BREAKINGVIEWS - Hackers' successes will force security costs up

NEW YORK Wed Jun 8, 2011 4:36am IST

A Sony PlayStation gaming console controller is displayed at an electronic shop in Tokyo May 3, 2011. REUTERS/Kim Kyung-Hoon/Files

A Sony PlayStation gaming console controller is displayed at an electronic shop in Tokyo May 3, 2011.

Credit: Reuters/Kim Kyung-Hoon/Files

Related Topics

Stocks

   

NEW YORK (Reuters Breakingviews) - This may go down as the year of the hack, with Sony and Amazon among the targets. But the compromising of information on almost 40 million RSA security tokens, which protect sensitive military and financial networks, may be the most serious instance. Cybersecurity efforts -- and spending -- suddenly look inadequate.

RSA's devices are familiar in the worlds of banking and government. The keychain-like gadgets generate a six-digit number every minute or so. Users must enter the number along with a user name and password to access a network. Unfortunately, a sophisticated attack on RSA, the security division of EMC (EMC.N), suggests that a group of hackers found a way around the first part of the process.

Fortunately, that still left other security walls in place, such as passwords. Moreover, the attacks seemed extremely specific -- defense contractors including Lockheed Martin (LMT.N) seem to have been the only parties that have been subject to attempts to break into their systems. Unfortunately, this relatively good news isn't enough in the world of computing security.

Passwords can be broken through simple means such as calling users and saying that "IT needs your password to update your system". And financial companies can't rest easy knowing they haven't yet been targeted. A foreign power willing to steal sophisticated U.S. weapons systems may also be interested in destabilizing America's financial system -- and enterprises in places not friendly with the West might worry the same the other way around.

RSA's offer to issue new tokens should prevent further intrusions this time. Yet the possibility that companies, especially financial institutions, could have seen their crown jewels exposed will surely cause consternation in executive suites. And with computer networks increasingly critical to global business and powerful technology readily accessible to governments, criminals and amateur hackers alike, the recent attacks won't be the last such effort.

Consultancy Forrester estimates that security ate up about 8 percent of North American and European corporate IT budgets in 2007, and that figure grew to 14 percent in 2010. With companies now anxious not to be the ones hacked next time, that figure looks sure to go up.

CONTEXT NEWS

-- RSA, the security division of EMC, on June 6 offered to replace customers' security tokens after defense contractors including Lockheed Martin were attacked by hackers. The assaults were made possible by a breach of RSA's internal network that in turn compromised the security tokens. The company admitted on March 17 that there had been an intrusion.

-- SecurID is an authentication system that allows two forms of security. The keychain-like devices generate a six-digit number every minute or so. Users must enter the number along with a user name and password to access a network.

-- RSA offered to replace tokens for customers and is working to bolster other layers of customers' security. RSA has issued more than 40 million of the devices.

-- RSA statement: link.reuters.com/zud99r

(Editing by Jeffrey Goldfarb and Martin Langfield)

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Wilful Negligence?

Wilful Negligence?

SEBI piles pressure on Sahara to sell overseas hotels  Full Article 

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage