The Fall of SVB and the Supply Chain Cyber Threats to Come
It was an amazing experience watching the sequence of events and responses of people to the SVB crisis in the circles of Entrepreneurs, LPs and VCs, and portfolio companies to the rapid manner in which competitor banks responded to the situation, making it practically impossible for SVB to get out of this one. I am looking to the next chapter in this story and crossing my fingers for all involved.
As a Founder and Entrepreneur, I am mostly afraid of the domino effect here, as startup companies cannot access capital to keep their business running. Especially now, at a time of greatest vulnerability in our industry.
In the past 24 hours, large and small companies started moving their business out of SVB, along with the lockboxes and accounts where customers remit payments. These sudden changes introduce a massive opportunity for hackers to exploit that company’s 3rd party/supply chain security vulnerabilities.
Let me propose an example of a “CFO sending a notice to all of the customers, due to the failure of SVB, we’ve changed our bank account to… and please transfer any future payments to…”. Hackers love situations that create uncertainty, suggesting that in the following weeks, many new attack vectors in this field will emerge.
What measurements can we take as Cyber practitioners to minimize the risk to our companies? For one, raising awareness of this risk and notifying your finance teams to be on the alert for every business transaction. It is likely that a lot of Phishing attempts will probably mention transactions around SVB and other related business; so your teams will need to verify in the most direct way with every 3rd party
Situations like this underscore the importance of having adequate risk controls and leadership teams need to ask themselves: “Do I know who my 3rd-parties are?”
Demi Ben-Ari, Co-Founder & CTO of Panorays, a company focused on solving the problem of 3rd-party Cyber Risk.
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