It sounds like the plot of a James Bond movie: A band of international bank robbers have made off with nearly $100 million, and bank executives are biting their nails as the thieves remain at large. But these heists happened in real life, and the thieves never actually set foot inside a bank. They used the banks’ access to the SWIFT network – a messaging technology that is little known outside the banking world – to remotely send fraudulent money transfer requests. The high-profile hacks rocked the banking world and threw into question the security of what was once thought to be an impenetrable network.
What is the SWIFT Network?
The Society for Worldwide Interbank Financial Telecommunications, or SWIFT, is not a money transfer system. It is a secure messaging network that financial institutions use to transmit information and instructions to each other. It was created in 1974 as a faster and more secure alternative to Telex messages. SWIFT network member banks use a standardized system of codes to allow banks in different countries to easily communicate.
In February, hackers stole the Central Bank of Bangladesh’s SWIFT network login credentials and used them to make nearly $1 billion in money transfer requests from the bank’s account at the Federal Reserve in New York to accounts in the Philippines and Sri Lanka. Most of the requests were intercepted and flagged for review by U.S. officials, but five went through, for a total of $81 million. Then, in June, officials in Ukraine reported that a bank in that country had lost $10 million to a similar hack.
Ukrainian officials stated that a number of other banks in Russia and Ukraine have been hacked but do not wish to be identified. Additionally, after the Bangladesh SWIFT network hack, a number of banks, most located in Southeast Asia, reported attacks that may have involved the SWIFT network. Since the alleged attacks targeted banks in different countries, each with its own reporting rules, the problem may be far worse than anyone realizes.
Notably, the hackers behind the SWIFT attacks did not actually hack into the SWIFT network. Instead, they used malware to compromise member banks’ systems and remotely access their SWIFT terminals, which they used to send the money transfer requests. However, SWIFT’s reputation has not emerged unscathed. Its CEO has been on a public relations campaign to restore faith in the SWIFT network, promising to implement stronger security procedures on its own end and possibly barring banks with inadequate security procedures from using SWIFT. While there are no competitors that can realistically emerge in the short term, the long-term impact on the future of the SWIFT network is unknown, especially if more banks are hacked and if Western banks begin to fall prey.
Lessons from the SWIFT Network Attacks
Organizations in all industries can learn three primary lessons from the SWIFT attacks:
- “Security through obscurity” can no longer be banked on. Few people outside of the banking industry have ever heard of SWIFT. In the pre-internet era, proprietary niche networks such as SWIFT enjoyed “security through obscurity”: Almost no one knew they existed, and little information was available about them. Thanks to the internet, this is no longer the case. Plus, hackers have been known to target obscure niche systems because they know they tend to be lax on security.
- An organization is only as secure as its people. The SWIFT network hackers used login credentials that they stole using keystroke-logging malware, possibly installed through spear-phishing or other human hacking techniques. This highlights the importance of organizations having robust cybersecurity plans that include continuous employee training on information security awareness and best practices.
- Appropriate security controls must be established for both people and transactions. In the aftermath of the SWIFT network attacks, JPMorgan Chase and Bank of England announced they would limit the number of employees with access to SWIFT terminals. Giving employees access only to the systems they need to perform their jobs is a sound practice, and these access levels should be reviewed periodically. Further, different security levels should be established for different types of transactions. A user name and password may be sufficient for a customer to log in to their account, but multi-factor authentication and external verification should be required for high-level, sensitive transactions such as large money transfers.
Many organizations do not have the resources to handle all of their information security needs in-house, which is why they should partner with a professional cybersecurity firm such as Lazarus Alliance. The cybersecurity experts at Lazarus Alliance have deep knowledge of the cybersecurity field, are continually monitoring the latest information security threats, and are committed to protecting organizations of all sizes from security breaches.
We offer full-service risk assessment services and Continuum GRC software to protect companies from data breaches, spear phishing attacks, and other cyber threats. Lazarus Alliance is proactive cybersecurity®. Call 1-888-896-7580 to discuss your organization’s cybersecurity needs and find out how we can help your organization.