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Following the loss of over $90 million from two banks, officials around the world are sounding the alarm on an integral part of the day to day operations in the international banking industry. The Swift network was created as a message system for banks to authenticate the transfer of money between accounts internationally. Hackers were able to infiltrate the networks of Bangladesh’s central bank in February and subsequently used Swift to steal $81 million from the central bank’s account with the New York Federal Reserve. A second attack on a bank in Ecuador netted the attackers an additional $12 million. The ability to hack Swift has prompted calls for reforms in the international banking industry, along with increased security measures among banks worldwide.
The ease at which the hackers were able to make transfer requests with Swift concerns many in the banking industry, as the authentication of requests is an obviously vital component for the system. Swift has over 11,000 member banks and more than 25 million messages are sent each day. Security concerns could hurt the credibility of the system, which would cause headaches for the banking industry and impact millions of customers worldwide. To address concerns, Swift’s chief executive indicated that he would consider suspending member banks who do not have adequate security systems, along with conducting reviews to ensure security is tightened in the network.
The cyber attacks highlight the importance of computer and information security for businesses, especially in the financial sector. Further investment in security measures, increased vigilance at individual banks, information sharing, and a constant focus on identifying potential risks are needed to help prevent future breaches. Several banks have already taken measures to lower their risk, including reducing the number of people who have access to the system. Some have suggested the industry needs a completely new system to protect transactions, possibly based on blockchain technology utilized by Bitcoin. Whatever the solution is, the recent digital robberies have put a renewed focus on security in international banking.
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