BEYOND THE BREACH

SECURITY BREACHES ARE INCREASINGLY BECOMING COMMON AND, CONSEQUENTLY, MORE COSTLY. HOWEVER, MORE THAN FINANCIAL LOSS, A CYBER INCIDENT CAN ALSO CAUSE A PLETHORA OF OTHER NEGATIVE IMPACTS TO A BUSINESS. SECURITY CORRESPONDENT DANIEL BARDSLEY REPORTS.

- Daniel Bardsley

As of late January, the foreign exchange company Travelex was still partly offline as a result of a malware attack that forced staff to carry out transactions by paper instead of electronically.

Travelex, which was founded in London in 1976 but is now part of the Abu Dhabi headquartered Finablr, suffered weeks of disruption as a result of the ransomware incident, which began in December 2019.

Just as the firm was getting back on its feet during January 2020 with a gradual restoration of services, the news emerged that a German car parts manufacturer, Gedia, had been brought to its knees by an attack by the same group of hackers who had attacked Travelex.

The Russian-speaking hackers stole company data from Gedia and threatened to post it online unless a ransom was paid. Such were the effects of the incident on the operations of Gedia, a company that can trace its history back a century, that staff were sent home early.

As well as business disruption, both Travelex and Gedia have, of course, faced a raft of damaging headlines, demonstrating that cyber-attacks can lead to reputational damage as well as short-term financial harm.

The two attacks came little more than six months after the ratings agency Moody’s announced that it was downgrading the outlook of the credit ratings agency Equifax from stable to negative because of the massive cyber breach that that company revealed in 2017. The personal information of 147 million people was compromised in the breach.

Moody’s announcement in May 2019 was particularly significant because, as a spokesperson told media in the United States, “It is the first time that cyber has been a named factor in an outlook change.”

So, the recent history of Equifax and, perhaps, Travelex and Gedia too, indicates that we are now in an era where the potential consequences of cybersecurity incidents are so severe that a company’s long-term prospects can be affected.