Written by Andrea Rangel, Global Economic Intersection Associate
Econintersect: Cyber-crime by hackers is a mushrooming business. As published in a report by The Group IB, in 2011 the estimated loss to cyber-crime totaled about $12.5 billion. Recently, hackers are implementing different ways to commit online banking fraud. However, a survey from The Hartford shows that business owners are not aware of the danger their business accounts are exposed to. Bank regulations are lagging behing as more criminal groups are developing. New standards may be required by banks and others to contend with the rising tide of cyber-crime.
Online banking fraud is booming. For example, Hunton & Williams states in an article that in 2009 cyber-crime surpassed other souces of loss for the first time. In addition, accordying to an article from The New York Times,
“Corporate account takeovers have become increasingly common, and small businesses are especially prey because many lack firewalls and monitoring systems.”
The report from the Group IB explains that the growth in the cyber-crime market,
“was caused by the improvements in banking malware and the formation of even more estable criminal groups whose profesionalism and experience grew with each passing month and earned millions.”
Another problem with cyber-crime is that owners believe that their business accounts have the same protection as that of their personal accounts, when in fact, the protections are often less for businesses. A survey from The Hartford reveals that 85 percent of small businesses owners think that a data breach is unlikely to occur. Lynn LaGram, assistant vice president of small commercial underwriting at The Hartford, said,
“Most of the busines owners surveyed believe they are not at risk, when in fact smaller businesses are increasingly being targeted.”
For example, as published by The Threatpost, a new court ruling has found that the IT security system used by a domestic bank was not “commercially reasonable” to protect its customers. The problem behind the case against People’s United Bank was that $589,000 dollars were drained from Patco Construction Company’s account during only a one week period of time in 2009.
Russia is the source of about 20% of financial cyber crime in the world. The known leaders in this endeavor are real “Baby Faced Floyd” types as can be seen in a rogues gallery published in a report by Goup IB.