
Lukas Tamašiūnas
Cybersecurity
Data breaches are one of the most common cybersecurity threats that businesses and individuals have to face. What may seem like a small data leak can result in huge financial loss and reputational damage. So, what is a data breach, how does it happen, and how can you safeguard your data?
A data breach occurs when unauthorized people gain access to personal, classified, or otherwise protected information. Data breaches can be unintentional (for example, resulting from a company file sent to the wrong person) or malicious (caused by phishing emails, hacker attacks, or malware infections).
More often than not, businesses and individuals suffer malicious data breaches. Since data can hold significant value, it’s natural that cybercriminals try to steal it and make a profit from it either by selling the obtained information on the dark web or ransoming it for huge sums.
Typical data breaches involve specific steps, such as reconnaissance, gaining access, extracting data, and covering the hackers’ tracks. In certain cases, cybercriminals can also use privilege escalation or lateral movement.
Here’s how malicious actors breach systems to steal data:
The steps above describe a perfect data breach, during which the system operators are unaware of being attacked. Depending on the type of attack, the system security, or the vigilance of its owners, data breaches can be spotted early or even during the attack, forcing malicious actors to adjust their methods.
Poor cybersecurity practices, such as weak passwords or unpatched vulnerabilities, are usually the main causes of data breaches. Cybersecurity experts also note that human error is among the most common causes of this issue and add misconfigured systems and physical credential theft (or loss) to the list of contributing factors.
Hackers target both small and large businesses for two different reasons. Small businesses often lack robust cybersecurity practices, making them easy targets. Meanwhile, large companies often present a challenge that can motivate hackers to breach the system and humiliate the company publicly, resulting in financial and reputational damage. Some hackers may also breach systems to commit espionage or even shine a light on a specific political or social cause (a process also known as hacktivism).
Based on these simple principles, malicious actors can exploit different vulnerabilities. For example, small businesses often suffer phishing and other social engineering attacks. Big businesses aren’t immune to phishing either, due to the larger number of employees and extensive communication channels. However, they’re also more likely to experience brute force attacks, which can breach the company’s cybersecurity and result in data theft.
Businesses may also face different types of data breaches caused by insider threats (employees who willingly help hackers get inside), malware, unpatched system vulnerabilities, or even lost or stolen company devices. This is why companies invest in cybersecurity measures, such as password managers, two-factor authorization (2FA), and skilled cybersecurity personnel. However, it’s equally important to train all employees to help them understand their role in maintaining cybersecurity in the workplace.
As mentioned, hackers can use numerous methods to breach the systems and steal data. From malware to third-party software, here are the main ways in which malicious actors may launch a data breach attack:
Hackers use malware to slip into the system undetected. Files with spyware or ransomware, trojans, and infostealers are among the most common types of malware that can open doors for hackers to access your system, potentially gain admin-level privileges, and steal sensitive data.
Malware can infect your system through various methods, including phishing links, infected USBs, and unsafe websites. Therefore, employee vigilance is essential in preventing this type of cyberthreat.
Social engineering refers to attacks that involve direct contact between the hacker and the system user. Malicious actors create believable scenarios and try to lure users into providing sensitive information, using methods such as phishing.
Whaling is another great example of a social engineering attack. This method is used to target big companies and works similarly to phishing. During whaling attacks, hackers send emails to high-level employees (executives, CEOs, and CFOs), pretending to be representatives of reputable companies, such as law firms. In those emails, the hackers may urge their victims to wire money, share the company’s secrets, click on suspicious links, or download unknown files.
Phishing is a social engineering cyberattack that exploits users by baiting them to click on links or files that contain viruses, spyware, and other malware. Hackers usually attempt phishing through email and contact employees with messages that create a sense of fear or urgency and encourage quick response. For example, phishers may target employees by pretending to be representatives of legitimate organizations, and prompting the users to take immediate action based on the content of the email.
If an employee takes the bait, they may click on the link which typically hosts some kind of malware, potentially opening the doors for cybercriminals to breach the system. The landing pages of some phishing links may also replicate known user interfaces, such as system login windows, and scan everything the user types (including username and password), further exposing the system to the threat.
No matter how hard people try, sometimes accidents happen. A lost keycard, a typo in the email address field, or a lost work laptop can cause a data breach if they fall into the hands of malicious actors. If something like that happens, it’s important to report the issue without ignoring it and be vigilant of potential breaches or attacks. Offering support to the person who made a mistake is also a good practice for maintaining loyalty among employees.
In some cases, hackers can initiate a data breach with assistance from someone inside the organization. According to the experts, this issue has become so prevalent that it now ranks among the top cybersecurity risks for large businesses. To prevent insider threats, you can limit access to sensitive information or invest in a better workplace environment (people are less likely to turn against the company when they actually like working there, right?).
Supply chain attacks occur when hackers target part of a company's supply chain software. In simple terms, it’s a type of cyberattack that targets service providers, vendors, and third-party apps on which the company relies. Some businesses may need to share access rights or sensitive information when using third-party services. Therefore, a successful supply chain attack can expose your company’s system even if it wasn’t attacked directly.
As soon as companies develop new strategies to safeguard their data, malicious actors come up with new ways to overcome them. System security gets obsolete fast, exposing businesses to cyberattacks. Overdue updates and unpatched vulnerabilities invite hackers to breach your networks and steal sensitive data. To avoid such problems, companies should install system updates as soon as they launch while constantly monitoring and patching additional system vulnerabilities.
Weak passwords are one of the most common causes of data breaches. Far too often, people believe their passwords are strong enough, while a hacker with a capable toolset can crack them in mere seconds. Safeguarding against this vulnerability requires businesses to introduce 2FA and educate employees on password security. Using additional tools such as password managers can also be a huge benefit.
While cloud storage is a convenient choice for data storage, poorly configured cloud servers can turn that comfort into a headache in just a few seconds. Insufficient user restrictions, lack of encryption, or disabled logging and monitoring can allow malicious actors to jump into your cloud server and peek at all the sensitive data you might be hiding there.
Third-party access vulnerabilities can allow cybercriminals to steal your business data even without directly attacking your company. Hackers may target a third-party service provider to hijack communications, gain access to specific files shared between your company and the third-party service provider, or learn about potential vulnerabilities.
Safeguarding against this risk is difficult but not impossible. Before entrusting your company’s data to a third-party service provider, make sure that the provider has an impeccable cybersecurity record. Even then, set up separate accounts for communication and use proper information segmentation. In addition, look for ways to safeguard your system in case of a third-party attack.
Data breaches, as the name suggests, mainly target data. Depending on the service the business provides, we can divide that data into more specific types.
The consequences of data breaches vary depending on the type and amount of stolen data, the size and reputation of the company, and sometimes even the hacker's “goodwill.” Based on these (and many more) factors, the consequences of a data breach can range from small financial losses to massive reputational damage, compliance regulation breaches, lawsuits, loss of certificates, and even official government hearings.
Typically, after stealing sensitive data, malicious hackers can either use it to further their scams (for example, using stolen client data to launch phishing attacks and steal identities), sell the data on the dark web, or contact the owners of the breached system to demand ransom for the stolen data. If the company has a strong presence in the market or is one of its leaders, the hackers may leak the data for free to cause reputational (and, therefore, financial) damage.
Examples of real-life data breaches prove that even well-known companies, such as Equifax and Yahoo, cannot feel safe from potential cyberattacks. Here are a few high-profile data breach cases:
For businesses, data breach prevention requires substantial financial and human resources. Here are some tips on how to safeguard your business against data breaches:
If the business has suffered a data breach, it’s critical to act fast. First, contain the breach by isolating all affected systems and assessing the damage and the compromised data. Then, start patching vulnerabilities, fixing security gaps, and notifying affected customers and stakeholders. Some laws may also require reporting the data breach to law enforcement (for example, under the GDPR, organizations have 72 hours to report a breach to the relevant data protection authority).
Finally, continue to monitor your systems and review the security policies. The backlash and repercussions may continue for some time. However, while going through the process, it’s important to start upgrading and patching your cybersecurity weaknesses to avoid future cyberattacks.
Detect and respond to cyber threats before they escalate with NordStellar — a next-gen threat exposure management platform. Contact the NordStellar team to learn more.
While it’s hard to define a specific figure, the average cost of a data breach usually involves millions of dollars. Some experts indicate that the average cost per lost or stolen record containing sensitive information could be approximately $165, while healthcare records may reach $429 per record. According to IBM's 2023 Cost of a Data Breach report, the average data breach exposes about 25,000 records. Based on these numbers an average data breach can cost from $4 million to $10 million and more.
To detect a data breach, check your system activity logs and file directories for suspicious activity. Data breaches usually include connections from unknown devices, changes in file locations or sizes, and unusual data transfers. So if you notice any unauthorized or dubious changes in your system, start investigating. Additionally, use automated security tools, such as NordStellar, and regularly conduct security audits to enhance threat detection capabilities.
Reporting a data breach may look different depending on where the business operates. For example, in the EU, you must report a breach to your local data protection authority (DPA) within 72 hours of its discovery. In the US, however, most states obligate businesses to notify their Attorney General's office or consumer protection agencies of any breaches. The requirements vary by state, and the timelines may be shorter than those mandated by federal law.
It's also critical to inform the company's customers by sending emails or text messages describing the situation and the steps that will be followed to mitigate the damage.