For attackers and fraudsters around the web, financial institutions have a great big ‘X’ marked on their backs. Some estimates suggest that banks and other companies in the financial sector are 300 times more likely to face cyber attacks than other businesses, with IBM suggesting that nearly 20% of the total cyber security incidents in a given year come from attacks on banks. Last year, Mastercard claimed that they were fighting off more than 460,000 intrusion attempts every day.
When SWIFT messages are utilized in bank heists like the 2016 Bangladesh Bank attack, reports often refer to SWIFT having been “hacked.” In reality, it’s the banks themselves that have had their cybersecurity flaws exposed, and the SWIFT network was only used as a tool for the fraudsters to gain the trust of the financial institutions that are performing the transfers. This might seem like a small nit to pick, but in some ways it’s an important distinction to draw. Why? Because it centers “trust” as one of the most important elements of both successful fraud and successful fraud prevention.
According to IBM, the average cost of a data breach in 2019 was just under $4 million—and this is nothing compared to the costs of some of the more high profile security lapses in recent history. Since the Equifax breach was uncovered in the 2017, it’s estimated that it’s cost the company $1.4 billion. And this is before we talk about other types of attacks beyond data breaches, like the SWIFT transaction fraud that lay at the heart of the infamous Bangladesh Bank heist. Really, it’s hard to overstate how critical data security is for international businesses, especially in the financial sector.
SWIFT fraud is on the rise. In a recent EastNets survey of 200 of the roughly 11,000 financial institutions on the SWIFT network, 80% of respondents said they had experienced at least one attempt at SWIFT fraud in the three-plus years since the infamous Bangladesh Bank heist. In Asia, that number is closer to 100%, and the number across the board is probably somewhat higher than that—given that only 40% of the banks surveyed were “very confident” that they were successfully detecting every fraud attempt on their network.
The rapid spread of the coronavirus around the world is causing lightning-fast changes in almost all areas of our lives, and it can be hard for even the most diligent newsreaders to keep pace. As with any volatile situation, hackers are exploiting the fears and confusion over the virus to perpetrate phishing scams and gain access to sensitive information—but this isn’t a typical, run-of-the-mill crisis: on the one hand, things are so serious that some hackers have actually promised not to launch new ransomware attacks against any healthcare targets during the pandemic—on the other, the US is warning of an ‘unprecedented’ wave of coronavirus scams already in the works.
Every year, the bar for SWIFT CSP compliance gets pitched a little bit higher. For 2020, a number of advisory controls were upgraded to mandatory, including a control related to shrinking the threat surface in banking organizations through application hardening. This is a wise tactic: as attackers carrying out fraudulent transactions get more sophisticated, financial institutions need to do the same when it comes to information security. At the same time, it’s not clear that increased mandatory advisories will be enough to stem the year-over-year increase in SWIFT CSP fraud.