Business email compromise (BEC) is a sophisticated form of cybercrime that targets commercial, governmental and non-profit organizations. It is a threat that has been growing exponentially over the last few years. BEC scams are designed to trick employees into transferring funds or revealing sensitive information to cybercriminals posing as a trusted colleague or partner.

The technique is straightforward yet effective. The cybercriminal impersonates a senior executive or a key vendor and sends an email to an unsuspecting employee with a seemingly legitimate business request. The email may ask for an urgent wire transfer or sensitive information. The unsuspecting employee, thinking they are assisting in an important business transaction, unknowingly becomes an accomplice in a crime that can have severe ramifications for the organization.

The impact of BEC attacks is far-reaching. It is not only a financial threat but can also cause significant damage to an organization’s reputation and potentially even have legal and regulatory implications. Understanding the scope and impact of BEC is critical for any business that wants to protect itself from this insidious threat.

Impact of BEC on Businesses

The impact of business email compromise on businesses is profound and multifaceted. It’s not just about the immediate financial loss, which can be substantial. The damage extends to the company’s reputation and can lead to legal and regulatory repercussions.

Financial Losses and Their Consequences

The most immediate impact of a BEC attack is financial. The FBI’s Internet Crime Complaint Center (IC3) reports that BEC scams have resulted in billions of dollars in losses globally. These are not small, isolated incidents but a pervasive and growing threat.

The financial consequences of a BEC attack can be devastating. Depending on the size of the company and the amount of money involved, it can lead to bankruptcy. Even for larger corporations that can absorb the financial hit, a substantial loss can affect the bottom line and lead to layoffs, cutbacks, or other negative outcomes.

The financial impact doesn’t stop with the immediate loss of funds. There can also be significant costs associated with investigating the attack, improving security measures and potentially recovering lost funds. These are all expenses that most businesses can ill afford.

Damage to Business Reputation

Beyond the financial losses, a BEC attack can have a devastating effect on a company’s reputation. Trust is a critical factor in any business relationship. When a company falls victim to a BEC attack, it can lead partners, customers, and even employees to question the company’s competence and security.

Reputation damage can have long-term implications for a company. It can lead to lost business, as customers and partners may choose to take their business elsewhere rather than risk becoming a victim of a related attack. It can also affect a company’s stock price and investor confidence.

Recovering from reputational damage is not easy. It requires a concerted effort to rebuild trust with customers and partners, which can be time-consuming and expensive. In some cases, the damage may be so severe that recovery is not possible.

Legal and Regulatory Implications

Finally, a BEC attack can have legal and regulatory implications. Depending on the nature of the attack and the information compromised, companies may face fines or other penalties from regulatory bodies. In some cases, they may also be subject to lawsuits from customers or partners who were affected by the attack.

Even if a company is not directly penalized, it may still face increased scrutiny from regulators. This can lead to additional costs and challenges, as the company may need to invest in improved security measures or deal with the fallout from a regulatory investigation.

4 Technologies That Can Help Against BEC

DMARC

Domain-based message authentication, reporting and conformance (DMARC) is an email authentication protocol designed to give email domain owners the ability to protect their domain from unauthorized use, commonly known as email spoofing.

The DMARC policy allows a sender’s domain to indicate that their emails are protected by sender policy framework (SPF) and/or DomainKeys identified mail (DKIM) and tells a receiver what to do if neither of those authentication methods passes – such as junk or reject the message. DMARC removes the guesswork from the receiver’s handling of failed messages, limiting or eliminating the user’s exposure to potentially fraudulent & harmful messages.

Implementing DMARC can help defend against BEC by making it more difficult for attackers to spoof a company’s email domain. However, it requires correct setup and ongoing management to be effective.

Advanced Email Filtering Solutions

Advanced email filtering solutions can be an effective first line of defense against BEC. These tools use complex algorithms to scan incoming emails for signs of phishing or other malicious activities. They can identify suspicious links, attachments or unusual language that might indicate a BEC attempt.

An advanced email filtering solution can also block or quarantine suspicious emails, reducing the chance that an employee will accidentally click on a malicious link or attachment. This technology can help prevent BEC attacks by stopping them before they reach the inbox.

Multifactor Authentication (MFA)

Another effective technology to thwart BEC is multifactor authentication (MFA). MFA requires users to provide two or more verification factors to gain access to a resource such as an email account. This can significantly increase the difficulty for an attacker to compromise an account, even if they have the password.

MFA can be particularly effective against BEC attacks as it adds an additional layer of security. Even if a cybercriminal manages to trick an employee into revealing their password, they would still need to bypass the additional authentication factor, which could be a fingerprint, a one-time code sent to a mobile device or a hardware token.

While implementing MFA can add a bit of complexity and inconvenience for users, the increased security it provides far outweighs the minor inconvenience.

AI and Machine Learning-Based Anomaly Detection

Artificial intelligence (AI) and machine learning (ML) are changing the way we combat cybersecurity threats like BEC. These technologies can analyze vast amounts of data and identify patterns that might indicate a BEC attack.

AI and ML-based anomaly detection systems can monitor email traffic and learn normal patterns of behavior. They can then flag any unusual activity, such as an unexpected request for a wire transfer or an email from a known contact that doesn’t match their usual writing style.

Conclusion

In the fight against BEC, there are numerous technologies at our disposal. Advanced email filtering solutions, MFA, AI and machine learning-based anomaly detection, DMARC and employee training and awareness programs all play crucial roles in defending against these attacks.

However, it’s important to remember that no single technology or practice can offer complete protection. A layered approach, combining multiple technologies and practices, will provide the best defense against BEC.