Banks, Wall St. Feel Pinch from Computer Intrusion

An anonymous reader writes "Financial institutions and companies in the securities/futures business are reporting sizable increases in the amount of losses and suspicious activity attributed to computer intrusions and identity theft, says the Washington Post's Security Fix blog. The Post obtained a confidential report compiled by the FDIC which analyzed Suspicious Activity Reports from the 2nd Quarter of 2007. SARs are filed when banks experience fraud or fishy transactions that exceed $5,000. The bank insurance agency found that losses from computer intrusions averaged $29,630 each — almost triple the estimated loss per SAR during the same time period in 2006 ($10,536). According to the Post, 'The report indicates that the 80 percent of the computer intrusions were classified as "unknown unauthorized access — online banking," and that "unknown unauthorized access to online banking has risen from 10 to 63 percent in the past year."' Another set of figures analyzed by The Post looks at similar increases affecting the securities and futures industry."

Comments

Well, this is good ...

[ScrewMaster]

maybe this will force these idiots to upgrade their infrastructures and take network security seriously. That would probably help all of us in the long run.

Re:Well, this is good ...

[Crafack]

I'm in IT Operations for a bank in EU.

We spend a sizeable amount of both time and money securing systems against outside access.

The problem as reported in TFA is in the end-user zone. Malware, trojans etc. are used to steal identities og businesses or persons.

True, most of these problems could be mitigated (for now) if the banks switched to some kind of one-time-pad system, but apparently for now the cost of the system are greater than losses due to attacks. /Crafack

Re:Well, this is good ...

[CastrTroy]

I call BS. There's a lot they could do to increase security for banking. How about actual 2-factor authentication. Something you know, and, something you know is not 2 factor authentication. Try something you know (your password), and something you have (those little RSA tokens). If they implemented those RSA tokens that spit out a new number every 60 seconds, they could stop almost all the phishing scams. Yet they refuse to do anything to actually even offer the more secure option. I'd pay for the RSA token out of my own pocket if it meant my money would be more secure.

beancounters and shortcuts

[galaad2]

That's what you get when you put beancounters in charge of computer security, a WHOLE LOT of shortcuts in the name of cost savings which lead ultimately to insecurity.

Re:beancounters and shortcuts

[zappepcs]

It's not just bean counters. Many businesses went into the computer services side of their business with either no knowledge of the risk, went into it before the risks were known, or simply made bad decisions. Now, they have to have the computer side of their business to compete and they are finding out what dangers lie inside pandora's box, even as they try to put the lid back on.

Intrusion detection systems are how old? Who really is the enemy as far as the computer system can tell? If you don't know, or are not sure of the answer, you have something in common with the people that have to make decisions with the security of your financial information. I'm not saying that it's a total lost cause, but think about it, have you heard of CSO CIO or CISO? These are the guys that are supposed to make such decisions. Does your bank have any of those positions? Oh wait, is it really the bank that is fully to blame? Did your login get compromised by some software on the 'build-a-better-model-airplane' website?

Better yet, did the bank's EDI software get compromised because one of their partners has an IT guy that watches porn at work during the grueling month-end process?

The truth is that a secure system cannot trust anyone or anything. Getting to your money in a secure system will not be easy, and will be a deterrent to using computerized banking. That is just how it is. Ever since there were banks, people have been trying to rob them. Security issues should not be news. What is news is that the banks and financial institutions are reporting that they are having trouble with security in a time when just about the entire industry has been hurt by the sub-prime issue? I smell a kind of rat here.

The problem is the user, not the security

[ironwill96]

The reason that these are going up is because of stupid users who see an e-mail from their bank (supposedly) that says "Alert, your account has been disabled until you login to this site and enter all of the information that we, as your bank would already know!". I think if we can focus on user education about phishing, and how banks will NEVER ask you for your username and password and account information via an e-mail, the number of fraudulent transactions would go down significantly. Since the main type listed was related to unauthorized online activity, it is because users are being stupid and giving out their username and password to phishing sites.

Now, you may say, "Just add more questions that only the user will know to their online banking logins!". The issue is, the phishers will just pull those same security questions from the banking site. I've even seen ones where they will have you do the initial login then they will login to your banking site and pass the actual security questions to you to answer, allowing them to completely bypass any security measures that your bank has setup. One thing that Chase does that might help a little bit is if you login to your online banking site from somewhere not already verified (different IP address) they will make you send an activation code to your Cell Phone or your registered account e-mail address before they will let you logon and do anything. This might help a little bit, but i'm sure the scammers will find a way around it. Also, those type of security measures are only implemented by large companies, leaving the smaller banks (and their customers) out in the cold when it comes to security.

So basically my point is, we shouldn't focus so much on network security measures as we should on user education. Network security is great, but when your users can be tricked into giving away their most personal information no amount of network security is going to protect them from themselves.

Only a USA problem?

[25albert]

Isn't this problem limited to the USA because their banks use only user/password for authentication?

I know the procedures for 5 or 6 banks in 3 different European countries, and all of them require a lot more to authenticate me.

The 3 procedures are:

* Bank 1 (the simplest, and first system I have seen, some 10 years ago).
- authenticate with user id (unrelated to name or account number) and password
- be prompted to enter a one-time number from a list which I received by postal (registered) mail (it asks for the number at row x, column y)

All other banks have long moved to something like the 2 others:

* Bank 2.
- put a special card received from the bank into a special calculator also received from the bank and enter password
- enter user id (unrelated to name or account number) on bank web site
- receive a one-time 6 digit number and type it into the special calculator
- the calculator gives an 8 or 10 alphanumeric one-time password to enter into the web form

* Bank 3.
- I can't remember the details, but as with bank 2, there is a special device and procedure to follow involving password, user id, device id and one-time numbers exchanged between the device and the bank's site.

- On top of that, the bank sends me an email every time I connect, with the date, time, the IP address from which I connected, and the money operations performed if any.

I have one of those RSA tokens

[xkr]

I paid $5.00 to paypal, including shipping. The little device fits on a keychain and generates a new six-digit code every 30 seconds. I simply add the six digits displayed to the end of my password when logging in. What is great, from the view of the web owners, is that there is no change to the visible user interface. It still looks like two fields: user-name and password.

This is genuine "two mode" authentication. Sure, if someone stole my computer AND my keychain the security is compromised. Or, if someone puts a gun to my head. But still, compared to current web login security, this system is a vast improvement.

All a bank has to do is say, "Here, this gizmo is free. And by the way, you have to use it if you want to do online banking." Managing these devices isn't any harder than managing ATM cards. Which people lose every day, and its not that big a deal.