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While cybersecurity control has long been on the radar of government IT officials, it is also attracting the attention of municipal monetary organizations.
In a Dec. 14 poll conducted through Hilltop Securities, municipal bond analysts said they believed state and local governments were unprepared for cyberattacks, 63% said they thought governments were “barely prepared” for cyberattacks, and 30% said they were “somewhat prepared. “. Only 6% of state and local governments “on track to be ready, with none of the analysts contemplating “highly ready” or even “ready” municipalities.
The growing number of ransomware attacks facing state and local governments is putting municipal bond issuers on alert. The ransomware attack in Atlanta is a “watershed moment,” Omid Rahmani, associate director of U. S. public finance at Fitch Ratings, said in an interview Nov. 1. with Hilltop.
In March 2018, Atlanta attacked the SamSam ransomware that crippled the city’s online systems and crippled many of the city’s services. The hackers demanded a value of $51,000 in bitcoins, which the city refused to pay. Estimates of the final recovery charge were close to $17 million. .
One of the tweaks since the Atlanta attack, according to Rahmani, is that hackers no longer use shotgun-like attacks in which they target a giant number of entities and expect one or two of them to interact with the malware. They are now analyzing municipal disclosure documents to locate not only potential cyber vulnerabilities, but also a city’s “real appetite for payment,” he said.
The recent Kronos Cloud Solution platform breach that many municipalities and healthcare organizations rely on for payroll tracking and hard work is another attack vector that agencies will need to manage and monetary organizations will need to take into consideration.
These vulnerabilities have increased cyber insurance premiums. While nearly 90% of local governments surveyed through the Institute of Public Technology said they have cyber insurance, up from 78% in 2020, policies are complex and require agencies to adhere to strict cybersecurity controls.
Public sector entities with legacy systems and underfunded IT may struggle to find an affordable policy, especially since ransomware attackers demand higher profits. According to Fitch Ratings, those with insufficient policy may face even greater monetary and reputational dangers due to cyberattacks, which can simply have negative credit implications.
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