Detection of information security breaches drops in Canada, PwC says

The detection rate for information security breaches among Canadian businesses has dropped 15% since last year, according to a new report from PwC.

Globally, the number of reported information security incidents around the world rose 48% to 42.8 million, the equivalent of 117,339 attacks per day in 2014, according to The Global State of Information Security Survey 2015, a worldwide survey by PwC, completed in conjunction with CIO and CSO magazines.

As many as 71% of security compromises go undetected, PwC noted, based on an estimate from the 2014 Trustwave Global Security Report, released in May.

“The rate of growth isn’t surprising,” Salim Hasham, partner and national cyber security leader at PwC noted in a statement on its survey report, which was based on responses from 9,700 C-suite executives and IT security heads from more than 154 countries.

“This is only the tip of the iceberg when it comes to an organization’s ability to detect cyber incidents or even quantifying true losses,” Hasham noted.

“The underlying issue lies with the under investment in the capability to go beyond trying to just protect critical digital assets towards a need to establish the ability to identify incidents as a better indicator.”

The detection rates in small Canadian organizations have increased by 311% over 2013, the report suggests. Small organizations also increased their IT security spending by 21% this year over last, PwC said.

“This improvement is critical for Canada overall, given the proportion of our economy served by this sector, and the fact that many of our large and medium sized organizations is serviced by smaller ones. This helps to address an increasing avenue of attack in the supply chain process,” Hasham noted.

Meanwhile, medium-sized companies reported a 21% decrease in detected incidents, despite a 74% increase in budget compared to 2013. However, their estimated total for financial losses due to all security incidents, dropped by 81%, which PwC says is “further reinforcing the false perception that things are improving.”

“This is equally true for large Canadian organizations where the rate of detected incidents fell 22% since 2013, with a corresponding IS budget reduction of 26% and the estimated total for financial losses as a result of all security incidents dropping by 82%,” the firm said.

Of those breaches detected globally, the estimated cost for 2014 is more than $23 billion, PwC said.

“The survey indicated that the global cost of security compromises is ultimately unknowable because many attacks are not reported and the value of certain kinds of information (e.g. intellectual property and trade secrets) is very difficult to ascertain,” the firm said.

The World Bank has estimated that the loss of trade secrets could range from $749 billion to $2.2 trillion per year, PwC also noted.

“Big losses have been more common this year as organizations reporting financial hits of $20 million or more increased 92% globally and 27% in Canada over 2013,” it reported.

At 35%, current employees were the most cited sources of security incidents both globally and in Canada, followed by former employees (33% in Canada and 30% globally) and hackers (26% in Canada, 24% worldwide).

“In terms of external sources of incidents in Canada, reported incidents caused by hackers decreased 26% over 2013, while incidents stemming from information brokers increased 78% (vs. 54% globally) and threats from activists (organizations and hacktivists) increased 62% over 2013,” according to PwC.

High-profile attacks by nation-states, along with organized crime and competitors, were the least frequent incidents, though they are fast-growing.

This year, reported compromises by nation-states increased 86% globally (vs. 9% in Canada). In Canada, there was a 46% increase in security incidents attributed to competitors (vs. 64% globally), some of whom may be backed by nation-states, according to PwC.