In this Opinion piece, Lavanya Kaul, Head of BFSI, UK & Ireland, L&T Infotech (LTI), looks at the benefits of 5G connectivity, plus the potential for cyber incidents;
5G is one of the most revolutionary technologies of recent times, promising faster speeds, lower latency and greater capacity than 4G LTE networks. Its rollout will accelerate IoT adoption in almost every sector and have a positive impact on businesses around the world.
However, despite the benefits, 5G also brings a totally new level of risk. As organisations move from legacy hardware-based networks to software-based systems which require far more components, this creates many new attack vectors. Combine that with the rising number of connected devices, and the risk is colossal. In fact, annual cybercrime costs are anticipated to reach $10.5 trillion by 2025.
So, with the risk of cyber attacks now greater than ever, more organisations are turning to cyber insurance for protection. As a result, the global cyber insurance market is estimated to grow at a Compound Annual Growth Rate (CAGR) of 24.90% and reach a value of USD 28.445 Billion by 2028.
But are cyber insurers ready for 5G’s increased risk level? Have they transformed their underwriting processes to better calculate risk or updated their security checks in line with the evolving threat landscape?
5G cyber risks
5G replaces hardware components in a network with software, making it faster and more reliable. But when it comes to security, it is the hardware-based networks that offer more protection by forcing attackers down a security choke point, which is much easier to monitor. As software-based systems require more components, this increases the number of network edges and access points, opening up new attack vectors for cyber criminals to exploit. Furthermore, the increasing number of IoT deployments like connected homes, automated vehicles and smart cities mean more devices are connected to the network, making the attack surface even larger.
As the cyber threat landscape evolves, the full risks associated with 5G aren’t completely understood yet, but what we do know is that hackers will continue to exploit as many vulnerabilities as possible. Network misconfigurations, for example, could become increasingly problematic as we transition to 5G, with hackers exploiting them to gain access to networks. Also, as organisations build 5G networks they need to add more telecom components to their infrastructure. Some may find their legacy equipment might not have enterprise-grade security, which could create further vulnerabilities. In terms of anticipated attacks, hackers may try to infiltrate 5G networks by exploiting weak points in an organisation’s supply chain before launching a ransomware attack.
Cyber insurance is a must-have
The current threat landscape is becoming more and more severe, with nearly a third of UK organisations suffering cyber attacks every week and globally 30,000 websites are hacked daily. Combine that with the increasing risks posed by 5G networks and cyber insurance is fast becoming a must-have for organisations, covering them for financial and reputational costs in the event of an attack. In fact, the risk is so great, that in heavily regulated sectors, like financial and healthcare, cyber insurance will soon become mandatory.
How insurers can prepare
As more organisations invest in cybersecurity insurance to protect themselves, insurers need to make sure they have the right security checks and underwriting practices in place to effectively calculate and manage risk.
Previously it was much more straightforward for an organisation to obtain or renew an insurance policy since underwriters were only interested in major business updates and analysing historical data. But now, with the risk of cyber attacks accelerating at an alarming rate, underwriters need to shift their focus to real-time data and insights to gain a strong understanding of their customer’s risk profile.
To improve their underwriting capabilities and increase their access to data sources, insurers should upgrade to more advanced technology. Machine learning (ML) can automate underwriting, enabling them to leverage real-time data, industry insights and market-sensing capabilities. This enables them to not only improve risk management but also provide customers with insight on how to avoid being exposed.
When it comes to security checks, insurers need to check if their customers have multi-factor authentication (MFA) procedures and incident report plans in place. MFA is particularly important for email since it is one of the most common attack vectors.
Protecting the future
With 5G networks rolling out, creating a greater attack surface for hackers to exploit, organisations are under pressure to sharpen their security measures to protect themselves. But to minimise the chance of being devastated by a cyber attack, they need to partner with an insurance provider to ensure they have the right security protocols and the right level of protection in place. This puts pressure on cyber insurers to be 5G ready. They need to bolster their underwriting practices and implement technology like ML to ensure they can accurately calculate risk based on real-time data and insights.
While it is clear cyber attacks will continue to accelerate with hackers using increasingly sophisticated techniques and tools, insurers need to be prepared and stay one step ahead. Only then can they provide their customers with adequate security advice and protection to prevent them from being crippled by an attack.