Managed Service Providers striving to protect their customers’ data face an increasingly prevalent challenge: data exfiltration. 

How can MSP leaders prepare for and mitigate this growing threat? Read on for an overview of data exfiltration, its operation, and the best defense against it.

The Evolution of Data Exfiltration

Data exfiltration is the unauthorized data transfer from a computer or network to an external server or device.

While bad actors can exfiltrate data using analog methods such as printouts, this article will focus on digital exfiltration.

Attackers focus on sensitive data, such as personally identifiable information (PII), financial records, and intellectual property (IP). They exploit vulnerable endpoints, cloud applications, and human error to access specific targets.

Exfiltration is especially dangerous as its impacts can go undetected for long periods. Data exfiltration often focuses on stealthily removing data from a network rather than locking or encrypting it in exchange for payment.

A report by Delinea finds that data exfiltration is an emerging trend and motivator for cyber attackers. The stolen data is used in cases of identity theft or corporate espionage.

“In the digital world, identities have monetary value and are used for data exfiltration. Criminal Hackers go where the money is like bank robbers did earlier in our history.”

Chuck Brooks, Cyber Security Expert
Growing Cyber Threats to Industry in 2024

Additionally, exfiltration can be combined with a traditional ransomware attack. In this two-level attack, after a ransom is paid to unlock encrypted data on the victim’s network, a second ransom is requested to (hopefully) stop the attackers from publicly releasing the valuable data exfiltrated before the network encryption.

Common Techniques

Cybercriminals have a variety of methods for exfiltrating data. Here are a few standard techniques:

  • Malware: Attackers install malicious software on a system utilizing phishing attacks, infected emails, or exploiting vulnerable endpoints and security gaps. The malware is used to steal data and send it back to the attacker’s server.
  • Insider Threats: Data loss stemming from the behavior of neglectful or disgruntled employees. Inside threats can include physically removing data on storage devices or unauthorized uploads to personal cloud storage accounts.
  • Unsecured Network Traffic: Attackers can intercept sensitive data sent via unencrypted networks. Risk is created when data is transferred over public Wi-Fi networks or internal networks without sufficient security protocols.

Detecting Attempts

Organizations must move fast to mitigate the damage from exfiltration. Signs that indicate data exfiltration is happening or occurred recently include:

  • Unusual network activity—large external file transfers at strange times, connections to new IP addresses or data repositories, emails with large attachments, or unexpected network configurations
  • Odd user behavior—strange activity like excessive failed login attempts, unauthorized access attempts to sensitive data, increased use of personal cloud storage or attempts to disable security software
  • Missing files or documents

Legacy Strategies to Prevent Data Exfiltration

A multi-layered security approach that accounts for insider and external threats can significantly reduce the risk of data loss from exfiltration.

Organizations can better prevent and respond to data breach attempts by implementing security protocols and data security tools.

Here are some traditional approaches for preventing exfiltration:

  • Implement solutions to identify sensitive data and prevent transfers: Data Loss Prevention (DLP) tools, Security Information and Events Manager (SIEM) software, Intrusion Detection Systems (IDS), and other tools protect data and monitor networks, significantly limiting how much attackers can access and transfer off the network.
  • Strong Password Policies and Multi-Factor Authentication (MFA): Reducing security vulnerabilities stemming from user behavior is essential. Complex passwords and MFA add an extra layer of security to user accounts.
  • Regular Security Awareness Training: Develop security best practices and educate employees to significantly reduce the risk of data leakage from the inside.

Incident Response and Damage Control

Despite these precautions, data exfiltration may still occur. Organizations should develop and operationalize an incident response plan to minimize the damage and recover quickly. Your plan should include steps for:

  • Identifying the breach: Quickly identifying the source and scope of the breach is critical for taking further action
  • Containing the threat: Isolating infected devices or patching vulnerabilities
  • Recovering data: Restoring lost data from backups to ensure business continuity
  • Notifying law enforcement and compliance agencies as required by law
  • Notifying affected individuals: If customer data is compromised, alerting the public per data breach notification laws

The Dynamic Data Encryption Approach

While the above protection layers are essential, they can be insufficient—something must be done to neutralize the consequences of exfiltrated data classified as having high financial risk.

That neutralizer is zero-latency dynamic data encryption.

Dynamic data encryption uses cryptographic keys to encode or decode data, making it unreadable to anyone who doesn’t have the key. This means that even if attackers manage to exfiltrate data, it will be useless to them without the decryption key.

Dynamic encryption can even be applied to off-network data.

Encryption can be applied to data at rest (stored on devices and servers) and in transit (data being transmitted over a network).

Dynamic data encryption solutions continuously facilitate the deployment of encryption services, configuring and applying rules across the customer network. Together, MSPs and their customers determine what requirements the solution will address, including:

  • What actions to take on the data based on attribute—encrypt, move, or delete
  • What types of data to encrypt and for how long
  • What applications can access and decrypt sensitive data
  • Which users or user-level permissions are granted access

While encryption is essential for mitigating the effects of data exfiltration, it is also highly effective in protecting data during its lifecycle and in the event of a traditional cybersecurity breach.

If data is compromised or removed from the network, organizations can demonstrate compliance with the relevant regulatory frameworks, limiting exposure to fines and reputational damage.

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