomware gains ground; phishing/hacking/malware remains most prevalent threat

The **BakerHostetler 2017 Data Security Incident Response Report** highlights the critical need for senior executives in all industries to understand and be ready to tackle the legal and business risks associated with cyberthreats and to have enterprisewide tactics in place to address intrusions before they happen.

The report provides a broad range of lessons to help executives identify risks, appraise response metrics and apply company-specific risk mitigation strategies based on an analysis of more than 450 cyber incidents that BakerHostetler’s [Privacy and Data Protection team](https://www.bakerlaw.com/PrivacyDataProtection) handled last year. The firm’s experience shows that companies should be focused on the basics, such as education and awareness programs, data inventory efforts, risk assessments, and threat information sharing.

[Theodore Kobus](https://www.bakerlaw.com/TheodoreJKobusIII), leader of the Privacy and Data Protection team, said, “Like other material risks companies face, cybersecurity readiness requires an enterprisewide approach tailored to the culture and industry of the company. There is no one-size-fits-all approach.”

**Why incidents occur**

Phishing/hacking/malware incidents accounted for the plurality of incidents for the second year in a row, at 43 percent – a 12 percentage [point jump](https://www.financedigest.com/traders-ramp-up-bets-on-75-basis-point-ecb-sept-hike-bond-yields-jump.html "Traders ramp up bets on 75 basis-point ECB Sept hike, bond yields jump") from a year earlier. The only category for which phishing/hacking/malware was not the most common incident cause was finance and insurance, where employee action/mistake was the top reason.

Ransomware attacks – where malware prevents or limits users from accessing their system until a ransom is paid – have increased by 500 percent from a year earlier, according to [industry research](https://www.financedigest.com/encapsulated-citric-acid-market-industry-research-segmentation-key-players-analysis-and-forecast-to-2029.html "Encapsulated Citric Acid Market Industry Research, Segmentation, Key Players Analysis and Forecast to 2029"). The BakerHostetler [report details](https://www.financedigest.com/diabetic-foot-ulcers-and-pressure-ulcers-market-revenue-status-and-outlook-2016-2024-detailed-in-new-research-report.html "Diabetic Foot Ulcers and Pressure Ulcers Market Revenue Status and Outlook 2016-2024 Detailed in New Research Report") the typical ransomware scenario and the challenges that such incidents present. “Having a regularly scheduled system backup and a bitcoin wallet to pay a ransom will help with [operational resiliency](https://www.financedigest.com/true-operational-resilience-must-include-investing-in-esg.html "True operational resilience must include investing in ESG"). Ransomware is not likely to go away, and incidents will probably increase over the [short term](https://www.financedigest.com/liquidity-ratios-assessing-a-companys-short-term-financial-health.html "Liquidity Ratios: Assessing a Company’s Short-Term Financial Health"), so companies should be prepared,” added Kobus.

Included in the report is a checklist of actions companies can take to minimize their [risk against these attacks and to respond promptly and thoroughly should a cyber](https://www.financedigest.com/automated-cyber-risk-quantification-saving-the-insurance-industry.html "Automated Cyber Risk Quantification: Saving the Insurance Industry") breach occur. [Topping the list is increasing awareness of cybersecurity](https://www.financedigest.com/why-cybersecurity-needs-to-be-top-of-the-agenda-for-fs-organisations.html "Why cybersecurity needs to be top of the agenda for FS organisations") issues through training and education. In addition, the report lists six other core [steps most businesses should take to prepare](https://www.financedigest.com/exclusive-naftogaz-ceo-prepared-to-step-down-if-it-would-facilitate-debt-deal.html "Exclusive-Naftogaz CEO prepared to step down if it would facilitate debt deal") for an incident and mitigate risk.

Kobus continued, “It’s no longer a question of which industries are most at risk. All [industries are faced with the task of managing dynamic](https://www.financedigest.com/benzylamine-market-top-key-players-latest-trends-regional-insights-and-global-industry-dynamics-by-2026.html "Benzylamine Market Top Key Players, Latest Trends, Regional Insights and Global Industry Dynamics By 2026") data security risks. Even companies in the retail, restaurant and [hospitality industries](https://www.financedigest.com/what-can-small-hotels-do-to-succeed-in-the-hospitality-industry.html "What Can Small Hotels Do to Succeed in the Hospitality Industry?"), while highly regulated, had the fourth-highest rate of data security incidents.”

**Key** [statistics from BakerHostetler’s 2017 Data Security Incident Response Report:](https://www.financedigest.com/pharmaceutical-contract-sales-outsourcing-market-statistics-demand-and-forecasts-to-2031-examined-in-new-research-report.html "Pharmaceutical Contract Sales Outsourcing Market Statistics, Demand and Forecasts to 2031 Examined in New Research Report")

**Incident causes**: Phishing/hacking/malware 43%, employee action/mistake 32%, lost/stolen device or records 18%, other criminal acts 4%, internal theft 3%.

Industries affected: Healthcare 35%, finance and insurance 16%, education 14%, retail/restaurant/hospitality 13%, other 9%, business and professional services 8%, and government 5%.

[**Company size by revenue**:](https://www.financedigest.com/surgical-imaging-market-2021-global-leading-companies-analysis-revenue-trends-and-forecasts-2027.html "Surgical Imaging Market 2021 Global Leading Companies Analysis, Revenue, Trends and Forecasts 2027") Less than $100 million 39%, between $100 million and $500 million 33%, $500 million to $1 billion 17%, and greater than $1 billion 11%.

**Most breaches discovered internally**: 64% of breaches were internally discovered (and self-reported) compared with 36% that were externally discovered. In 2015, only 52% of incidents were self-reported.

**Incident response timeline**: On average 61 days from occurrence to discovery; eight days from discovery to containment; 40 days from engagement of forensics until investigation is complete; 41 days from discovery to notification.

**Notifications and lawsuits filed**: In 257 incidents where notification to individuals was given, only nine lawsuits were filed. This is partially [explained by companies being prepared](https://www.financedigest.com/explainer-how-wall-street-is-preparing-for-possible-us-debt-default.html "Explainer-How Wall Street is preparing for possible US debt default") to better manage incidents.

**No notification required**: 44% of incidents covered by the report required no notification to individuals – similar to 2015 results.

**Average size of notification**: Incidents in the retail/restaurant/hospitality industry had the highest average notification at 297,000, followed by government at 134,000 and healthcare at 61,000. All other industries had less than 10,000 notifications per incident.

**Forensic investigation costs**: The average total cost of forensic investigations in 2016 was

$62,290, with the highest costs in excess of $750,000.

**Healthcare**: The number of incidents rose [last year](https://www.financedigest.com/crypto-investors-step-up-risk-management-after-last-years-meltdowns.html "Crypto investors step up risk management after last year’s meltdowns"), but the average size of the incidents decreased. Of the incidents analyzed by the BakerHostetler report, 35% were in healthcare, yet the average size of the incident notification was 61,000 – only the third highest of all [industries surveyed](https://www.financedigest.com/projector-lamps-market-surveys-opportunity-growth-and-forecast-by-end-use-industry-2021-2031.html "Projector Lamps Market Surveys, Opportunity, Growth and Forecast by End-use Industry 2021-2031"). \

**Triggering state breach notification laws**: Just over [half of cyber incidents last year](https://www.financedigest.com/tods-sales-rise-17-in-first-half-of-year.html "Tod’s sales rise 17% in first half of year") (55%) were subject to state breach notification statutes €€– down slightly from the year prior. Of the incidents where notification was required, the highest percentages were those involving Social Security numbers (43%) and healthcare information (37%). Only 12% of [cases involved payment](https://www.financedigest.com/exclusive-apple-hit-with-antitrust-case-in-india-over-in-app-payments-issues.html "Exclusive-Apple hit with antitrust case in India over in-app payments issues") card data.

**Active state attorneys general**: AG’s made inquiries after notifications were made in 29% of incidents, although overall regulatory investigations and inquiries were down to 11% in 2016, from 24% in 2015, and litigation was down to 3% last year compared with 6% the prior year.

[**Back to the basics**](https://www.financedigest.com/back-to-operational-basics-with-analytics.html "Back To Operational Basics With Analytics")

The first line of defense in protecting a company’s data and reputation during a cybersecurity incident is to outfit the organization with baseline procedures and processes to reduce the company’s risk profile. By focusing on key areas like employee awareness and education, companies can help prevent incidents while laying the groundwork for a successful response and reducing the likelihood events will be severe should they happen.

“Employees are often cited as a company’s greatest asset. In the cybersecurity arena, they can also be a liability. The [report’s numbers reinforce the ongoing need to focus](https://www.financedigest.com/tesla-investors-to-focus-on-demand-issues-in-earnings-report.html "Tesla investors to focus on demand issues in earnings report") on effective employee awareness and training. They also show that a defense-in-depth approach is necessary, because even well-trained employees can make mistakes or be tricked,” said Kobus.


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