News of an escalation in the U.S.-China cybersecurity case comes as credit card-linked credit card and debit card transactions are growing faster in the digital age. Total global card transactions rose 13 percent to $9.8 trillion in 2016, according to the Coalition for Retail Payment Services.
Card-linked credit and debit card sales increased 15 percent in the last quarter of 2016, increasing to more than $1 trillion. This compares to a 16 percent increase in total transactions and a 16 percent increase in card-linked sales the previous quarter.
Whether this story is good news or bad news depends on what you consider to be unique factors at play in the announcement. While the charges include information about “very sophisticated actors” and “regions of China that sought to steal from U.S. merchants,” there are still questions about who exactly is the target and who benefits from the cyber attacks.
Already, countries like China and Russia have stepped up their acts against a range of entities that attack their computer systems and steal classified information, and “trolling” messages to attack U.S. officials that may possibly lead to spread of information that harms their political interests. Given this kind of nature in the world of cyber espionage, is it different that a variety of online entities in various geographic locations may become active in the same activity and who gains from those efforts?
Even though “Chinese hacking” is mentioned in the statement of the FBI report, researchers continue to study the practice’s scope as the country has little record of practicing outside its borders for success. The investigation into the economic damage from the 2014 hacking attack on the federal government reportedly stated that the hacks generated around $48 million.
So can we predict how these types of incidents could affect U.S. companies? Possibly. Chinese enterprises may be looking to gain a certain economic advantage over their U.S. competitors. Russia, too, is active in the cyber espionage arena that may or may not ultimately be in the best interest of the United States.
The data breaches related to Target and JP Morgan Bank are recent examples, and U.S. businesses may attempt to monetize data stolen by a potential adversary. However, the many ways data get compromised is not always clearcut. Cyber criminals often target specific data, places, or people, and may be more selective about whom to access data they could financially profit from.
Another issue is the often blurred lines between activities conducted by legitimate companies that require digital transactions and those that likely violate foreign or domestic laws. There may also be an impact from foreign political challenges within the U.S. such as the fallout from the situation involving Donald Trump’s ban on immigrants from certain Muslim countries.
Andrea Miteski, PhD and MD in the field of reinsurance. Long term senior insurance executive with specialization of reinsurance optimization.