What is an internal threat?

Quick Answer: Definition of an Internal Threat

An internal threat is a risk to an organization that originates from within the organization itself, often from its employees. Internal threats can include anything from data theft and security breaches to embezzlement and sabotage by disgruntled or dishonest employees. Some examples of internal threats include:

Employees stealing sensitive data or intellectual property
Employees intentionally leaking confidential information externally

Employees installing malware or opening suspicious email attachments that compromise network security
Dishonest employees embezzling funds or manipulating financial reporting
Disgruntled employees sabotaging systems, deleting data, or physically damaging equipment

Employees failing to follow security policies and procedures

Internal threats are especially dangerous because employees often have access to an organization’s most valuable assets and systems as part of their jobs. This privileged access can be abused or mishandled, whether intentionally or accidentally.

What makes internal threats a significant risk?

There are several factors that make internal threats a major security concern for organizations:

Access and trust: Employees by default have a higher level of physical and digital access to an organization’s facilities, resources, and data compared to external parties. Organizations also tend to inherently trust employees more than outsiders.
Insider knowledge: Employees know the organization’s processes, systems, assets, and potential vulnerabilities intimately, which can be exploited for illegal or harmful purposes.
Difficult to detect: Internal misuse of access privileges, data theft, or fraud can be harder to detect and investigate than external attacks.

Negative impacts: Damage from insider threats like IP theft, embezzlement, and sabotage can have severe financial, operational, and reputational impacts.
Common occurrences: Insider threats are widespread – one study found that 27% of cybersecurity incidents involved internal actors.

In summary, the position of trust and privileged access that employees hold makes them capable of causing tremendous harm through malicious, accidental, or negligent behavior. Organizations suffer billions annually in losses from internal threat incidents.

What are some examples of internal threats?

Some of the most common categories of internal threats include:

Data theft and leakage

Data theft by insiders is a major security risk – employees copying or stealing sensitive customer data, financial records, product designs, source code, and other proprietary information from the organization, either to sell externally or for personal benefit. Even unintentional data leaks, like sending an email to the wrong recipient, can expose confidential data.

IP and trade secret theft

Employees may steal protected IP like patents, source code, and trade secrets when leaving an organization and bring that IP to a competitor. This can damage an organization’s competitive position and lead to lost revenue.

Embezzlement and financial fraud

Insiders with access to financial systems may embezzle funds, manipulate transactions, or commit accounting fraud for personal gain. An estimated 10% of organizations experience embezzlement crimes annually.

Sabotage and destruction

Disgruntled insiders can deliberately sabotage systems and operations by deleting data, corrupting networks, damaging equipment, shutting down critical infrastructure, or even triggering physical disruptions and destruction.

Security violations

Employees intentionally bypassing security controls and policies, such as sharing passwords, disabling firewalls, installing unauthorized software, and ignoring endpoint protections. These actions can expose networks and data to external and internal threats.

Collusion with external parties

Insiders may collaborate with external threat actors to compromise security controls and provide access to systems and data in exchange for financial compensation.

Accidental insider threats

Even without malicious intent, insider errors and negligence like failing to properly secure data, misconfigured access controls, and lost devices can still cause data breaches, operations disruptions, and policy violations.

What are the potential impacts of insider threats?

Internal threats can damage organizations in multiple ways:

Financial loss – through stolen funds, fines, business disruption, and remediation costs.
Loss of sensitive data – that can erode customer trust and trigger legal/regulatory penalties.
Intellectual property theft – which deprives organizations of their competitive advantages.

System downtime – from sabotage, data deletion, and damaged infrastructure.
Reputational damage – when breaches and scandals tied to insiders become public.
Operational disruption – through disrupted workflows, processes, and production.

One study estimated the average cost of insider threats at $11.45 million per year for large organizations. Smaller businesses suffer estimated losses of over $200,000 on average.

Who are the biggest insider threat risks?

While any employee can become an insider threat under the right circumstances, some of the highest risk categories include:

Privileged users – System administrators, DBAs, executives, etc. with extensive access to assets.

Disgruntled employees – Those facing termination or passed up for promotion.
Negligent / non-compliant users – Who disregard policies and training.
Third-party contractors – External vendors with internal access privileges.

Ex-employees – Who may retain access after leaving the company.
Trusted business partners – With authorized access to internal networks, data.

While malicious insiders deliberately set out to harm an organization, even well-intentioned employees can accidentally expose systems and data through human error. A holistic insider threat program needs to consider both deliberate and accidental risks equally.

How can organizations protect against internal threats?

An integrated strategy combining people, processes, and technology is key to mitigating insider threats:

Policies and procedures

Security and access control policies limiting employee privileges.
Background checks for employees during onboarding.

Data classification and acceptable use policies.
HR processes for employee termination and offboarding.
Security training to encourage employee compliance.

Technical controls

Access controls, multifactor authentication, endpoint monitoring.
Data loss prevention tools to prevent leakage.
Monitoring employee transactions and activity.

Email monitoring and web content filtering.
Vulnerability assessments of high-risk employees.

Culture and behavior analysis

Foster an ethical workplace culture.

Employee engagement initiatives.
Monitor changes in employee sentiment, conflicts.
Perform behavioral analysis to identify high-risk users.

Curtail perceived inequities and grievances.

With a layered insider threat program covering people, processes, and technology, organizations can substantially reduce their risk and potential losses from malicious and negligent insiders. But 100% prevention is impossible – rapid detection and response are also key.

How can companies detect insider threats early?

Some techniques to identify potential insider threats proactively include:

User behavior analytics – Detect unusual user activity that deviates from baselines.
Threat intelligence – Feed both internal and external threat data into analytics.
Data loss prevention – Identify attempts to exfiltrate sensitive data.

Honeypots – Tempt insiders to access decoy systems, files, money.
Endpoint monitoring – Scan for usage of external media, unauthorized software/hardware.
Dark web monitoring – Check if internal data shows up for sale externally.

Email and social media monitoring – Flag malicious communications.

The goal is to detect potential insider threats through these technical means before tangible damage occurs. However, organizations should also encourage employees to self-report issues through workplace tips hotlines and similar reporting mechanisms.

How should companies respond to insider threat incidents?

Once a potential insider threat is detected, organizations need to respond methodically:

Assemble an incident response team of HR, IT, legal, executives.
Collect and preserve evidence from impacted systems.
Determine scope and damage from the incident.

Disable compromised user accounts and halt access.
Begin remediation like resetting passwords, patching vulnerabilities.
Investigate the incident’s root cause.

Determine motive and whether policies were violated.
Interview suspects and make determinations.
Involve law enforcement if criminal actions occurred.

Update cyber insurance carrier and external stakeholders.

Proper documentation and evidence collection is crucial for successful investigation and potential prosecution. Organizations should also aim to balance employee privacy rights with the need for thorough incident investigation.

Post-incident, the organization should re-evaluate security controls, staff training, and existing policies to prevent repeat occurrences. Cyber insurance can help offset financial losses from insider threat incidents.

Conclusion

Due to their privileged access and knowledge, employees and other insiders can pose one of the most serious security threats to modern organizations through both intentional attacks and accidental exposures. An insider threat program encompassing security controls, monitoring, culture, and rapid response is essential to counter this prevalent risk. With proper vigilance, processes, and technology, companies can limit their vulnerability to dangerous insider actions.