The Modern Day Bank Robberies
In the blink of an eye, the bank had lost upward of $1 million. Security footage revealed nothing but an ordinary day at the bank without any suspicious individuals or odd behavior. There were no complex tunnel systems or elaborate decoys used for the heist. In fact, the robber had never set foot in the bank nor seen it in a passing car. The robber did all of this while sitting at a computer terminal, somewhere far off in Eastern Europe, outside the jurisdiction of the local community police force. The story above is not an anecdotal account but rather a story out of Edina, Minnesota from earlier this year. Is your bank properly safeguarded against cyber-attacks?
Pennsylvania Association of Community Bankers (PACB) and Alliance Bank welcomed US Representative Pat Meehan, Chairman of the House Subcommittee on Cyber-security, Infrastructure Protection, and Security Technologies, in February to talk about the threats community banks face in an ever advancing technological world. Several bank CEO’s, systems administrators, and IT specialists were in attendance to offer input from the industry.
Cyber Security: No Longer Just a Big Bank Problem
While the days of Bonnie and Clyde running into a bank with guns pointed towards the sky with demands to fill their bags with money are not entirely history, more and more cases of cyber-attacks on banks are surfacing in lieu of the traditional bank robbery. “Dillinger went to the bank in the old days. Now we’re dealing with transactions that are cyber communications,” said Representative Pat Meehan on the new ways banks must protect themselves.
Bank robberies, in the traditional sense, are at record lows with just over 5 out of 100 banks reporting robberies. A recent Wall Street Journal article highlighted the fact that the once lucrative crime now results in roughly $7,604 per robbery. With the decline in payoff, coupled with more stringent bank robbery laws resulting in tougher penalties, traditional bank robberies are going the way of the radio star. This has brought about an uptick in cyber-attacks with would-be bank robbers looking to more sophisticated and high-tech attacks.
The topic of cyber-attacks on banks made major headlines in late 2012 when several big banks were hit by distributed denial of service (DDoS) attacks, essentially shutting down the banks’ websites and preventing consumers from accessing their accounts online. According to one digital security company, these types of attacks rose an astounding 170 percent last year. Speculation on who was behind the attacks ranged from internet activists seeking to temporarily disrupt commerce to more nefarious activities sponsored by nation states such as Iran, China, and Russia.
This type of attack, DDoS, is orchestrated using a host, or botnet, which involves multiple computers flooding the financial institution’s server with traffic in an effort to deny legitimate users access to the site. The concern arises from using the DDoS attack to deflect attention from what the hacker intends to accomplish.
Read the full article in the March issue of Transactions. Not a subscriber? Visit the Transactions page on this website or call PACB at 717-231-7447 to start receiving the magazine.