While cyber risk continues to dominate headlines keeping many a board room, state house and situation room awake at night, those responsible for the physical infrastructure and the machinery that keeps a modern economy whirling are in for some sleepless nights as well. Virtual threats have real world consequences and the damage that can be wrought on tangible assets goes far beyond conventional cyber losses, which tend to affect computer systems and how software performs. With increasing frequency and severity, virtual threats are able to leap into the real world causing physical harm to infrastructure, electricity grids and other forms of property loss.
These threats emerge because of a volatile combination of acute and attritional threats combined with low levels of awareness and preparation. Acute threats emerge from deliberate acts carried out by hackers, cyber criminals or state sponsors of cyber warfare or terror, with the latter being the more sophisticated variety. The Stuxnet virus offers a rare glimpse into how sophisticated cyber warfare has become. Beginning 2010, Iranian nuclear centrifuges suffered irreparable physical damage because the Stuxnet cyber weapon caused them to spin at excessive rates triggering engine burnout. This attack set the Iranian Nuclear program back many years, buying vital time for other approaches, including diplomatic actions, to play out. While Stuxnet is a 6 year old technology and has likely been surpassed by cyber armaments with increasing sophistication and fields of damage, it marked a critical change in the nature of cyber warfare and something for which countries and companies alike must be prepared to confront.
Other acute cyber threats include the rise of business models being held for ransom. Akin to real world kidnappings, companies and government agencies are increasingly being hacked or, more commonly, their vital data is redacted precluding normal operations (which is increasingly likely in hospital groups) in demand of changes in conduct or monetary compensation.
