Falling axe increases insider threat
Inside attackers frequently have a pre-existing grudge which is work-related, and so IT management attention must be given now to dealing with the “soft side” of their staff and contractors.
Organisations which have already deployed technical controls, such as identity management suites, and procedural controls, such as separation of duties, will be better positioned to help close the window of opportunity against sabotage and fraud.
But inside attackers frequently have a pre-existing grudge which is work-related, and so IT management attention must be given now to dealing with the “soft side” of their staff and contractors.
Observations:
This research note analyses the potential impact of the global economic downturn on the behaviour of employees, gives a summary of the three factors of the Fraud Triangle, and provides recommendations and advice for IT managers in supporting their organisation in meeting the potential increase in risk.
The autumn of our discontent (winter is coming): In times of economic contraction organisations invariably respond by slashing costs and cancelling projects. Consequently, headcount – and particularly headcount in the IT department – is often seen as a back-office cost centre which can be reduced with little immediate impact. Often IT contractors are let go prior to staff cuts.
Hundreds of positions in IT organisations around the world have already been made redundant and more are coming. Here in Australia, the tally is already starting to rise. The impact of this situation and the surrounding economic turmoil is increasing the pressure on many IT professionals across Australia and New Zealand, and this is creating an environment in which fraud and sabotage are more likely to occur.
The Fraud Triangle: The model of the Fraud Triangle comes from the field of forensic accounting. The model states that for any fraud to occur, three factors need to be present: opportunity, justification, and need.
Justification:
The factor of justification is internal to the attacker and is their internal capability to rationalise their behaviour. The attacker may justify their behaviour with the belief that they are a vigilante and taking action to right a perceived wrong, that the organisation deserves the fraud for some undesirable aspect of its business operations, or that the fraud is so inconsequential that the organisation will not miss the money.
Revenge is a powerful motivator and the desire to have revenge can easily drive an IT worker to attack the organisation where they work, or have previously worked. A 2005 study by the US Secret Service and Carnegie Mellon Software Engineering Institute found that in cases of insider attack;
- The trigger for most inside attacks was a negative work event,
- Prior to the event, most of the inside attackers already held a work-related grievance,
- The inside attackers most frequently reported that revenge was their motive
For IT departments going through involuntary redundancies, there is a serious risk that disgruntled professionals might take their own redundancy, or that of a colleague, as justification to attack. The attack may be serious or minor, but it will carry a cost: quite probably on the organisation’s reputation.
Need:
The factor of need is important for both fraud and sabotage. Need for money could be the driver for an employee to commit fraud against their employer. The need for money can either be driven by lack – and as the slowed economy takes its toll through 2009 this will be increasingly likely – or it can be driven by a desire to live a lifestyle which is not currently affordable. The strength of feeling for the need for revenge can drive an employee to actually commit an act of sabotage which might otherwise have stayed as a mere fantasy.
Opportunity:
In KPMG’s 2006 fraud report of Australian and New Zealand organisations, non-managers within the organisation accounted for 45 per cent of all detected frauds. While only a percentage of these non-managers were IT staff, the degree of power a single IT professional can hold over their employer must not be underestimated.
Just as IT professionals are presented with phenomenal opportunities through their access to an organisation’s technology, the factor of opportunity is the only factor of the Fraud Triangle which can be addressed through technology.
Technology can create either a physical or logical constraint against unhindered access. This is not to say that technology can either completely close the window of opportunity, or that opportunity can only be addressed through technology.
The time to paint the roof is when the sun is shining:
The IBRS Identity and Access Management survey found that 53 per cent of organisations were aware of identity management systems but did not yet use one. A further 11 per cent reported being unaware of identity management systems. This means that many of the controls automated by Identity Management products (for example: role based access controls, and de-provisioning) are not being used by many organisations; some of which may now be facing an increased prospect of an insider attack.
It is not too late to deploy controls, but it will be now be harder to do this. IBRS’s identity and access management survey identified that higher priorities and a lack of resources were already the two most prominent reasons for organisations holding back from identity management deployment. The economic climate has deteriorated even further since our survey and these inhibitors will be more prominent than ever.
Next Steps:
From a sabotage perspective, much of the risk will come from the technically savvy professionals, so the challenge of managing these will be higher than the non-technical. However, with fraud, the risk will be present for all professionals who have expert understanding of their work processes and the information they deal with – particularly when they are in positions of trust.
The common approach for both is communication. Management attention must be brought to bear on any negative work-related experiences. Professionals must be given the chance to feel that they have been given a fair hearing – this is the only way they can lower their own need to make an impact.
Make sure that formal grievance processes are articulated, adhered to, and taken seriously.
Most importantly, the increased risk of an insider attack must be flagged to senior managers who are discussing reducing headcount; they must be given an opportunity to consider the risk and what degree of mitigating controls may be appropriate.
Conclusion:
Many economists currently agree that the global economy is at least a year away from improving. Until the economy recovers, many IT professionals will have their positions made redundant and organisations must handle these redundancies with great care.
The expertise of IT professionals who feel a need to take revenge means that the impact of an insider attack could be very costly to an organisation which may already be struggling.
www.ibrs.com.au
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Falling axe increases insider threat
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