Hacking Threat Imminent? US Sees Interbank Payment Network Vulnerability

The attempted interbank heist of nearly $1.0 billion from the central bank of Bangladesh, has caused a tidal wave of interest from US regulators and global Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term groups, given the vulnerabilities underscored by SWIFT’s payment network.

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The genesis of the concerns stemmed from the theft of $81.0 million from the Bangladeshi central bank, which prompted a multinational investigation. Since then, officials have warned that vulnerabilities in SWIFT’s payment network, as well as errors from group technicians, could have propagated the theft itself.

Hackers had previously managed to modify SWIFT’s client software, exposing several vulnerabilities across such a globally diverse system. The Bangladesh Bank attack in April also succeeded in manipulating SWIFT client software known as Alliance Access. This followed a previous attempt back in February in which cyber criminals tried to transfer upwards of $951 million from the Bangladeshi central bank's account at the Federal Reserve Bank of New York.

Bangladeshi police had alleged that their systems were exposed to a greater threat of breaches after SWIFT technicians connected a new bank transaction system just three months before the $81.0 million heist. The fallout seen across SWIFT’s network has now resulted in an expanded investigation of twelve more banks, each using SWIFT’s payment network.

US Weighs In

Since then, US regulators have warned banks regarding the potential for additional cyber attacks that are linked to the interbank messaging system, which is responsible for billions of dollars of global funds and commerce.

As a result, the US Federal Financial Institutions Examination Council (FFIEC), an assortment of banking regulators, issued a warning encouraging banks to do due diligence and if needed, fortify the security of their links with interbank messaging and payment systems.

The FFIEC also warned that unauthorized transactions could subject the originating bank to losses and compliance breaches. To date, the FBI has been working to investigate a number of security breaches, though since the attempted heist back in April, regulators and banks alike are on high alert.