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Showing posts with label Cybersecurity Crisis. Show all posts
Slack
Company Security CrowdStrike Cyber risks Cyber Security Cyber Security Vendor Cybersecurity Crisis Risk Assessment Slack

Managing Vendor Cyber Risks: How Businesses Can Mitigate Third-Party Failures

 

On Wednesday, businesses worldwide experienced disruptions when Slack, a popular workplace communication tool, went offline due to a technical issue. The outage, which lasted several hours, forced teams to rely on alternative communication methods such as emails, phone calls, or in-person discussions. While the incident was quickly resolved, it highlighted a broader issue—businesses’ growing dependence on third-party software providers and the risks associated with their failures. 

While Slack’s downtime was inconvenient, other recent outages have had more severe consequences. In early 2024, Change Healthcare, a payment processing provider under UnitedHealth Group, suffered a ransomware attack that disrupted medical billing nationwide. Healthcare providers struggled to process insurance claims, delaying patient care and, in some cases, resorting to handwritten billing records. A few months later, CDK Global, a software provider used by car dealerships, was hacked, causing widespread operational shutdowns across the auto sales industry. 

In July, a major issue with cybersecurity firm CrowdStrike led to massive flight cancellations, grounding thousands of travelers worldwide. These incidents demonstrate how companies, even with strong internal security measures, remain vulnerable to the weaknesses of their vendors. Cyber insurance and risk management company Resilience reported that in 2024, nearly one-third of the claims it processed were related to vendor-based cyber incidents, including outages and ransomware attacks. 

The company’s CEO, Vishaal “V8” Hariprasad, noted that many organizations overlook the risks posed by third-party providers, despite the potential for significant financial losses. While businesses cannot completely eliminate third-party risks, they can take steps to reduce their exposure. Conducting thorough security assessments before partnering with vendors is crucial. Many organizations assume that if a company offers a widely used service, it must be secure, but that is not always the case. 

Companies should verify whether vendors carry cyber insurance covering third-party risks and review their security protocols, especially for remote access. Cybersecurity rating services such as Security Scorecard and BitSight can help businesses monitor vendor vulnerabilities in real time, allowing them to respond quickly to potential threats. Developing a robust incident response plan can help minimize the impact of vendor failures. Businesses should conduct risk assessments to identify critical systems and outline alternative solutions in case of outages. 

For example, if a primary communication platform becomes unavailable, having a backup system in place can prevent workflow disruptions. Regular cybersecurity drills can also help companies prepare for worst-case scenarios, ensuring that employees know how to respond to a vendor-related cyber incident. Strengthening internal security measures is another essential step. Multi-factor authentication, zero-trust architecture, and network monitoring can help prevent attackers from exploiting vendor weaknesses to gain access to a company’s systems. 

Subscribing to dark web monitoring services can also help detect stolen credentials, allowing businesses to take preventive action before cybercriminals can exploit compromised accounts. A single cyber incident does not necessarily indicate that a vendor is unreliable, but how they respond to the crisis matters. CrowdStrike’s software update issue in July led to thousands of flight cancellations, but some cybersecurity experts argue that the company’s overall security offerings remain strong. Knee-jerk reactions, such as immediately abandoning a vendor after an incident, can sometimes do more harm than good. 

While vendor-related cyber risks are an unavoidable part of doing business in a digital world, preparation and proactive security measures can make the difference between a minor disruption and a full-blown crisis. Companies that invest in due diligence, response planning, and internal security improvements are better positioned to withstand third-party failures and recover quickly when issues arise.
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Risk Management
AI Attacks AI Policy AI Risks Company Security Cyber Safety Cyber Security Cybersecurity Crisis Risk Management

Addressing AI Risks: Best Practices for Proactive Crisis Management

 

An essential element of effective crisis management is preparing for both visible and hidden risks. A recent report by Riskonnect, a risk management software provider, warns that companies often overlook the potential threats associated with AI. Although AI offers tremendous benefits, it also carries significant risks, especially in cybersecurity, which many organizations are not yet prepared to address. The survey conducted by Riskonnect shows that nearly 80% of companies lack specific plans to mitigate AI risks, despite a high awareness of threats like fraud and data misuse. 

Out of 218 surveyed compliance professionals, 24% identified AI-driven cybersecurity threats—like ransomware, phishing, and deepfakes — as significant risks. An alarming 72% of respondents noted that cybersecurity threats now severely impact their companies, up from 47% the previous year. Despite this, 65% of organizations have no guidelines on AI use for third-party partners, often an entry point for hackers, which increases vulnerability to data breaches. Riskonnect’s report highlights growing concerns about AI ethics, privacy, and security. Hackers are exploiting AI’s rapid evolution, posing ever-greater challenges to companies that are unprepared. 

Although awareness has improved, many companies still lag in adapting their risk management strategies, leaving critical gaps that could lead to unmitigated crises. Internal risks can also impact companies, especially when they use generative AI for content creation. Anthony Miyazaki, a marketing professor, emphasizes that while AI-generated content can be useful, it needs oversight to prevent unintended consequences. For example, companies relying on AI alone for SEO-based content could risk penalties if search engines detect attempts to manipulate rankings. 

Recognizing these risks, some companies are implementing strict internal standards. Dell Technologies, for instance, has established AI governance principles prioritizing transparency and accountability. Dell’s governance model includes appointing a chief AI officer and creating an AI review board that evaluates projects for compliance with its principles. This approach is intended to minimize risk while maximizing the benefits of AI. Empathy First Media, a digital marketing agency, has also taken precautions. It prohibits the use of sensitive client data in generative AI tools and requires all AI-generated content to be reviewed by human editors. Such measures help ensure accuracy and alignment with client expectations, building trust and credibility. 

As AI’s influence grows, companies can no longer afford to overlook the risks associated with its adoption. Riskonnect’s report underscores an urgent need for corporate policies that address AI security, privacy, and ethical considerations. In today’s rapidly changing technological landscape, robust preparations are necessary for protecting companies and stakeholders. Developing proactive, comprehensive AI safeguards is not just a best practice but a critical step in avoiding crises that could damage reputations and financial stability.
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ransomware incident
Cyber Attacks Cybersecurity Crisis Financial Security phishing ransomware incident

Behind the Scenes: How Patelco Responded to the Ransomware Threat


Patelco Credit Union, a prominent financial institution based in Dublin, has been thrust into the spotlight due to a crippling ransomware attack. 

With over half a million members affected, the situation underscores the critical importance of robust cybersecurity measures for financial institutions. In this blog post, we delve into the details of the attack, its implications, and the lessons we can learn from Patelco’s experience.

Patelco Credit Union Ransomware Attack

Four days after a ransomware attack disabled its systems, Patelco Credit Union could not inform its members when banking activities would resume.

The Dublin-based credit union has yet to provide additional information on the security incident that has prevented members from making electronic payments, deposits, or transfers since last weekend.

Customers continued to wait in lines to use bank ATMs on Tuesday, forcing them to visit Patelco locations around the state to withdraw cash, even though they can still not view their statement balances or any other information about their online banking.

The Attack Unfolds

The Lockdown: Patelco’s online banking services ground to a halt as the attack unfolded. Members were unable to make electronic payments, access their account balances, or conduct transactions. The situation escalated rapidly, leaving customers frustrated and anxious.

Phishing Email as the Gateway: Cybersecurity experts suspect that the attackers gained entry through a phishing email. These deceptive emails trick recipients into revealing sensitive information or clicking on malicious links. In Patelco’s case, an unwitting employee may have inadvertently provided the attackers with a foothold.

Encryption and Ransom Demand: Once inside Patelco’s systems, the hackers encrypted critical data, effectively locking the credit union out of its own infrastructure. The term “ransomware” aptly describes their next move: they demanded payment in cryptocurrency in exchange for decrypting the files.

The Response

Member Disruptions: Patelco’s half a million members faced significant disruptions. Unable to check balances, transfer funds, or pay bills online, they turned to ATMs and physical branches. The inconvenience was palpable, highlighting the importance of uninterrupted digital services.

Assets and Vulnerabilities: Patelco manages a substantial $9 billion in assets across its 37 branches. The attack raises questions about the security posture of financial institutions. Are credit unions like Patelco adequately protected? Or are they, as some experts suggest, “soft targets” compared to larger banks?

Transparency and Communication: Patelco responded swiftly by creating a dedicated website to keep members informed. Regular updates on the security breach, restoration efforts, and collaboration with cybersecurity experts demonstrate transparency and a commitment to resolving the crisis.

What can be done

  • Invest in Cybersecurity: Financial institutions, regardless of size, must prioritize robust cybersecurity measures. Regular employee training on recognizing phishing attempts, network segmentation, and incident response plans are essential.
  • Backup and Recovery: Regular data backups and tested recovery procedures can mitigate the impact of ransomware attacks. Patelco’s ability to restore services promptly will depend on its preparedness in this area.
  • Third-Party Collaboration: Patelco’s engagement with external cybersecurity experts is commendable. Collaborating with specialists who understand the evolving threat landscape is crucial.

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