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Cyber AI Chronicle

By Simon Ganiere · 10th November 2024

Welcome back!

Project Overwatch is a cutting-edge newsletter at the intersection of cybersecurity, AI, technology, and resilience, designed to navigate the complexities of our rapidly evolving digital landscape. It delivers insightful analysis and actionable intelligence, empowering you to stay ahead in a world where staying informed is not just an option, but a necessity.

Table of Contents

What I learned this week

TL;DR

  • I have a pretty basic system to track down the articles I'm reading during the week so I can use them to create this very newsletter. Looking back at my list, I started to notice quite a few articles related to the struggles of the security teams. This week deep dive is a summary of those articles based on experts in the field sharing their insights. Let me know what you think? mid-life crisis or part of the normal maturity of the industry? » READ MORE

  • The AI world is still moving at high speed:

    • The search space is going through a new cycle. With SearchGPT last week, this week we have META announcing they are working on their own AI powered search engine. I’m not sure how Google is feeling about this but for the company that created the core technology used in LLM, is sitting on a treasure trove of data (the Google index), and is now facing harsh competition on their main product (search)…well it’s not looking great.

    • META is also making Llama available to U.S. government agencies and contractors working on national security applications. I mention this previously, AI will have a huge impact on geopolitics.

    • OpenAI acquired chat.com for $15.5 million, the full story from the seller is here.

  • In the good news for cyber security:

    • An international coalition of police agencies conducted a major operation that resulted in the takedown of 1,037 servers and other infrastructure operating on 22,000 IP addresses. This effort targeted online scams, phishing schemes, and ransomware distribution, leading to the arrest of 41 individuals » READ MORE

    • The Cybersecurity and Infrastructure Security Agency’s (CISA) secure-by-design pledge, now six months in, has pushed major software firms to improve security. The pledge includes goals like expanding multifactor authentication, removing default passwords, and enhancing vulnerability reporting » READ MORE

    • The FBI said in 2023 that business email compromise accounted for $2.9 billion in losses. Therefore any initiative to disrupt such type of attack is a big win, it was announced this week that a Nigerian national got a 10-year sentence for stealing $20 million through business email compromise scams » READ MORE

Security's Mid-Life Crisis: An Industry at a Crossroads?

Several thought leaders and organizations are pointing to fundamental problems in how we approach cybersecurity, and the picture they paint suggests an industry in the midst of an identity crisis.

The Foundation Was Built on Questionable Data

In a revealing analysis, Chris Hughes exposes that the popular "shift left" movement, which advocates moving security earlier in the development lifecycle, was built on surprisingly shaky ground. A recent CISA Cybersecurity Advisory Committee report found that the often-cited statistics about cost savings from early detection were founded on speculative, unofficial sources - some of which may have never existed. Even more concerning, claims like Barry Boehm's assertion that fixing software problems after delivery is "100 times more expensive" than finding and fixing them during the design phase lack any empirical support.

This revelation is particularly troubling because these statistics have been fundamental in justifying security investments for years. Even modern reports, such as IBM and Ponemon's Cost of a Data Breach study, don't provide actual data on the cost savings when security vulnerabilities are found and fixed before a breach occurs. This raises serious questions about how we justify security investments when the economic rationale we've relied on might be fundamentally flawed.

Security Failures Don't Have the Impact We Think

One of the most surprising findings across multiple sources is that security incidents often don't have the lasting impact we've been led to believe.

According to recent studies cited in Hughes' article, organizations that filed SEC 8K's for security incidents only suffered an average 1.4% share price decline, which typically bottomed out after 40 days and fully recovered within 53 days.

Even more perplexing, breaches involving sensitive data like Social Security numbers had less negative impact on share prices than breaches of email addresses.

The pattern extends beyond stock prices. Major security incidents at companies like Target, Samsung, and SolarWinds showed minimal long-term impact on customer base and revenue. As CISA's report notes, "quality failures don't always affect customer loyalty." This creates a challenging dynamic where the traditional arguments for security investment - protecting reputation and avoiding customer loss - may not be as compelling as we once thought.

Tool Sprawl is Out of Control

According to a SiliconAngle article cited by Hughes, the security industry has fallen into a dangerous "tool-centric" approach rather than focusing on outcomes. The average CISO's organization now manages between 70-90 security tools, with some running as many as 130 different solutions. What's more alarming is that only 10-20% of this cyber technology is actually fully utilized - meaning properly deployed, configured, tuned, and optimized.

Frank Wang, in his analysis "Security has too many tools," points out that this proliferation of tools isn't just a financial issue. The tool sprawl creates cognitive overload for security teams, leading to burnout and actually making teams less effective as they juggle an ever-growing portfolio of solutions. Moreover, these security tools themselves become part of the attack surface, introducing their own vulnerabilities and misconfigurations.

The Business Perspective Gap

Leon Adato makes a provocative but insightful observation in his article "Nobody Cares About Security" - what businesses actually care about is avoiding lost revenue, downtime, extortion, and lawsuits. This isn't just semantic wordplay; it represents a fundamental disconnect between how security teams think about their mission and how businesses evaluate value.

What businesses actually care about is avoiding lost revenue, downtime, extortion, and lawsuits.

The challenge is multi-faceted. Security issues are inherently complex, more so than many other business risks. As Abe Silber, CEO at CyberCure.com, points out in Adato's article, "The problem with security is that it's impossible to measure your ROI... it's almost impossible to measure the likelihood of preventing [incidents] based on different security solutions." This makes it extremely difficult for security teams to justify investments in business terms.

The Prevention vs. Response Debate

Perhaps the most controversial development comes from Gartner's recent Risk and Security Summit, where analysts Akif Khan and Christopher Mixter advocated for organizations to move away from "zero tolerance" prevention mindsets. Their argument is that organizations need to accept some level of security loss, similar to how retail stores accept a certain amount of shrinkage or banks accept some fraud losses.

This represents a significant shift in security thinking, suggesting that organizations should invest more heavily in response and recovery capabilities rather than trying to prevent every possible attack. It's a pragmatic approach, but one that's meeting resistance from some security leaders. As Danny Jenkins, CEO of ThreatLocker, argues, "The idea that you can recover from a cyber attack is rubbish... What happens when someone takes six terabytes of your confidential files? How do you recover from that?"

The Way Forward

The evidence suggests that security teams need to fundamentally rethink their approach. Here's how we might forge a new path:

Redefine Security's Role

Security teams need to stop positioning themselves as the "Department of No" and start acting as business enablers. As Mark Simos points out in his RSA presentation on security anti-patterns, this means having conversations that start with "How can I help you achieve your objective securely?" rather than listing all the reasons something can't be done. This shift in mindset is crucial for building the partnerships needed for effective security.

Embrace Empirical Decision Making

We need to move away from fear, uncertainty, and doubt (FUD) and toward data-driven decision making. This means investing in better metrics and measurement systems that can actually demonstrate security's value to the business. As Frank Wang suggests, this might mean having fewer tools but more headcount - focusing on people who can understand and solve problems rather than just operating tools.

Build Real Partnerships

Security teams need to break out of their silos. This means regular engagement with business units, understanding their objectives, and finding ways to enable those objectives securely. As Chris Hughes notes, this might be as simple as starting with pizza-fueled discussions between security operations and development teams to build understanding and cooperation.

Conclusion

The security industry's mid-life crisis isn't necessarily a bad thing - it's an opportunity for transformation. We've built our industry on assumptions that are being challenged, using metrics that don't resonate with business leaders, and relying too heavily on tools rather than outcomes. The path forward requires us to be more pragmatic, more business-aligned, and perhaps most importantly, more honest about what we can and cannot achieve.

Security teams need to:

  1. Stop trying to prevent every possible attack and focus on managing the most likely and impactful risks

  2. Reduce their tool sprawl and invest more in people and processes

  3. Build genuine partnerships with business units rather than acting as gatekeepers

  4. Develop better ways to measure and communicate their value to the business

  5. Accept that perfect security is impossible and focus on resilience instead

Here's a thought to ponder: What if we've been looking at security all wrong? Instead of trying to be the organization's immune system, fighting off every threat, maybe we should be more like its nervous system - helping it sense danger and respond appropriately, while still allowing it to function and grow.

What do you think? Is security having a mid-life crisis, or are we finally maturing as an industry? Let me know your thoughts in the comments below.

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Global State of API Security

Key Takeaway

  • Generative AI adoption expands attack surfaces and increases API security risks significantly.

  • Bot attacks on APIs are prevalent, necessitating advanced strategies for effective mitigation.

  • Organizations must prioritize real-time monitoring and analysis for generative AI API security.

  • A proactive approach integrating strategy, technology, and governance is crucial for API security.

  • Many organizations lack confidence in their current API security measures and need innovation.

  • 7% of organizations reported at least one API-related data breach in the past two years.

  • Only 38% of APIs are tested for vulnerabilities on average, revealing a security gap.

  • 61% of organizations expect API risk to increase over the next 12-24 months.

  • 67% of organizations are adopting generative AI, raising API security concerns.

How data breaches affect stock market share prices

Key Takeaway

  • Data breaches cause reputational damage, affecting investor confidence and stock performance.

  • Healthcare sector suffers most from data breach impacts on share prices.

  • Breaches of non-sensitive data surprisingly impact stock prices more than sensitive data breaches.

  • Breach fatigue reduced negative impact on share prices post-2015.

  • Rising ransomware attacks post-2020 increased negative impacts on share prices.

  • Class-action lawsuits post-breach can significantly affect stock prices.

  • Retail sector shows resilience in recovering from data breaches.

  • Financial reports post-breach can reveal further impacts on stock performance.

  • Stocks of breached companies on average underperformed the NASDAQ by -3.2% in the six months after a breach.

  • Share prices bottomed out 41 business days following a breach, sinking -1.4% on average.

  • Healthcare companies took the biggest hit to their share prices, which underperformed the NASDAQ by -10.6%.

  • Stock prices recovered to their pre-breach disclosure levels 53 days after a breach(!)

Wisdom of the week

You can't start the next chapter of your life if you keep re-reading the last one.

Michael McMillian

Contact

Let me know if you have any feedback or any topics you want me to cover. You can ping me on LinkedIn or on Twitter/X. I’ll do my best to reply promptly!

Thanks! see you next week! Simon

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