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COVID‑19

Views on the crisis through a cyber-financial lens

Cyber governance performance is a key factor in determining how companies will manage through the crisis. Cyberhedge’s premium research on industries and companies impacted the most is available for all to read.

Daily |

Organizations: Macy’s $1.1 billion bond sale a reminder of financial constraints

Macy’s announced a $1.1 billion bond sale to help shore-up the struggling retailers balance sheet as it navigates the COVID‑19 shutdown. The fresh injection of capital is needed to pay down short term debt maturing in January 2021 and fund operations in the immediate term.

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Daily |

Organizations: HTZ the latest example of the COVID‑19 acceleration of outperformers and underperformers. One difference maker? Digital technology.

Data from 30m McAfee MVISION Cloud users worldwide between January and April 2020 show external attacks by hackers on companies’ cloud-based systems have increased 630 percent following the mass migration to work from home. Overall enterprise use of cloud services has increased by 50 percent over the same time period. Use of Cisco Webex has increased 600 percent, Zoom by 350 percent, Microsoft Teams by 300 percent and Slack by 200 percent. Attacks by ‘insider threat’ categories (i. e. employees working from home) have remained the same, indicating that employees do not ‘attempt to steal more data because they are working from home’.

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Daily |

Organizations: HTZ the latest example of the COVID‑19 acceleration of outperformers and underperformers. One difference maker? Digital technology.

British low-cost carrier EasyJet (EZJ) disclosed a customer data breach that the company says impacted 9 million customers. A majority of the data stolen was reportedly email and physical addresses, but a smaller percentage of customers reportedly had credit card details stolen. EZJ first became aware of the breach in January.

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Daily |

Organizations: EasyJet breach a one-off or evidence of a larger problem? The answer will tell investors how well or poorly the carrier is positioned to weather the COVID‑19 crisis

British low-cost carrier EasyJet (EZJ) disclosed a customer data breach that the company says impacted 9 million customers. A majority of the data stolen was reportedly email and physical addresses, but a smaller percentage of customers reportedly had credit card details stolen. EZJ first became aware of the breach in January.

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Daily |

Organizations, Policy: UK survey reports 51 percent of companies spend at least 40 percent of their IT security budget on compliance

Companies are struggling with increasing compliance burdens that are taking up significant portions of corporate IT budgets and time. 51 percent of respondents report that compliance requirements take up 20,000 hours of resources annually. In addition, 58 percent of companies report that compliance requirements are a barrier to entering new markets. 70 percent say they must manage at least five different compliance projects at any given time, while 7 percent work on 50 or more projects at any given time.

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Ferguson

Company Spotlight: Ferguson

A well-managed company overall, FERG has executed effectively on its digital strategy and invested sufficiently in security to manage the downside financial risks associated with its increased digitization. Strong execution on e-Commerce, its customer sales and maintenance and back-end operations has yielded tangible benefits to the business, helping management deliver on key KPIs including solid margins. This has contributed to FERG’s 4-Star cyber governance rating (out of 5) on a regional basis and 5-Star rating on a relative basis among European industrials.

Daily |

Economics: The failures of J. Crew and Neiman Marcus highlight the importance of applying a Cy-Fi lens in today’s market

A NYT Times story explains how the fall of two retail giants — J. Crew and Neiman Marcus stemmed not only from the pandemic but also from the involvement of private equity firms and the financial over-engineering they deployed. The longstanding weaknesses of some traditional bricks and mortar retailers which include belated or poorly executed digital strategies are also directly related to an inability to make big investments due to being overleveraged. These weaknesses were further exposed by the pandemic, resulting in the recent bankruptcy filings.

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Daily |

Organizations: Vulnerability in Cloud server infrastructure software SaltStack infects servers, leaving them vulnerable to breach

Vulnerabilities in SaltStack software were used as a vector to infect cloud servers with malware or other exploits, with over 6,000 master servers reportedly infected and directly exposed to the internet according to the company, allowing them to be breached. The vulnerabilities were discovered about two weeks ago, and several networks have already reported that they have been breached and had cryptocurrency mining malware deployed onto their servers. More damaging attacks such as data theft and ransomware are possible. A patch is now available for the vulnerability.

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Daily |

Organizations: Pitney Bowes latest ransomware breach further evidence of persistently poor cyber governance

Pitney Bowes Inc. (PBI) experienced a second ransomware attack in seven months on May 4th. The ransomware gang Maze claimed to have breached and encrypted the company’s network. The incident was confirmed by PBI in a statement: “Recently, we detected a security incident related to a ransomware attack. We are investigating the scope of the attack, specifically the type of data that had been accessed, which appears to be limited.”

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Daily |

Economics: Some companies slow spend on digital transformation but larger trend is still clear

Citing a recent report by market research firm Canalys, the WSJ depicts a mixed picture on market-wide digital transformation prospects. Though Microsoft’s year-on-year enterprise cloud growth grabbed headlines, also included in results was the company’s admission that multi-year licensing deals were slow to complete in the final weeks of the quarter—just as the COVID‑19-induced slowdown was taking hold. Some analysts see a positive long-term trend towards digital being brought forward by the pandemic. Others see a slowdown in IT spend and longer-term licensing commitments and investment in cloud initiatives like further AI adoption in the short term as companies scramble to cut costs.

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IWG

Cyber Governance Alert: IWG

In the wake of COVID‑19 and the global lockdown, IWG has lost two-thirds of its market value in the span of two weeks. Though it was considered to be in a strong position to take advantage of WeWork’s financial governance failure heading into 2020, the Cyberhedge cyber-financial model alerted us to the potentially negative impact of its weak cyber governance prior to the current market troubles.

Daily |

Organizations: Survey reveals significant deterioration in corporate cyber governance amidst transition to COVID‑19 remote work

A survey by Barracuda of over 1,000 business decision makers in the UK, US, France and Germany reveals significant cyber security deterioration from the recent sudden shift to remote working. 51 percent have seen an increase in email fishing attacks, 51 percent say their workforce is not proficient or properly trained in the cyber risks associated with remote working, 46 percent are not confident that their web applications are secure, 50 percent allow employees to use personal email addresses and personal devices to conduct company work, 49 percent fully expect to see a data breach or cybersecurity incident in the next month due to remote working. Despite this clear increase in the threat surface, 40 percent of the companies have cut their cybersecurity budgets as part of COVID‑19 cost saving measures.

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Daily |

Economics: Virus-related impacts testing cyber insurance market: Fitch

Fitch expects COVID‑19 related economic impacts to test the growing cyber insurance market due to risks around cloud-related breaches and other operational disruptions that could result in capital constraints and impact ratings.

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Daily |

Economics: “Two years’ worth of digital transformation in two months”

“We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security—we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything,” said Satya Nadella, chief executive officer of Microsoft on the announcement of strong Q3 results today.

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Daily |

Organizations: Less than four months after cyber breach, Travelex puts itself up for sale

Travelex announced that it is seeking offers and that interested parties should contact PricewaterhouseCoopers. Travelex’s business was severely impacted by its December 2019 cyber breach, which put the company in a very difficult financial position even before COVID‑19 disruptions hit.

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Daily |

Economics: Heightened cyber risks intensify longstanding challenge for M&A, especially among companies that do a poor job managing technology

A WSJ report outlined how increased cyber risks amid COVID‑19 are posing increased challenges for M&A transactions globally.

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Daily |

Organizations: Underprepared employees increase cyber risk, and are one reason some companies are less resilient in face of COVID‑19 disruptions

Underprepared employees increase cyber risk, and are one reason some companies are less resilient in face of COVID-19 disruption

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Daily |

Organizations: Corporate and internal IT networks primary source of breaches

A recently published Trustwave report looking at cybercrime globally found that far and away the most common environment breached is corporate and internal IT networks (54%), followed by ecommerce (22%) and the cloud (20%). In the thousands of incidents studied, the report found that 50% of breaches across all environments stemmed from phishing and social engineering.

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Ryanair

Cyber Governance Alert: Ryanair

Ryanair entered 2020 in decent financial shape relative to other low cost airlines. But in addition to the COVID‑19 disruption, poor cyber governance poses a risk to the company’s industry-leading operating margins, the key enabler for RYA’s aggressive pricing and thus market share growth post-COVID‑19.

Daily |

Economics: Exponential rise in ransomware attacks is not just a cyber risk, it’s also a primary financial risk

Zurich Insurance outlined how companies can defend against ransomware at a time when cyber vulnerabilities have increased amidst the COVID‑19-induced shift to remote work. The approach leverages the NIST framework, widely seen as the global standard for improving cyber defense.

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Daily |

Organizations: World’s second largest container shipping company MSC suffers a network outage, possibly due to a cyber attack

MSC reported Friday that a network outage is affecting systems at its Geneva headquarters, and that a cyber attack might be responsible. As of Tuesday 16:00 GMT, the MSC website is still down and the company has released very little new information. General operations appear not to be widely impacted yet, but precedent shows that an operational disruption can be extremely value destructive to a company like MSC.

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Daily |

Policy: US Department of Justice calls for mandatory data breach reporting

At a hearing on March 4 before the U. S. Senate Judiciary Committee, Department of Justice (DoJ) Deputy Assistant Attorney General for National Asset Protection in the National Security Division Adam Hickey called upon Congress to enact legislation that would create a uniform nationwide data breach disclosure law and include a requirement that companies report breaches not just to customers but also to law enforcement.

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Daily |

Organizations: Absence of ceasefire by ransomware hackers towards the healthcare industry means providers still need to maintain focus on cyber to reduce risk of additional shocks

Ransomware attacks on the healthcare industry continue at the same frequency as before COVID‑19, despite recent promises by some hacker groups to avoid targeting the industry during the current crisis.

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Daily |

Organizations: Corporate bond downgrades increase financial constraints on companies needing to improve cyber governance

A Wall Street Journal article outlined the accelerated pace of corporate bond downgrades amidst the COVID‑19 pandemic and economic crisis. It has been the swiftest pace of downgrades on record over the last two weeks. Ford was the latest big name to be downgraded to junk, while approximately $90bn of debt was downgraded in March, and some estimate the number to reach $200bn this year.

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Daily |

Organizations: Benefits of company digital tools like Zoom come with cyber and financial risks

As Zoom’s popularity has exponentially increased in recent weeks due to the mass migration to remote work, reports on security flaws continue to trickle out. Former NSA hacker Patrick Wardle shared with TechCruch two new security flaws that can be exploited to grant hackers physical control of a victim’s computer. Malicious code can be injected into a computer via a Zoom installer to gain root access — the highest level of user privileges.

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Daily |

Economics: Enterprise VPN and RDP use soars as COVID‑19‑driven remote work increases breach risks

Enterprise use of VPNs has increased by 33 percent, and use of Remote Desktop Protocols (RDP) has increased by about 40 percent over the past month as companies respond to COVID‑19 by having employees work from home. These systems increase the risk of a breach of company IT systems as they are inherently less protected than onsite systems and as employees use external access systems that they are less familiar with.

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Daily |

Organizations: Macy’s e-commerce business has gone from rare nice growth story to a lifeline for a company fighting to survive in face of COVID‑19

Macy’s announced it is furloughing a majority of its 130,000 staff globally in the midst of the COVID‑19 crisis that has ground brick-and-mortar retail to a halt. Staff that remain will maintain e-commerce, distribution, and call centers operations.

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Marriott

Rapid Response: Marriott

Marriott customer data breach is a continuation of a concerning trend for the world’s largest hotel chain, which lacks the financial capacity to fix what is a structural problem, not a one-off incident.

Hertz

Update to Cyber Governance Alert: Hertz

COVID-19-related travel disruptions are having a material impact on Hertz’s (HTZ’s) operations and financial position, as well as an increased likelihood of an operational problem related to its poor cyber governance.

Cyber Governance Alert: Hertz

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Informa

Update to Cyber Governance Alert: Informa

COVID-19 disruptions to travel and global business operations are having a significant negative impact on Informa’s (INF’s) core customer events business and its financial position.

Cyber Governance Alert: Informa

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Travelex/Finablr

Update to Rapid Response: Travelex/Finablr

A cyber attack stopped Travelex’s operations. It never fully recovered due to lack of cash to respond. The COVID-19 pandemic will weaken many companies’ cash positions in the coming months, also resulting in an inability to adequately respond to cyber attacks.

Rapid Response: Travelex/Finablr

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Daily |

Economics: Companies face increased IT threats from targeted COVID‑19‑themed phishing attacks

The unprecedented challenges posed by the COVID‑19 outbreak extend to securing companies’ IT networks, and this event may be the biggest cybersecurity threat ever. Threat surfaces are also increasing dramatically as large numbers of workers are forced to work from home, often with systems and procedures that are different from those they are trained on and familiar with in their workplace.

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Insights

Creating awareness with the latest research, publications and insights on the impact of technology risk in financial terms.

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Indices

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What are the Cyberhedge Cyber Governance Indices?

These first ever benchmarks prove good cyber governance matters to shareholder value. They measure stock market performance of companies with good and with bad cyber governance scores. Scores are based on Cyberhedge’s proprietary cyber governance rating methodology. Market performance is tracked by an independent firm. The results show that companies with good cyber governance outperform their peers in US, UK, and EU markets.

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