Swift to Start Daily Reports to Help Banks Spot Payments Fraud

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Swift is taking another step to protect the payment system following a multimillion-dollar cybertheft early in the year.

The global financial messaging system on Tuesday unveiled plans to offer banks so-called daily validation reports starting in December. The reports will help them "quickly detect fraud — whether perpetrated by external attackers or by malicious insiders," Stephen Gilderdale head of Swift's customer security program, said in a news release.

Each report would contain a daily rundown of banks' message flows so they can verify them independently, detect unusual patterns and potentially cancel transfers they find to be fraudulent. The reports would be sent on an independent channel in case banks' own systems are compromised.

"A key step in the modus operandi in recent wire fraud cases at customer firms involves the attackers concealing their fraudulent messaging activity on customers' local systems," Gilderdale said. "Smaller institutions, in particular, are currently dependent on the accuracy of the data on their own systems, but in the event of a security breach, their locally stored payment and reconciliation data may be altered or unavailable."

Swift, the Society for Worldwide Interbank Financial Telecommunication, connects 11,000 financial services firms with its messaging platform for transfers. The reports are being launched as part of the Transaction Pattern Detection stream within Swift's information-sharing and threat-intelligence program for member banks, which launched in June as a key part of its newly created customer-security-intelligence team.

The new reports are another response to a host of high-profile cyberattacks on Swift members, beginning with a February incident in which hackers lifted $81 million out of Bangladesh Bank's account at the Federal Reserve Bank of New York; the incident was discovered days after the hackers had already deleted records of fraudulent Swift messages sent from the Bangladesh account at the New York Fed.

Swift had emphasized that it was not its core messaging services and software that had been compromised and pressed its bank customers to ensure their systems were secure. More recently, Swift warned banks to upgrade their software and security protocols for the global financial messaging system, following more hacks that triggered more bank losses.

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