Verizon Data Breach Investigations Report 2013 says financial cybercrime accounting for three-fourths of real-world breaches, followed by cyberespionage in one-fifth of breaches

If there's one big theme of the just-released Verizon Data Breach Investigations Report (DBIR), it's demographics: All sizes of organizations are getting hacked, and different industries are getting hit for different reasons and with different attack methods.

"We shouldn't have a one-size-fits-all approach," Jay Jacobs, senior analyst for the Verizon RISK Team, says is one of the biggest takeaways from this year's report, which was the biggest one yet in terms of data and sources. "There's a big difference between [attacks hitting] a retailer and financial institutions versus manufacturers or consultants."

The report -- which draws from 621 confirmed data breaches, 47,000 reported security incidents, and 44 million compromised records worldwide in 2012 from Verizon as well as the US Computer Emergency Response Team and other national CERTs, the U.S. Secret Service, and law enforcement agencies in Europe -- shows that 75 percent of all breaches last year were the result of financially motivated cyberattacks, while 20 percent were cyberespionage for stealing intellectual property or other information for competitive purposes. Hacktivism remained steady, but with more distributed denial-of-service (DDoS) attacks than "doxing" or other forms or data theft.

Outsiders again reigned as the top attackers, making up 92 percent of the attackers that hit organizations last year. Next were state-sponsored attackers -- the majority from China -- with 19 percent of the attacks, and 14 percent were executed by insiders. Financial firms were hit the most, with 37 percent of last year's breaches, followed by retailers and restaurants, 24 percent; manufacturing, transportation, and utilities, 20 percent; and information services and professional services, 20 percent.

Nearly 40 percent of all attacks hit large organizations, but smaller organizations represented a large number of breached organizations when it came to cyberespionage-type attacks: Some 22 of the organizations suffering cyberespionage last year were firms with only one to 100 employees, mainly in manufacturing and professional services, and 23 firms with 101 to 1,000 employees, mainly in manufacturing. Firms with 1,001 to 10,000 employees accounted for 36 of the cyberespionage attacks.

"That size variable was a surprise to me," Jacobs says. "We saw an even split [overall] between large and small organizations ... The best theory we could come up with was that in a lot of the main industries here -- manufacturing and professionals services like consultants, programming or engineering -- there's a lot of intelligence-gathering in their relationships. So attackers may go after a small manufacturing company because they manufacture something on behalf of a bigger company. So they generate this intellectual property."

[Half of all targeted attacks last year hit companies with less than 2,500 employees, and overall, targeted cyberattacks jumped 42 percent in 2012, new Symantec data show. See Small Businesses Now Bigger Targets In Cyberattacks.]

Other key findings were that organizations typically don't discover that they've been breached for months and even years after the fact, and nearly 70 percent of them learn from a third party. And when it comes to cyberespionage attacks, 96 percent of them were attributed to attackers in China, while the majority of financially motivated breaches came from attackers in the U.S. or Eastern Europe. Romania was No. 1 there, with 28 percent of the attacks.

Origin of External Actors: Top 10

Source: 2013 Verizon Data Breach Investigations Report (DBIR)

And even amid growing concerns about mobile security and the bring-your-own device explosion, mobile wasn't a factor in the breaches last year, according to Verizon's report. "We're just not seeing [mobile] yet," Verizon's Jacobs says. "It's either because it's not holding data, or there's an easier path to the data ... But that may change as it becomes more ubiquitous and standardized."

A combination of methods contributed to attackers hitting their marks, but hacking (52 percent) was the most common technique, followed by malware (40 percent); physical, such as ATM skimmers (35 percent); social (29 percent); misuse (13 percent); and user mistakes (2 percent).

Meanwhile, the report highlights just how crucial demographics are to unraveling data breach incidents. Different industries are more prone to specific threats than others, for instance, and also face different types of attack methods. Smaller firms also face different attack methods than larger ones. "We see a diverse set of tactics," Jacobs says.

Financial cybercrime actors typically hit smaller organizations by compromising weak passwords on an admin's account, for example, and gather their intel on this via automated scans looking for open ports and weak passwords to gain remote admin control. "With smaller targets, it's more of low-hanging fruit," Jacobs says. "With larger targets, we see a more diverse set of attacks."

With larger targets, phishing and malware are a popular combination, especially in cyberespionage, but that also is typical with targeted spying attacks on smaller firms. The bottom line is a one-size-fits-all approach to security is detrimental, according to Verizon. "Any attempt to enforce a one-size-fits-all approach to securing our assets may result in leaving some organizations underprotected from targeted attacks, while others potentially overspend on defending against simpler opportunistic attacks," the report says.

Overall, phishing tactics quadrupled in 2012, a jump Verizon attributes to the popularity of phishing in targeted cyberespionage campaigns.

Organized crime syndicates mostly out of Eastern Europe and North America typically target the finance, retail, and food industries for payment cards, credentials, and bank information, while state-sponsored attackers mostly out of China go after manufacturing, professional, and transportation firms for credentials, organizations, data, trade secrets, and system information, the report says.

Hacktivists, mostly from North America and Western Europe, target information, public, and other services, mainly for credentials, personal information, and internal organization data, Verizon says.

"The bottom line is that unfortunately, no organization is immune to a data breach in this day and age," said Wade Baker, principal author of the DBIR reports. "We have the tools today to combat cybercrime, but it's really all about selecting the right ones and using them in the right way. In other words, understand your adversary -- know their motives and methods, and prepare your defenses accordingly and always keep your guard up."

The full Verizon 2013 DBIR is available here (PDF).

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About the Author(s)

Kelly Jackson Higgins, Editor-in-Chief, Dark Reading

Kelly Jackson Higgins is the Editor-in-Chief of Dark Reading. She is an award-winning veteran technology and business journalist with more than two decades of experience in reporting and editing for various publications, including Network Computing, Secure Enterprise Magazine, Virginia Business magazine, and other major media properties. Jackson Higgins was recently selected as one of the Top 10 Cybersecurity Journalists in the US, and named as one of Folio's 2019 Top Women in Media. She began her career as a sports writer in the Washington, DC metropolitan area, and earned her BA at William & Mary. Follow her on Twitter @kjhiggins.

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