Last October, an IBM study report warned India that despite talents and tools, the country is still unprepared to protect itself from a big cyberattack.
Within four months of this IBM warning report, cybercriminals have managed to hack and transferred US$2 million from India’s City Union Bank through three unauthorized remittances to lenders based abroad via the SWIFT financial platform, the institution revealed over the weekend, said a Reuters report.
Cyber criminals hacked into the system and did three transactions. The three fraudulent remittances were sent via correspondent banks, to accounts in Dubai, Turkey, and China.
“This is basically a cyberattack by international cybercriminals,” the bank’s CEO N. Kamakodi told Reuters.
“There was no evidence internal staff was involved, but that it was clear account holders are part of the fraud”, he added.
City Union Bank, a small private lender based in south India, blocked one of the remittances for US$500,000 that was being sent through a Standard Chartered Bank account in New York to a Dubai-based lender and another transfer of EUR300,000 (US$370,110) routed through Frankfurt to Turkey.
The tactics used by hackers are very similar to those employed in the unsolved cyber heist of $81 million from Bangladesh’s central bank in 2016. Notably, more than one-third companies suffered losses due to cyber attacks in year 2016, globally.
The bank said it was working with the Ministry of External Affairs and officials in Turkey and China to repatriate the funds.
It’s possible that blockchain technology could have prevented the City Union attack.
Other Indian financial institutions, such as Axis Bank, Yes Bank and ICICI have already adopted blockchain technology for payment and remittance related transactions.
It was the ICICI Bank that had first announced about using the blockchain solutions for international trade finance and remittances in October 2016. This was followed by Yes Bank announcing the usage of the technology for vendor financing and then Axis Bank in January 2017.
Last year, India’s billion dollar food delivery startup Zomato was hacked and passwords of about 17 million users were stole, however later the company managed to brought every thing in right place. Prior to that, in 2015 cab-hailing startup Ola website got hacked however the company denied any breach.