It is unlikely that cyberattacks – many of which are state sponsored – will become more benign as time passes. Rather, it is more likely that cyberattacks – particularly the ransomware variety – become more severe with each successive attack. This week’s REvil attack is a perfect example.
So much of our enterprise technology is fragile in nature. The combination of legacy technology infrastructure and applications, weak security protocols (especially for on-premise Technology stacks), and poor user habits (example: “password123”) create a field day for cyberattackers. Our view is that the capital markets ought to fear cyberattacks as much or more than potential future interest rate hikes given their potential to wreak economic havoc. A cyberattack that released nuclear wastewater into a heavily populated area or that polluted drinking water for millions of people would not be a black swan event. Moreover, such attacks wouldn’t necessarily need to be executed by sophisticated state sponsored criminals. A disgruntled employee with advanced security access employed by a company with weak security protocols is all that is required to fully execute an attack. As we have written previously, Distributed Ledger Technologies (“DLT”), such as Blockchain could do much to mitigate the security risks presented by the legacy technology systems that permeate much of corporate America as well as government agencies. To read more about the REvil attack click HERE.