The world cyber system is unsafe. People need to be cautious. It has just not happened in India, where 3.2 million (3.02 crore) debit cards were compromised in 2016. The US Federal Reserve suffered more than 50 cyber breaches between 2011 and 2015.
The Fed records describe several incidents as “espionage” as its computers systems play a critical role in global banking, says an international agency report.
At least 100 major banks across the world have suffered such attacks and been looted of $ 1 billion.
The probe by a Bengaluru based firms into Indian 3.02 crore Indian cards outsourced to Hitachi by banks and National Payments Corporation of India (NPCI) revealed that most Indian and corporates’ anti-virus and malware device is no match to the targeted cyber attacks.
Experts says that similar attacks can happen to any payment mode – banks, wallet firms (recently some reported such frauds), UPI (universal payment interface) or IMPI (immediate payment service), retailers (e-commerce or brick and mortar) or point of sale machines (POS).
A February 23, 2017 report says even Aadhar is not safe. Three firms are being probed for attempting unauthorized authentication and impersonation by using Aadhar biometrics. Are we throwing Aadhar user to the wolves?
In 2016, Standard Bank South Africa computers system was hacked to steal rand 300 million through 100 credit card uses in Japan to withdraw Yen 1.8 billion (rand 250 million) from ATMs in Tokyo within three hours.
At least four major banks have been infiltrated since 2016, including Ecuador’s Banco del Austro ($ 12 billion stolen); Vietnam’s TP Bank ($ 1 million tried to be hacked); a bank in The Phiplippines (cash stolen unclear); and Bangladesh’s central bank robbed of $ 101 million (of which $ 20 million siphoned to Sri Lanka was stated to be recovered).
The Bangladesh bank heist was conducted through its account at the US Fed Reserve.
The US authorities have linked many of these heists to North Korea. The international system, however, is sceptical about such claims.
The hacks have exposed a flaw in the integrity of the international banking system. It is done through what the banks say “malware’, in reality very sophisticated software that not only gets embedded in banks’ systems but is also stated to multiply. It spews out information to the hackers through a complex internet system.
They mimic bank procedures and direct banks’ computers to spew out money in a variety of ways to transfer money into hackers’ fraudulent bank accounts using e-payment systems. They even direct ATMs to dispense money at set times and locations, without a debit or credit card.
A Russian cyber security firm, Kaspersky Lab, investigating a malfunctioning ATM in Ukraine found that errant machine was not the problem. Bank’s internal computers used by employees for transfers and book keeping had been penetrated by malware of a criminal group of Russians, Chinese and Europeans through e-mails. Then they transferred millions of dollars from banks in Russia, Japan, the US and the Netherlands into dummy accounts set up in other countries.
Many credit card users in India reportedly complained of large transactions on their cards in many western countries, which they have never visited. The Indian police are groping with other criminals functioning within the country and targeting credit card users through spurious phone calls. The police, even in the national capital, Delhi, say they are clueless. They mostly do not record FIRs but just take a complaint. Cyber illiteracy is high.
A study by Bangladesh Institute of Bank Management (BIBM) of 25 of 56 commercial banks finds Bangladesh banks are facing 45 to 300 cyber attacks a day. About 60 percent of the attacks originate from other countries and 40 percent from local hackers. Most of the cyber attacks remain unreported to the regulator or law enforcement agencies.
The BIBM reports says that 27 percent is malware attacks, 21 percent phishing, 7 percent pharming and another 7 percent is botnets or zombie attacks. Of these 23 percent is targeted to ATM or point of sale (POS), 18 percent did identity theft, 9 percent for repeated attacks, 15 percent disurps network, 9 percent targets data integrity braches, 8 percent seeks insider access and 7 percent is done for account takeover from the banking systems.
The US Websense Security Lab 2015 Financial Services Drill-Down Report examining the present state of cyber threats, said that banking/financial sector – which includes the capital and equity markets – are becoming more prone to cyber attacks and data theft. It stated that the financial sector encounters security incidents 300 per cent more frequently than other industries. It finds data software like data stealing email worm geodo, rerdom, vawtrack, searchprotect and browsefox as the most used against financial sectors.
These steal data mostly without leaving traces.
The Indian attack on 3.02 crore known card holders, known as Hitachi hackers, is stated to be something of a very sophisticated nature and has reportedly been not seen in any other investigations. The attackers are using what is called spear phishing to get valid usernames and passwords and then use built-in capabilities of the operating systems like Windows to complete the hack.
The Indian system so far is largely targeting detection of malware, a kind of defence mechanism. It does not have aggressive software to kill such malware that “gently” gets embedded through any e-system, including the most innocuous e-mail.
Not many hackers internationally so far have been apprehended either. India despite being an IT giant remains at a nascent stage in this area. The Hitachi attack is stated to have been highly targeted with high deception tactics. Its impact has yet to be assessed.
The skill to check the malware before it starts tactical movement or “privilege escalation” has not yet been developed. It is said that the bad guys have better information sharing than the “robust” financial system. Experts are unanimous that if an attack has been successful in one environment, it can be reused in the same industry.
Those votaries of digitization need to be cautious. They must not throw entire globe into a crisis due to severe security lapse. The organized banking has done more harm to the global economy at least since 1930s than the citizens’ trusted cash system. The world needs to wait and build up parallel system to save the common man.