Hidden Risks of Data Leaks: Understanding the Threat of Internal Fraud!

One of the serious threats facing companies is data leakage due to internal fraud.

It is important not to underestimate the risk of internal fraud, such as intentional data theft by employees or accidental data leakage, as well as unauthorized access from outside.

This article discusses the background and measures to prevent internal fraud from becoming a hidden risk of data leakage.

It is important to understand the threat of internal fraud and take measures to protect your organization.

Why Internal Fraud Poses a Risk of Data Leakage
1. Motives for Internal Fraud
2. Impact on Data Leakage
Why Internal Fraud is Increasing
1. Spread of Remote Work Environment
2. Low Awareness of Information Security
3. Deficiencies in Compliance System
Measures to Prevent Internal Fraud
1. Technical Measures
2. Human Measures
3. Management Initiatives
Summary

1. Why Internal Fraud Poses a Risk of Data Leakage

The risk of data leakage exists not only from external threats but also within the company.

Internal fraud can be broadly divided into intentional and unintentional, both of which can cause serious damage and require appropriate measures.

1-1. Motives for Internal Fraud

There are various motives behind internal fraud.

The first is monetary motivation. This is the act of gaining financial profit by illegally accessing data and selling the acquired confidential information. Confidential information can be traded on the dark web or with illegal list vendors for a large sum.

Personal grudges can also be a motive for internal fraud. Dissatisfaction or resentment towards superiors or the company may lead to taking out and leaking confidential information to retaliate or harass.

Another motive is to take technical information, sales information, customer data, and other confidential information when changing jobs to a competitor and use it in the new workplace.

1-2. Impact on Data Leakage

Once confidential information is leaked, the company will suffer serious damage such as economic loss, damage to the company image, and compliance violations.

Economic Loss

Companies will suffer economic losses if important confidential information or customer information is misused due to data leakage.

Significant costs such as recovery costs, compensation, and litigation costs may occur, which may have a significant impact on sales and profits. If technical information is leaked, there is a risk that competitors will take the lead, which will also have a significant impact on corporate earnings.
Damage to Company Image

The company’s brand image may decline and it may lose the trust of customers.

Trust may also decline from stakeholders such as business partners and shareholders, as well as customers.

If a large-scale data leakage is discovered, it may be widely covered by the media and damage the company’s reputation.
Compliance Violations

If confidential information including personal information is leaked, there is a risk of violating the Personal Information Protection Act. There is a possibility of legal penalties and claims for damages from victims. If the leaked personal information is misused and secondary damage such as identity theft occurs, the damage will be more serious.

As described above, data leakage due to internal fraud is a major risk that has a significant impact on companies, and sufficient measures are required.

2. Why Internal Fraud is Increasing

Several factors can be considered behind the increasing risk of data leakage due to internal fraud.

The increasing difficulty in managing data access due to the spread of remote work, the low awareness of information security among employees, and deficiencies in the company’s compliance system are increasing the risk of internal fraud.

It is necessary to strengthen internal fraud measures more than ever in response to changes in the environment.

2-1. Spread of Remote Work Environment

Remote work has spread rapidly due to the global epidemic of the new coronavirus infection.

With the increase in people working from home and remotely, it has become more difficult to manage security within the company than before, and the risk of unauthorized access has increased.

Furthermore, information sharing using data has become common instead of paper documents, and the portability of data has also increased dramatically.

As a result, the current situation is that internal employees can easily take out confidential data.

In addition, because access from environments different from the normal in-house network has increased, it may be difficult to detect suspicious behavior of employees.

The spread of the remote work environment is one of the factors that makes it easier to overlook internal fraud.

2-2. Low Awareness of Information Security

Another factor that is increasing the risk of internal fraud is the low awareness of information security among employees. Many employees do not have sufficient understanding of social engineering, and there is a risk that they may be involved in crimes such as phishing scams without realizing it.

In addition, there are still many cases of copying confidential data to removable media such as USB memory or saving it to cloud storage without permission. There is a tendency to prioritize work efficiency and convenience and overlook security risks.

A lack of awareness of the risk of cyber attacks can lead to data leakage.

2-3. Deficiencies in Compliance System

If information security measures in companies are insufficient, the risk of internal fraud increases.

However, the reality is that there are still few companies that are promoting the development of information security policies.

Even if a policy is formulated, there are many cases where employees are not sufficiently informed, and if there are deficiencies in the policy content, it will be difficult to take effective measures.

Furthermore, there are many companies that have insufficient compliance and governance systems.

Because effective management and supervision are not being carried out, there is a risk of overlooking internal fraud.

In this way, problems in the system increase the risk of internal fraud.

It is necessary to develop an appropriate information management system as an organization and prevent and detect employee misconduct.

3. Measures to Prevent Internal Fraud

Data leakage due to internal fraud is a major risk that causes enormous damage to companies.

To reduce this risk, a comprehensive approach that combines technical and human measures is essential.

Furthermore, the leadership of management and continuous efforts are also essential.

3-1. Technical Measures

Let’s check the technical measures to prevent internal fraud.

First, appropriate management of access rights is important. Instead of granting uniform rights to all employees, it is necessary to set the minimum necessary rights individually. In particular, access to highly confidential information must be strictly controlled.

In addition, important data must be encrypted and protected. Even if information is leaked, the damage can be minimized if it is encrypted. However, encryption alone is not a complete solution. This is because encrypted data can also be decrypted by in-house employees.

Therefore, it is necessary to reliably record the logs of the information system and check them regularly. Suspicious operations can be detected and used to prevent internal fraud.

Furthermore, the introduction of advanced security solutions such as unauthorized access detection systems will be effective.

3-2. Human Measures

On the other hand, measures on the human side are also essential.

First, it is necessary to raise the information security awareness of each employee. Thoroughly inform them of the risks and measures against internal fraud through regular training.

In addition, it is important to conduct practical training including social engineering countermeasures.

It is also necessary to work to improve compliance awareness.

Employees should be encouraged to comply with corporate ethics and security policies, and penalties for violations should be clearly indicated.

Furthermore, by establishing an internal reporting system, it is possible to detect fraud early.

It is necessary to create an environment where reports can be made anonymously and ensure that fraud is not overlooked.

3-3. Management Initiatives

The most important thing in internal fraud countermeasures is the strong leadership and commitment of management.

The top management themselves must constantly show employees the importance of information security and promote security measures throughout the company. It is essential to take the lead as a role model and promote awareness reform.

Furthermore, it is necessary to clearly define an information security policy that covers the entire organization. This is because it serves as a guideline for concretizing human and technical measures. In addition, a security audit by a third party should be conducted regularly.

It is necessary to receive objective checks by external experts, identify internal fraud risks, and continuously improve measures.

In this way, to prevent internal fraud, a comprehensive approach based on technology, people, and the leadership of management is essential. By working together as one, all stakeholders can connect to effective measures.

Summary

Internal fraud is a serious data leakage risk that cannot be overlooked.

It is important to combine appropriate technical and human measures and take comprehensive measures under the strong commitment of management.

This is a serious problem that can have a significant impact not only on companies, but also on business partners, customers, and ultimately society as a whole, and it is necessary to always implement the latest measures.

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