Bad times always bring a rise in crime. But this economic recession is setting us up for a wave of cybercrime. The broken economy, combined with increased digitization as retail and operations move online and ever-more sophisticated hackers, means more data is more vulnerable than ever. That was the warning from former federal prosecutor and securities fraud attorney Orin Snyder, speaking at a data security panel at yesterday’s LegalTech conference in New York.
“I think with the recession that is upon us we are going to see an even more dramatic increase in cybercrime and opportunistic hacking,” said Snyder, a litigation partner at the New York office of Gibson, Dunn & Crutcher.
Data breaches have exploded in recent years, despite better technology, despite greater awareness of cyberattacks, Snyder said.
“You have a recession creating more cybercriminals. There is more and more digitization every day as companies accelerate their move from bricks and mortars to the Internet as they are closing stores and centralizing online, and then, of course, the sophistication of the hacking,” Snyder said.
“I think that is almost an unholy trinity of events that will result in an even greater incidence in the coming years of data breach problems,” Snyder said.
Make that unholy quartet.
“What is unfortunate is that companies, as they are laying off and retrenching, are going to budget even less and less for prevention and technology to deal with data breach problems,” Snyder said.
As economic pressures mount, companies will also likely see dramatic increases in employee misuse of data, Snyder predicts, recounting a recent conversation with someone at a major financial institution. “They said that since September there has been a two-fold increase in petty financial crimes, employee-caused –$2,000, $4,000, $6,000 being taken out of bank customer’s account by an employee — not massive theft, but it all adds up.”
Joining Snyder in a discussion on data security was his colleague from Gibson Dunn, Alexander Southwell, also a former federal prosecutor and securities fraud expert; Adam Smith, chief legal officer at Terremark Worldwide Inc.; and panel moderator Alan Brill, senior marketing director of Kroll Ontrack Inc.