As data breaches proliferate, report says rich nations facing growing risks from cyberattacks

Industrials Associated Press

Wealthy nations face a high and fast-growing threat of cyberattacks while risks from terrorism increasingly are confined to poorer, conflict-stricken countries, according to a defense outlook report by the consultancy Deloitte.

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Recent data breaches in the U.S. and Japan are sharpening concerns over cybersecurity and such worries are warranted, the report said.

Countries identified as having the greatest risks included South Korea, the United States and Britain, which despite hefty military budgets are so integrated into the online universe that they are huge and lucrative targets.

But European countries such as the Netherlands, Denmark and Switzerland that spend much less on defense also ranked high in terms of cyber risks, said the report, which ranked countries according to measures such as the rate of mobile phone subscriptions, numbers of Internet servers and rate of Internet use.

China, India and Russia, which all are pursuing stronger cyber warfare capabilities, may "behave more aggressively in cyberspace" out of a perception they are relatively less vulnerable to cyberattacks, the report said.

Numerous hacks and breaches of computer networks of U.S. government agencies such as the IRS and private businesses including retailers and health insurers are highlighting the growing importance of security.

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The recent breach announced by the Department of Homeland Security of data from the Office of Personnel Management and the Interior Department, according to a member of the Senate Intelligence Committee, is believed to have come from a hacker based in China.

In Japan, the latest attacks targeting the national pension service are thought to have stolen about 1.25 million names, including some 700,000 passwords. Such thefts are adding to concerns as the country gears up to introduce a national identification number system in 2016 that would create more online links to personal data.

The massive attack on Sony Pictures last year highlighted the potential risks for corporations, which paid an average of more than $3.5 million for each data breach in 2014, according to a survey by the Ponemon Institute, a Michigan-based institute specializing in research on privacy, data protection and information security policy.

But while rich countries are increasingly vulnerable to hacking and other cybersecurity breaches, their risks of deaths from terrorism have fallen to below the levels seen at the time of the Sept. 11, 2001 attacks, the Deloitte report said.

Annual global deaths from terrorist attacks doubled to 22,178 in 2013 from 10,955 in 1997, while the number of such incidents nearly tripled, to 11,952 from 3,204. Two-thirds of those deaths in 2013 were in poor, conflict-wracked countries with relatively low defense budgets.

In 2013, just six countries — Afghanistan, Pakistan, Iraq, Nigeria, Syria and Yemen — accounted for 80 percent of terrorism-related deaths, the report said. They also accounted for a large share of deaths in armed conflicts.

The report said military budgets of the top 50 defense spending countries now top a combined $1.6 trillion. China's fast growing budget, at about 40 percent the size of that of the U.S., will account for about 60 percent of net global growth in defense spending through 2018, it said.

The report said China's process of catching up with the leading edge of defense technology includes improvements in its cyber capabilities, its military space program and its J-31 stealth aircraft.

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