Cybersecurity Threats to Financial Systems in Hong Kong on the Rise

Hong Kong’s financial services and logistics sectors have been hit hardest by ransomware attacks in 2023, according to a new study. The city’s status as a major finance hub has made it a prime target for cyber attackers, who are increasingly using advanced tools such as artificial intelligence (AI) to carry out their operations.

Ransomware Attacks on the Rise

A report by Palo Alto Networks found that there was a 49% increase in ransomware attacks in Hong Kong in 2023 compared to the previous year. The cybersecurity firm identified 3,998 posts from ransomware groups on websites for leaked information. Ransomware typically involves the theft or encryption of private data with a threat to release or delete that data unless a ransom is paid, often in cryptocurrency.

Key Findings:

• Hong Kong’s financial institutions possess “vast amounts of valuable data”, making them “hot targets” for multi-extortion attacks by ransomware gangs.
• The manufacturing sector was found to be the most impacted industry across the Greater China area, with limited visibility into its operational technology systems contributing to cybersecurity vulnerabilities.
• Median ransom demands were up 3% last year to $695,000 from $650,000 in 2022, but median payouts fell 32% to $237,500 from $350,000.

Organisations Push Back Against Attackers

While total payouts have risen substantially over 2022, Palo Alto Networks found evidence that organisations are seeing some success in pushing back against attackers. The discrepancy between median ransom demands and payouts may be the result of effective negotiations from incident response teams.

Effective Strategies for Defence:

• Adopting in-depth, multilayer defence systems
• Strengthening cloud infrastructure
• Developing an incident response plan

The Rise of AI in Ransomware Attacks

Attackers have also turned to more cutting-edge tools like generative AI to scale up their operations, which can help them find more vulnerabilities and develop malware. They are also using less noticeable and more automated methods of exploiting system weaknesses.

Key Takeaways:

• The median time from a system’s initial compromise to the exfiltration of data was down to just two days in 2023, a 45% decline from the nine days it took in 2021.
• Hong Kong firms are exploring potential use cases for AI in defending their assets.

Conclusion

To better guard against a rising number of attacks, organisations should adopt in-depth, multilayer defence systems. Strengthening cloud infrastructure and developing an incident response plan could also bring added benefits.