Data Breach Outlook: Finance Surpasses Healthcare as Most Breached Industry in 2023

Data Breach Outlook:

Finance Surpasses Healthcare as
Most Breached Industry in 2023

1

Data Breach Outlook: Finance Surpasses Healthcare as Most Breached Industry in 2023

Data Breach Outlook: FinanceSurpasses Healthcare as Most
Breached Industry in 2023
By David White,
Global Head of Breach Notification, Cyber Risk

While businesses might have become more prepared for direct cyberattacks, 2023
demonstrated that unfortunately a business is only as secure as the organizations within
their environment. Third-party risk, which is to say any risk to an organization by external
parties in its ecosystem or supply chain, was the headline culprit in 2023. This wasgreatly due to the extensive impact of the CLOP ransomware gang’s exploitations of theMOVEit Transfer vulnerability as well as the rise of social engineering attacks like businessemail compromise (BEC).
Kroll handles thousands of incidents every year and saw evidence of this breach having asignificant impact on the most breached industries. In this year’s Data Breach Outlook,
Kroll has ranked which industries continue to top the charts.

The Finance Sector Overtakes Healthcare for Most
Breached Industry
In 2023, finance was the most breached industry, accounting for 27% of the breaches
handled by Kroll, compared to 19% in 2022. While in the spotlight for 2022, healthcare
dropped to second place, yet still accounted for 20% of breaches. This is only slightly lessthan in 2022 where it accounted for 22% of breaches.
The financial sector is an attractive target for cyber criminals not only for the immediate
financial gain but also due to the wealth of sensitive customer information it holds.
However, the 2023 increase in data breaches is likely due to the CLOP ransomware activity
impacting small- to mid-sized regional banks. Further, Kroll observed several cases in2

Data Breach Outlook: Finance Surpasses Healthcare as Most Breached Industry in 2023

which financial institutions were affected by the CLOP exploitation when a third party they
worked with was posted to the victim shaming site, exposing data related to theircustomers. This type of activity and its impact underscores the fragility of organizational
interdependence and the extent of third-party risk.
Further, the professional services moved up from fifth most targeted industry to third in2023. This could be due to the steady rise in BEC cases particularly affecting this industry,
with a high concentration of this activity related to legal firms from the BLACKCAT
ransomware gang. Indeed from Q1 to Q3 of 2023, Kroll saw BEC attacks increase by 21%.
2023 Rank

Industry

1

Finance2

Healthcare

3

Professional Services

4

Retail5

Industrial Services

6

Technology

7

Education

8

Manufacturing

9

Government

10

Insurance3Data Breach Outlook: Finance Surpasses Healthcare as Most Breached Industry in 2023

Third-Party Security Risks Caused Ripples Across Multiple Industries
While the finance and healthcare sectors battle it out for a gold and silver medal yet again,
perhaps a more interesting story is found in the middle of the chart.

Percentage of Data Breaches From 2021 to 2023, by Industry
27%

22%

22%
20%

19%
16%

12%

11%

6%

5%

11%
8%

7%

Healthcare Professional
Services

8%
6%

5%

3%

Finance10%3%Retail2021

IndustrialServices

4%Technology2022

7% 7%

6%
3% 3%6%3% 3%1%

Education Manufacturing Government Insurance

2023

Notable shifts in 2023:• While ranking third in 2022, industrial services dropped down to fifth place, and professional
services took the bronze position on the podium. In fact, there was a 45% year-over-year(YoY) drop in data breach cases observed by Kroll in the industrial services sector.
• Further, data breaches in the professional services sector increased from 3% in 2022 to12% in 2023.
• While remaining in fourth place, the retail industry is seeing a steady increase in databreaches over the last few years accounting for 11% of data breaches.
• Data breaches on manufacturing and government remain low, with industrial services
looking likely to follow the same trend.
• Breaches in the insurance sector fell even lower in the top 10 table of most breachedindustries, going from the top five in 2021, to 10th place in 2023, an 81% drop in breaches
YoY when compared to 2022.
• An industry that has made a huge impact in the data breach space is technology.
While just missing out on a top five spot, the technology sector saw a YoY increase of 40%.

42%

Data Breach Outlook: Finance Surpasses Healthcare as Most Breached Industry in 2023

I’m a Technology Company, and I’ve Just Been Breached
Further investigation into the data unveils some insights into how concerned consumers arein these respective industries about the data breaches in question. While the financial
sector might have experienced the most data breaches in 2023, it was in fact thetechnology sector that seemed the most concerned. Indeed, the highest number ofincoming calls related to these data breaches came from the technology sector as well as
the highest number of consumers who took up identity protection – often a combination ofidentity and credit monitoring.
In fact, in 2023, Kroll saw over a quarter of a million calls from the technology sector andprovided over a million identity monitoring service activations activations.

Percentage of Calls Following Data Breaches in 2023
Technology
53%

Healthcare
19%

Finance
12%

Professional
Services 5%

Percentage of Identity Monitoring Service Activations Taken Up
Following Data Breaches in 2023
Technology68%

Healthcare
13%

Finance10%

Education3%5Data Breach Outlook: Finance Surpasses Healthcare as Most Breached Industry in 2023

Findings include:• Fifty-three percent of enquiries coming from consumers in 2023 following being notified of abreach were related to the technology industry; only 12% were in the finance industry.
• Of all the credit and identity monitoring taken up by consumers, 68% were involved in technology
breaches, compared to only 13% in healthcare and 10% in finance.
• Technology saw a 47,264% YoY increase in the number of calls following a breach, whereas financesaw a drop of 53%.
• Technology also saw a 31,219% YoY increase in the amount of identity monitoring taken up,compared to a drop of 55% in the finance sector.
• Healthcare also showed YoY increases in both the number of enquiries following a breach (14%)
and in the amount of credit or identity monitoring taken up (99%).

This astronomical increase in calls and monitoring for the technology sector all point to the same
glaring cyberattack from 2023 – the MOVEit transfer vulnerability.
The MOVEit vulnerability was a perfect example of the ripple effect one attack can have on anecosystem of connected companies. Indeed, third-party risk is now presenting as a key area ofconcern due to shifting threat actor behaviors and priorities.
Within the technology sector group observed by Kroll were businesses that deal with pensions
and benefits. This could account for the sharp increase in phone calls made following being
notified of a breach as the age demographic of this particular industry could be more inclined tocall a helpline in order to ensure their pensions and benefits remain safe.
This could also be of interest to insurers looking to estimate the financial exposure of databreaches. A more engaged population of consumers impacted by a data breach could result in
more identity monitoring and higher costs for the insurer and/or organization.
Interestingly, Kroll data shows that in total, over 91 million people were notified of a data breachin 2023. This can be broken down in the below communication channels:

65,658,461

19,187,822

physical letters sent

emails sent

7,122,441

SMS texts sent

Data Breach Outlook: Finance Surpasses Healthcare as Most Breached Industry in 2023

The Types of Scams Remain Consistent
When looking at the identity theft trends and how victims are being targeted, one method inparticular continues to be the most common; new credit card fraud. Utilities fraud and new cellphones fraud were also trending in 2023.

Percentage of Identify Theft Cases by Type of Fraud
New Credit Card Fraud

52%

Utilities Fraud

15%

New Cell Phone Account Fraud

13%

New Bank Account Fraud

8%

Other

4%

Auto Loan Account Fraud

3%

New Inquiry

3%

Payday Loan

2%

Understanding the drivers behind the Data Breach Outlook figures is subjective, and it isimportant that businesses combine this data with their own insight from talking tocustomers and market research. It is also true that while an industry may make up less ofthe overall number of data breach cases, it is not immune from the impact of a data breachand should similarly have playbooks if an incident was to occur.

To understand more about how the data breach notification process works
and what you can do ahead of time to ensure it runs as smoothly as possible
with minimal financial and reputational damage, please reach out to ourdata breach experts.
You may also be interested in reading our 2022 Data Breach Outlook –Healthcare is the Most Breached Industry of 2022.
For more insights, visit the Cyber Blog at kroll.com/cyberblog

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