As it became more difficult to directly attack an entity, attackers were resorting to secondary or tertiary access, the report said.

"Companies that provide products or services through outsourcing arrangements are highly attractive in this regard. Such providers usually have trusted relationships with their customers and are provided with extensive access," it said.

Various methods were adopted to compromise a third party:

• exploiting the direct connectivity that a provider has with customer data and networks;
• modifying the provider's software or other products with malicious content, which is then installed on customer networks;
• gaining access to credentials to allow seemingly legitimate access to the target network; and
• engineering sophisticated spear-phishing emails to deliver malware and thus compromise a target network.

"They are a very attractive compromise target for sophisticated adversaries as they have a broad range of customers, connectivity and accesses to their customers’ networks and data, and present opportunities for further network exploitation," the report said.

Different levels of risk exposure.

"Compromising MSPs can also be efficient tradecraft for malicious cyber adversaries. By compromising an MSP, a sophisticated cyber adversary can gain access to the data or networks of many MSP customers in one action."

The ACSC said it had observed the compromise of Australian arms of multinational MSPs and also observed adversaries using the compromise of the MSP to subsequently compromise the MSP’s customers.

Early this year, the agency became aware of the fact that the Australian unit of a multinational construction services company had been compromised.

The Australian Signals Directorate and CERT Australia investigated and found that the company had been infiltrated through an MSP.

Using an account associated with the MSP, malicious software was installed on the victim's network. The account had been created by the organisation that was attacked specifically for the MSP to log in and access its network.

"The example also highlights the risk that companies can be compromised through their service provider, without either the company or provider knowing. It also demonstrates the types of risks that organisations face when they outsource certain activities, or when they outsource with little consideration to security," the report said.

Commenting on the ACSC report, Dan Slattery, a senior information security analyst at security outfit Webroot, told iTWire: “The threat report details some concerning findings for both the government and private sector. While awareness of cyber crime is certainly on the rise, so too is the threat that it poses, with the Report claiming 47,000 cyber incidents took place in the past 12 months alone. Much of the report’s findings match up with the real world data that we are seeing from our customers.

“With Webroot’s latest research report revealing a cyber attack on an Australian business with 100 to 499 employees would cost on average $1.9 million, it’s clear that the constantly evolving threat landscape is having a costly impact.

“The Report’s findings demonstrate that simply relying on threat lists, virus signatures, and simplistic rules for protection is wholly insufficient. Proven, real-time machine learning-based analysis that includes an understanding of threat behaviour and context is necessary for accurate decision making and protection from today’s threats.”

Graphic: courtesy Australian Cyber Security Centre