Lost Devices or Hacking Top Financial Threat? It's How You Look at the Data

One look at breaches reported by financial firms finds that lost devices have been the most common reason for a breach, while another finds that hacking has become the leading threat in the past three years.

data breach

Financial firms are more likely to report a breach due to a lost or stolen device than due to hacking or malware, according to a survey of a decade of published reports conducted by security firm Bitglass.

Yet, other surveys—and the dataset on which they are based—have found that hacking and malware have been a more common threat for the industry in recent years.

The Bitglass data, most of which comes from the database of the Privacy Rights Clearinghouse, shows that 25 percent of breaches that have occurred since 2006 have been due to lost or stolen devices, while 19 percent of reports point to hacking or malware as the cause.

"Lost and stolen devices are a common problem, and they can be costly for any bank," Salim Hafid, a product manager with Bitglass, told eWEEK.

Yet, the data is heavily skewed by a large number of breach reports citing lost and stolen devices in 2006, 2007 and 2010. In fact, for the past four years—between 2012 and 2015, inclusive—hacking and malware have edged out missing devices as the top threat for financial institutions, according to anti-malware firm Trend Micro and research conducted by eWEEK using Privacy Rights Clearinghouse data.

Similar to Bitglass, Trend Micro found that portable device loss accounted for about a quarter of all breaches—27 percent in its analysis—but also found those breaches have been on a decline for the past decade, while hacking and malware have been on the rise.

Yet, Trend Micro—in its blog—called the theme that hacking and malware are the biggest threat a myth.

"Although the news has been rife with stories of how certain malware or hacking groups were responsible for breaches, the truth is, most of them were actually caused by device loss," the company stated. "Overall, it accounts for 41 percent of all breaches compared to the 25 percent caused by hacking and malware. Companies may often overlook the kind of sensitive information stored on their employees' laptops, mobile devices, and even thumb drives."

The conclusion, however, applies to multiple industries—not just financial services—and also focuses on a decade of data, not just the most recent trends. Lost and stolen devices are, by far, the greatest threat for health care, for example, with insider leaks taking a distant second, according to Trend Micro's analysis.

Yet, data on government breaches shows a similar trend to financial services: Lost and stolen devices used to be the most common cause of a breach, but for the past four years, hacking and malware has become more common.

The data set does not make it clear whether the missing devices had unencrypted data, since companies do not necessarily report the fact, even though it would mitigate the risk of a breach. However, even if a company required that employees' systems encrypt data, workers who bring their own devices to the workplace could pose a risk, Bitglass' Hafid said.

"A lot of these lost or stolen devices tend to be unmanaged devices," he said. "While a lot of organizations discourage the use of unmanaged devices, employees are still bringing their own smartphones and tablets into the workplace, and when they access corporate data on those devices, they put it at risk."

Robert Lemos

Robert Lemos

Robert Lemos is an award-winning freelance journalist who has covered information security, cybercrime and technology's impact on society for almost two decades. A former research engineer, he's...