Escaping the “black hole”: how to measure cybercrime

How big a threat is cybercrime to UK industry, and how do we deal with it?

The vast majority of parliamentary committee reports do not prompt headlines containing phrases like “losing the war”, “falling into a black hole”, and “a bigger threat than nuclear attack”. Last week’s Home Affairs Select Committee report on e-crime was a notable exception. For those who make a living fighting cyber-crime, however, the report held very little that would shock. Indeed, my colleague Art Coviello spoke at length to the Committee, and whilst he agreed with their assessment that we weren't winning the battle, he had considerable praise for the way both British business and government were coming together around the challenge.

Now the dust has settled somewhat, it’s worth separating reality from hyperbole, and perhaps considering what might actually be done about the problem. To do so, we should begin on a positive note. The headlines came about because the UK features so high on the list of targets for cyber criminals but, in some ways, this is as reassuring as it is a point of concern. The reason we're such a persistent target of attack is because we have so much worth stealing – financial assets, intellectual property and the type of vibrant dynamic business that generates both. We shouldn’t worry if criminals wish to steal from us, but we must work to limit their chances of success. So, what can we do to thwart the criminals? And how well are we doing currently?

The second question is easy to answer, and the answer is: not too badly. We may not be winning the war, but we’re not losing either – the "black hole" of the report is really a sort of jurisdictive black hole, and it’s unlikely to swallow the nation’s finances any time soon. That’s not, however, to deny the scale of the problem, and the question of how we solve it is undeniably complicated. The issue is a truly global one, and criminals have more weapons at their disposal than ever before.

Cyber-security professionals refer to the "attack surface" to describe how cyber-criminals access their victims and, in the space of the last ten years, this has changed beyond all recognition. When the internet was primarily a means of accessing information, the avenues through which cyber criminals could reach their victims were limited, and so was the extent of their potential gains. Now, with almost any product or service available online, with a plethora of different social networks, and with smartphones and many different devices connected to the internet, there are few limits to the means criminals can employ to steal from organisations and individuals.

No individual or organisation can hope to stand alone against this threat. Companies that wish to defend themselves have little alternative but to collaborate on their response to cyber-crime. The criminals themselves see the value of such a strategy, and their information-sharing networks are extraordinarily effective. At our subsidiary RSA, we maintain cyber-security watch posts around the world, and from these we see criminals exchanging data on the vulnerabilities that allow them to steal money and intellectual property from organisations and individuals.

This is a sophisticated and agile underground economy which feeds parasitically on legitimate commerce, and which lawful businesses cannot hope to curb without concerted action. However, even recent discourse on the issue has not sufficiently stressed the importance of collaboration. For example, the CBI’s otherwise very sensible response to the Committee’s report struck a false note in its suggestion we should be "fighting crime in private". That would be a lonely and unsuccessful fight, and it’s crucial that British businesses are aware of how numerous, how skilled, and how efficiently collaborative cyber-criminals are. No organisation could hope to combat them alone.

However, with a coherent framework for businesses to share information on cyber threats, businesses are well-placed to beat the cyber threat. Many business leaders may shy away from the idea of engaging with their competitors and peers in industry, but strong precedents have already been set in sectors at high risk of cybercrime. Financial services is one of these and, while companies in the industry are more protective of proprietary information than those in almost any other, the scale of the threat is such that a formal means of sharing intelligence is a necessity. In financial services, the eFraudNetwork cybercrime watch service allows companies worldwide to securely share information about cyber-crime, so that once one attempted theft is thwarted, the perpetrators cannot simply move on to try the same methods at another organisation.

Such a network is very effective in curbing fraud and theft, and the good news is that this kind of information sharing is not complex or expensive, and need not negatively impact on the competitive advantages or information privacy of the organisations involved. It is a model that could easily be replicated in other industries. Much work is already being done to achieve this; indeed, RSA will shortly release a cyber-threat intelligence model, which will propose a global industry standard framework for business-to-business information sharing. Last week’s Committee report implied that a political intervention is possible so, however it chooses to do so, the business community should act while it is still able to shape a response according to its own priorities. After all, if there’s one thing that we know about cyber criminals, it’s that they never stop working to improve the methods they use. As the lawless learn to attack more effectively, so the lawful must learn to defend better – and no one organisation can succeed in doing this alone.

James Petter is vice president and managing director of EMC UK&I

Photograph: Getty Images

James Petter is vice president and managing director of  internet services company EMC UK&I.

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The 5 things the Tories aren't telling you about their manifesto

Turns out the NHS is something you really have to pay for after all. 

When Theresa May launched the Conservative 2017 manifesto, she borrowed the most popular policies from across the political spectrum. Some anti-immigrant rhetoric? Some strong action on rip-off energy firms? The message is clear - you can have it all if you vote Tory.

But can you? The respected thinktank the Institute for Fiscal Studies has now been through the manifesto with a fine tooth comb, and it turns out there are some things the Tory manifesto just doesn't mention...

1. How budgeting works

They say: "a balanced budget by the middle of the next decade"

What they don't say: The Conservatives don't talk very much about new taxes or spending commitments in the manifesto. But the IFS argues that balancing the budget "would likely require more spending cuts or tax rises even beyond the end of the next parliament."

2. How this isn't the end of austerity

They say: "We will always be guided by what matters to the ordinary, working families of this nation."

What they don't say: The manifesto does not backtrack on existing planned cuts to working-age welfare benefits. According to the IFS, these cuts will "reduce the incomes of the lowest income working age households significantly – and by more than the cuts seen since 2010".

3. Why some policies don't make a difference

They say: "The Triple Lock has worked: it is now time to set pensions on an even course."

What they don't say: The argument behind scrapping the "triple lock" on pensions is that it provides an unneccessarily generous subsidy to pensioners (including superbly wealthy ones) at the expense of the taxpayer.

However, the IFS found that the Conservatives' proposed solution - a "double lock" which rises with earnings or inflation - will cost the taxpayer just as much over the coming Parliament. After all, Brexit has caused a drop in the value of sterling, which is now causing price inflation...

4. That healthcare can't be done cheap

They say: "The next Conservative government will give the NHS the resources it needs."

What they don't say: The £8bn more promised for the NHS over the next five years is a continuation of underinvestment in the NHS. The IFS says: "Conservative plans for NHS spending look very tight indeed and may well be undeliverable."

5. Cutting immigration costs us

They say: "We will therefore establish an immigration policy that allows us to reduce and control the number of people who come to Britain from the European Union, while still allowing us to attract the skilled workers our economy needs." 

What they don't say: The Office for Budget Responsibility has already calculated that lower immigration as a result of the Brexit vote could reduce tax revenues by £6bn a year in four years' time. The IFS calculates that getting net immigration down to the tens of thousands, as the Tories pledge, could double that loss.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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