How to Prevent Business Email Compromise in Cloud Workspaces

Business Email Compromise (BEC) is a sophisticated and alarmingly effective cyberattack that targets organizations of all sizes. Unlike traditional phishing that relies on malicious links or attachments, BEC is a game of deception. Attackers impersonate trusted individuals—like a CEO or a vendor—to trick employees into making unauthorized wire transfers or divulging sensitive information. As businesses increasingly rely on cloud workspaces like Microsoft 365 and Google Workspace, these platforms have become the primary battleground for BEC. This article will break down how these attacks work, their staggering financial impact, and provide a multi-layered strategy to prevent them in your cloud environment.

The Soaring Cost and Sophistication of BEC Attacks

The scale of the BEC problem is difficult to overstate. It has rapidly become one of the most financially damaging types of cybercrime, with global losses reaching a staggering $6.7 billion. The FBI reports that between 2013 and 2022, BEC scams accounted for over $51 billion in exposed losses.

These aren't just opportunistic attacks; they are highly targeted and increasingly common.

• Rising Costs: BEC is now among the most expensive types of breaches, costing organizations an average of $4.89 million per incident.
• Growing Frequency: BEC attacks increased by 30% as of early 2025, and they now account for over half of all social engineering incidents.
• Universal Threat: Even small organizations (under 1,000 employees) face a 70% probability of experiencing at least one BEC attack every week.

The threat is evolving quickly. Attackers are leveraging AI to craft more convincing and grammatically perfect emails, with some reports indicating that 40% of BEC emails are now AI-generated.

How BEC Attacks Work: The Anatomy of Deception

BEC attacks succeed by exploiting human trust and the inherent vulnerabilities in email communication. Attackers don't need to hack complex systems if they can simply persuade someone to open the door for them. The FBI identifies several common tactics:

• Executive Impersonation: The attacker spoofs or compromises the email account of a high-level executive (CEO, CFO) and sends an urgent request to a subordinate in finance or HR for a wire transfer or sensitive employee data.
• Vendor Impersonation (or "Fake Invoice Scam"): Attackers pretend to be a legitimate supplier or vendor. They send a fraudulent invoice with updated bank account details, redirecting payment for a real service to their own account.
• Conversation Hijacking: This is one of the most insidious forms of BEC. After gaining access to an employee's mailbox (often through a separate phishing attack), the attacker monitors email threads. They wait for a conversation about a payment or invoice, then insert themselves into the thread from a look-alike domain, providing new payment instructions. These attacks have seen a 70% increase, highlighting their effectiveness.
• Credential Theft: The attack begins with a standard phishing email designed to steal an employee's login credentials for their cloud workspace. Once they have access, they can launch any of the attacks above from a legitimate, internal account, making them nearly impossible to detect with traditional filters.

A Multi-Layered Defense: How to Prevent BEC

Because BEC attacks target technology, processes, and people, your defense must address all three areas. A single tool or policy is not enough. A robust prevention strategy requires a layered approach that hardens your technical environment, strengthens your financial procedures, and empowers your employees.

Layer 1: Technical Controls for Your Cloud Workspace

Your first line of defense is to make it as difficult as possible for attackers to impersonate your domain or compromise your accounts.

Implement Strong Email Authentication:

DMARC, DKIM, and SPF are three email authentication protocols that work together to prevent domain spoofing. Think of them as a digital passport for your email domain, verifying that messages are actually from you. Implementing DMARC is critical, as some insurers may deny BEC-related claims if this "reasonable care" standard isn't met.

Enforce Multi-Factor Authentication (MFA) Everywhere:

MFA is the single most effective control for preventing account takeovers. Even if an attacker steals a user's password, they cannot access the account without the second factor (like a code from an app or a physical security key). This should be a non-negotiable policy for all users, especially privileged ones.

Deploy Advanced Threat Protection for Cloud Email:

Traditional Secure Email Gateways (SEGs) were built for an on-premises world and often struggle to detect payload-less BEC attacks that originate from within your cloud environment (i.e., from a compromised account). These attacks look like normal emails, so they bypass filters looking for malicious links or attachments.

You need a solution built specifically for the architecture of Microsoft 365 and Google Workspace. Platforms like Material Security integrate directly with cloud office APIs to provide post-delivery protection. They can analyze message content, sender identity, and user behavior to identify anomalies that signal a BEC attempt, even if the email has already landed in an inbox. This includes detecting and automatically remediating threats from compromised internal accounts, a critical blind spot for legacy tools.

Layer 2: Procedural Safeguards

Strong processes create friction for attackers and give employees clear steps to follow when faced with a suspicious request.

Establish Strict Payment Verification Protocols:

• Create a mandatory policy that no request for a funds transfer, change in payment information, or disclosure of sensitive data is ever honored based solely on an email request.
• Require out-of-band verification. This means confirming the request through a different channel, such as a phone call to a pre-verified number on file (not a number listed in the email signature) or a face-to-face conversation.

Clearly Label External Emails:

Configure your email service to automatically add a banner like [EXTERNAL] to the subject line or body of all emails originating from outside your organization. This simple visual cue trains employees to be more skeptical of external messages, especially those asking for urgent action.

Develop and Practice an Incident Response Plan:

Know exactly what to do the moment a BEC attack is suspected. The plan should include immediate steps to:

• Secure the compromised account (reset password, revoke sessions).
• Contact your financial institution to request a recall of the funds.
• Report the incident to law enforcement, such as the FBI's Internet Crime Complaint Center (IC3). Time is critical, as recovery chances diminish rapidly.

Layer 3: The Human Firewall

Your employees are your last line of defense. Empowering them with the right knowledge and tools is essential.

Conduct Continuous Security Awareness Training:

• Annual, check-the-box training is not enough. The threat landscape changes too quickly.
• Focus training on the psychology of BEC. Teach employees to recognize the tactics of urgency, authority, and secrecy that attackers use.
• Use realistic phishing simulations that mimic modern BEC attacks, including pretexting—a tactic whose frequency nearly doubled last year.
  

Foster a Proactive Security Culture

• Leadership must champion a culture where employees feel safe reporting suspicious emails without fear of being blamed.
• Celebrate employees who spot and report potential attacks. Reinforce the message that it is always better to pause and verify than to rush and risk a catastrophic loss.

The Benefits of a Proactive BEC Prevention Strategy

Investing in a comprehensive BEC prevention strategy delivers clear and substantial returns.

• Financial Protection: The most obvious benefit is avoiding direct financial loss from fraudulent transfers, which can range from thousands to millions of dollars.
• Data Security: Preventing account takeovers protects sensitive corporate data, intellectual property, and employee PII from being stolen and exploited.
• Operational Resilience: A successful BEC attack causes significant disruption, including forensic investigations, legal fees, and lost productivity. A proactive defense keeps your business running smoothly.
• Reputational and Compliance Integrity: Demonstrating due diligence in protecting against BEC helps maintain trust with customers and partners and satisfies compliance requirements and cyber insurance underwriters.

Secure Your Cloud Workspace with Material Security

Traditional email security tools are not enough to stop modern BEC attacks that thrive within the collaborative, cloud-native environments of Microsoft 365 and Google Workspace. These attacks often have no malicious payload and can originate from trusted, legitimate accounts, rendering legacy defenses ineffective.

Material Security offers a fundamentally new approach to protecting your cloud office. By integrating directly with your cloud suite, our platform provides visibility and control that legacy gateways can't match.

• Account Takeover Protection: Material automatically detects suspicious logins and account behaviors, locking down compromised accounts in real-time to prevent them from being used to launch internal BEC attacks.
  
  
• Advanced BEC and Phishing Detection: We analyze a rich set of signals—including message content, sender behavior, and conversation history—to identify and remediate sophisticated social engineering threats that other tools miss.
• Data-Centric Security: Material can automatically discover and classify sensitive data within mailboxes (like credentials, PII, and financial information). We can then apply protective controls, such as requiring MFA to access high-risk messages, effectively neutralizing the risk even if an account is compromised.

Don't wait to become another statistic. Protect your organization from the most costly threat in cyberspace.

Learn how Material Security can defend your cloud workspace from Business Email Compromise. Request a demo today.