Proofpoint’s 2023 State of the Phish Report: Threat Actors Double Down on Emerging and Tried-and-Tested Tactics to Outwit Employees

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Organizations experiencing direct financial loss due to phishing up 76%; increasingly complex threats including ransomware, BEC and insider compromise call for company-wide security culture

 

SUNNYVALE, Calif., February 28, 2023Proofpoint, Inc., a leading cybersecurity and compliance company, today released its ninth annual State of the Phish report, revealing attackers are using both emerging and tried-and-tested tactics to compromise organizations.  Eight in 10 organizations (84%) experienced at least one successful email-based phishing attack in 2022, with direct financial losses as a result increasing by an astonishing 76% compared to 2021. And while brand impersonation, business email compromise (BEC), and ransomware remained popular tactics among threat actors, cyber criminals also scaled up their use of less familiar attack methods to infiltrate global organizations.

This year’s State of the Phish report provides an in-depth overview of the real-world threats, as sourced by Proofpoint’s telemetry encompassing more than 18 million end-user reported emails and 135 million simulated phishing attacks sent over a one-year period. The report also examines perceptions of 7,500 employees and 1,050 security professionals across 15 countries, revealing startling gaps in security awareness and cyber hygiene that propagate the real-world attack landscape.

“While conventional phishing remains successful, many threat actors have shifted to newer techniques, such as telephone-oriented attack delivery and adversary-in-the-middle (AitM) phishing proxies that bypass multifactor authentication. These techniques have been used in targeted attacks for years, but 2022 saw them deployed at scale,” said Ryan Kalember, executive vice president, cybersecurity strategy, Proofpoint. “We have also seen a marked increase in sophisticated, multi-touch phishing campaigns, engaging in longer conversations across multiple personas. Whether it’s a nation state-aligned group or a BEC actor, there are plenty of adversaries willing to play the long game.”

Some of this year’s key findings include:

Cyber Extortion Continues to Wreak Havoc

Seventy-six percent of organizations experienced an attempted ransomware attack in the past year, with 64% suffering a successful infection; yet only half regained access to their data after making the initial ransomware payment. Alarmingly, over two-thirds of respondents said their organization experienced multiple, separate ransomware infections.

Most infected organizations paid up, and many did so more than once. Of the organizations impacted by ransomware, the overwhelming majority (90%) had a cyber insurance policy in place for ransomware attacks, and most insurers were willing to pay the ransom either partially or in full (82%). This also explains the high propensity to pay, with 64% of infected organizations paying at least one ransom—a six-point increase year-over-year.

End Users Fall Prey to Bogus “Microsoft” Emails

In 2022, Proofpoint observed nearly 1,600 campaigns involving brand abuse across its global customer base. While Microsoft was the most abused brand name with over 30 million messages using its branding or featuring a product such as Office or OneDrive, other companies regularly impersonated by cyber criminals included Google, Amazon, DHL, Adobe, and DocuSign. It’s worth noting that AitM attacks will display the organization’s real login page to the user, which in many cases will be Microsoft 365.

Considering the volume of brand impersonation attacks, it’s alarming that nearly half (44%) of employees indicate they think an email is safe when it contains familiar branding, and 63% think an email address always corresponds to the matching website of the brand. It’s no surprise to see that half of the 10 phishing simulation templates most used by Proofpoint customers were brand-impersonation related, which also tended to have high failure rates.

Business Email Compromise: Cyber Fraud Goes Global

On average, three-quarters of global organizations reported an attempted BEC attack last year. While English is the most common language employed, some non-English-speaking countries are starting to see higher volumes of attacks in their own languages. BEC attacks were higher than the global average or experienced a notable increase compared to 2021:

  • The Netherlands 92% (not featured in prior analysis)
  • Sweden 92% (not featured in prior analysis)
  • Spain 90% vs. 77% (13 percentage point increase)
  • Germany 86% vs. 75% (11 percentage point increase)
  • France 80% vs. 75% (5 percentage point increase)

Insider Threats

Pandemic-related job mobility, coupled with post-pandemic economic uncertainty, has resulted in large numbers of workers changing or leaving jobs to the tune of one in four employees in the past two years. This job market trend makes data protection more difficult for organizations, with 65% reporting they have experienced data loss due to an insider’s action. Among those who have changed jobs, nearly half (44%) admitted to taking data with them.

Threat Actors Scale Up More Complex Email Threats  

Over the past year, hundreds of thousands of telephone-oriented attack delivery (TOAD) and multi-factor authentication (MFA) bypass phishing messages were sent each day—ubiquitous enough to threaten nearly all organizations. At its peak, Proofpoint tracked more than 600,000 TOAD attacks—emails that incite recipients to initiate a direct conversation with attackers over telephone via bogus ‘call centers’—per day, and the number has been steadily rising since the technique first appeared in late 2021.

Cyber attackers now also have a range of methods to bypass MFA, with many phishing-as-a-service providers already including AitM tooling in their off-the-shelf phish kits.

Room for Improvement with Cyber Hygiene

Threat actors always innovate, and once again this year’s report shows that most employees suffer security awareness gaps. Even basic cyber threats are still not well understood—more than a third of survey respondents cannot define “malware,” “phishing,” and “ransomware.” 

In addition, only 56% of organizations with a security awareness program train their entire workforce, and only 35% conduct phishing simulations—both critical components to building an effective security awareness program. 

“The awareness gaps and lax security behaviors demonstrated by employees create substantial risk for organizations and their data,” said Alan Lefort, senior vice president and general manager, security awareness training, Proofpoint. “As email remains the favored attack method for cyber criminals and they branch out to techniques much less familiar to employees, there is clear value in building a culture of security that spans the entire organization.” 

To download the State of the Phish 2023 report and see a full list of global and regional comparisons, please visit: https://www.proofpoint.com/us/resources/threat-reports/state-of-phish.

For more information on cybersecurity awareness best practices and training, please visit: https://www.proofpoint.com/us/product-family/security-awareness-training.

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About Proofpoint, Inc.

Proofpoint, Inc. is a leading cybersecurity and compliance company that protects organizations’ greatest assets and biggest risks: their people. With an integrated suite of cloud-based solutions, Proofpoint helps companies around the world stop targeted threats, safeguard their data, and make their users more resilient against cyber attacks. Leading organizations of all sizes, including 75 percent of the Fortune 100, rely on Proofpoint for people-centric security and compliance solutions that mitigate their most critical risks across email, the cloud, social media, and the web. More information is available at www.proofpoint.com.

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