In a regulatory filing last week, JPMorgan Chase & Co. (JPM) disclosed the extent of the data breach that had compromised customer information on its Chase.com and JPMorganOnline websites as well as on the respective mobile applications. The numbers are shocking, with nearly 76 million households and 7 million small businesses affected by the transgression.
The cyber attack, on more than 90 servers of the bank, occurred as early as last June and was discovered in late August. JPMorgan had stated that the data breach included name, address, phone numbers and email addresses of its customers.
However, personal information such as account numbers, passwords, Social Security numbers, user IDs or dates of birth were not stolen. Also, the financial information of JPMorgan’s customers was not compromised.
Further, there is no evidence of fraudulent activities in the customer accounts so far. Hence, the initial pessimism over the data infringement was somewhat reversed and JPMorgan’s stock price gained nearly 2.5% on Friday to close at $60.30 per share.
JPMorgan is continuously monitoring the situation and aiding law enforcement agencies in the probe. Attorneys General of Illinois and Connecticut have launched separate investigation regarding the cyber attack. It is expected that other states might join the probe.
Notably, as no financial losses to the customers have been reported so far, the primary motive behind the attack remains debatable. On speculations that the cyber assault might be in retaliation against recent sanctions imposed on Russia over the Ukraine crisis, the Federal Bureau of Investigation and the National Security Agency have also commenced probes on the issue.
Further, the sophistication level and other technical details of the cyber onslaught indicate some government link. Nevertheless, investigations are still on and hackers from Russia or other Eastern European countries are also being considered as possible suspects.
Though at present no fraud has been detected, JPMorgan customers must remain vigilant about phishing and other such suspicious activities. It could so happen that the hackers may sell the stolen information to companies or groups that send spam phishing mails. Also, there are chances that hackers themselves might use these data to gather more information from customers.
Apart from JPMorgan, nine other financial firms have recently been hit by cyber attacks, as per a report in New York Times. However, the names of these firms and the extent of damages suffered could not be known.
Given the fact that the entire nation’s economy is dependent on it, the financial sector has always been a key target for cyber attacks. Additionally, the U.S. retailers including The Home Depot, Inc. (HD), Target Corp. (TGT) and The Michaels Companies, Inc. (MIK) have been continually facing such attacks in the recent past.
With the U.S. banks hit by a deluge of cyber assaults, the need to invest in cyber security is also gaining strength. By the end of this year, JPMorgan is estimated to spend around $250 million annually for cyber security, apart from building a dedicated team of about 1,000 employees focused on the issue,.
Currently, JPMorgan carries a Zacks Rank #3 (Hold).
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