Modern Trader
What You Need to Know about Social Engineering

Modern Trader
What You Need to Know about Social Engineering

Garrett Baldwin

In the October issue of Modern Trader, Garrett Baldwin sat down with four hackers to discuss the threats to the financial sector. The complete interview can be read on newsstands at Barnes & Noble this week. 

So how are hackers so effective at getting access to information? As the experts explain, hackers user a process known as social engineering. And companies need to learn how this works or else they could find themselves vulnerable to a sophisticated attack that could cost them millions, if not billions, over the long run.


Hackers make a decision to attack a firm through one of two methods: technology or socially, says Mr. Green, a security specialist who asked to remain anonymous during our interview with four ethical hackers.

It’s possible to attack a financial company through the network system. Another expert who wished to remain anonymous, Mr. Orange, says he could walk into a financial firm and attempt to exploit security breaches just by signing into a guest network in the lobby. There’s the idea of dropping USB flash drives on the ground and hoping someone in an organization who is intellectually curious – and naïve – enough to plug it into their work computer. 

“I’ve seen this attack before,” says Erdal Ozkaya. “It cost a company $3 million.”

But the human element, or social engineering, is responsible for roughly 90% of all major breaches, according to Mr. Green.  He explains that hackers are able to breach networks and exploit vulnerabilities due to the simplicity of human nature. “It’s tough to talk to people about this – especially on the cognitive size. The bulk of high impact attacks are socialized.”

Social hacking is the process of gathering information on their hypothetical secretary Debra, or exploiting the person in the company who thinks that it’s okay if their security is breached because they’re not high on the latter.

“The social engineer understands human desires and expectations. They project a fantasy that others want to have,” says Mr. Green. “The biggest problem is that people are so easy to fool.”

The digital world is significantly different from the physical world, but humans forget it too often.. 

“When you live in a city, you know what streets to walk down and what alleys not to go down,” says Mr. Orange. “In the cyber world, hackers make the rules.”

Cyber expert Terry Bradley explains that a client in Alabama said that cyber security wasn’t a major priority because they worked in Alabama. Why would anyone want to attack a company in Alabama when New York City is the financial center of the galaxy?


“Online, you are two milliseconds away from Ukraine or China. They’ll hack you and your company if you’re in Alabama or New York City just the same. You might live in “Safesville,” but on the internet, your IP address is right next door to the bad part of town.”

That type of naiveté is matched only by the unwillingness to understand the true cost of compliance. With the SEC releasing its new compliance guidelines and best practices, companies are likely looking at the price tag and debating next steps. 

However, the four experts argue that companies always look at their finances the wrong way.
“Security always comes later,” says Mr. Orange, another hacker who wished to remain anonymous.

In Bradley’s case, he mentions the company that was hit by an email scam. At the time, he was talking to them about conducting an assessment of their networks. When they got cold feet about the costs, it wasn’t long until a six-figure breach hit the firm through a phishing attack that saw an employee authorize a huge wire transfer because the person believed the fake emails from the CEO were authentic. 

Meanwhile, companies like Home Depot and Target have experienced blows to their reputations following the massive breaches that compromised data of millions of consumers. 

“How much are you willing to pay to have your reputation back?” Ozkaya asks. “How much are you willing to lose?”

According to these experts, these are the real costs of compliance.  

And forward-thinking organizations are now taking it very seriously.

Be sure to read the complete article Assumed Breach in the October issue of Modern Trader and check online at Futuresmag.com

About the Author

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Garrett Baldwin is the features editor of Modern Trader. He lives in Chicago.


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