Digital Threats | Political economics

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Consumers at three private banks fell victim to an online debit card scam just before Eid al-Fitr. The victims filed a complaint with the Cybercrime Unit of the Federal Investigation Agency (FIA).

Hundreds of customers of one of Pakistan’s biggest banks have said they lost money through unapproved bank transfers, bill payments and online purchases. Bank staff informed irate customers that their services were having problems and that the bank was working hard to resolve the issues. Customers also said their cards were disabled. So far, the banks and authorities involved have been unable to determine the cause of the data breach. It could be a technical problem or the result of online fraud.

The most likely explanation is debit card fraud by bugging ATMs. When debit cards are entered into a machine, the information they contain is replicated. Card key pins are obtained using keyloggers. The cards are then used for internet transactions.

With the growing use of digital banking over the past couple of years, data breaches have become increasingly common in Pakistan, despite the fact that the banking regulator and relevant ministry have issued a strong cybersecurity strategy.

Over the past six months, data breaches have affected not only banks, but also many government organizations, including the Federal Board of Revenue (FBR) and the Department of Finance. Financial institutions should have a comprehensive strategy to protect their customers and systems from hacking attempts.

Foreign hackers used compromised data from debit cards to execute fraudulent foreign currency financial transactions to rob a leading bank in Pakistan.

The financial institution had to block foreign financial transactions using debit cards for almost all of its customers following the incident. All fraudulent transactions were denominated in dollars. Anyone who now wants to use a debit card for internet banking must first activate the service otherwise they will be denied installation due to the suspension of the service for security reasons. There have been numerous fraudulent transactions of small sums.

It is not yet known how much money was stolen from how many bank accounts by cybercriminals operating from abroad. Cybercriminals are notorious for using Google searches to plan and execute fraud.

In 2018, a similar attack affected almost all Pakistani banks. Huge sums of money were then stolen from people’s accounts by hackers.

In November 2018, a private bank reported that the data breach had cost it around $6 million in direct losses and the suspension of various operations, including internet banking. In February 2019, a private bank’s database of 69,189 bank cards was put up for sale on the dark web. The bank lost $3.5 million as a result of the data leak. According to media reports, the bank’s management was quick to react to the situation and asked its customers to change their PIN codes and other security measures to avoid losing money.

As conditions change, bank fraud evolves, producing new vulnerabilities and challenges for banks as well as opportunities for fraudsters. Staying on top of this rapidly evolving target is critical if banks are to develop systems that can detect and prevent such scams, especially given the impact of the pandemic on the banking industry. Nowadays, everything on the Internet can be hacked.

The cybersecurity incident exposed over 19,000 card details of 22 Pakistani banks. The discovery came in response to a report from Group-IB, a multinational cybersecurity group, which claimed that hackers had exposed a massive number of credit and debit cards of Pakistani individuals on dark web forums. Among these, krebsonsecurity.com reported that information on more than 8,000 accounts of about 10 Pakistani banks had been sold on the dark web.

K-Electric, the electricity company was the target of a netwalker ransomware attack in September 2020 that disrupted billing and online services. The attackers threatened to leak all KE customer information including names, addresses, CNICs, NTNs, credit cards and bank account numbers on the dark web unless K-Electric management pays a ransom of $7 million.

Hackers stole the personal information of 260,000 users of a Pakistani music streaming site in January 2021. In August 2021, hackers attacked Pakistan’s largest data center controlled by the Federal Board of Revenue (FBR) and succeeded in cracking Microsoft’s hyper-V software, shutting down all official websites operated by the fiscal apparatus.

After restoring the official FBR website and tax-related operations, the hackers sold the FBR data for $30,000 on a Russian forum. A cyberattack on National Bank of Pakistan servers was detected on October 29-30, 2021, affecting some of its online services.

A security breach at a ride-sharing company in April 2018 compromised customer data from Pakistan and other countries. The attack on ATMs in Peshawar in December 2020 was also widespread. The breach of various websites including those belonging to the High Court of Sindh in July 2021 and PTV Sports in August 2020 has also made waves.

The mobile phones of some senior Pakistani officials were hacked in 2019 for covert surveillance. The attack was carried out using malware known as Pegasus, allegedly developed by Israeli spyware company NSO Group. Spyware can acquire access to messages, emails, contacts and passwords by making a missed call to targeted WhatsApp numbers and turning on the phone’s camera and microphone. The malware was also able to determine a user’s GPS location.

The majority of bank frauds target bank customers. Covid-19 has contributed to the growth of internal bank fraud. The pandemic has created ideal conditions for several types of financial fraud to flourish. Millions of people have been forced to change their routines, especially the way they work, shop and communicate. This accelerated fraud in the following ways:

Many office workers, including bank workers, have transitioned to remote working, which required remote access to corporate networks, often with inadequate security measures in place.

In the work-from-home environment, certain internal controls and confidentiality requirements have become more difficult to enforce.

• As branches and businesses closed, a dramatic shift in banking transactions to digital channels forced banks to rely on digital and telephone channels to keep services running. This was especially true in underdeveloped countries, where banks rushed to embrace digital innovation while neglecting security issues in some circumstances.

For example, transaction limits on digital channels have been raised, implying that account takeover could now lead to greater thefts. The rise in door-to-door delivery of retail orders has resulted in new phishing scams using email and SMS warnings, as well as a general increase in communications through digital channels that can be tampered with and exploited for phishing purposes.

• During the shutdowns, there was a surge in retailer participation in financial markets, which presented opportunities for online investment.

The Internet is used in many aspects of a bank or financial institution’s business. Your bank’s sensitive data can be at risk if you don’t have strong cybersecurity procedures in place. There are about five serious dangers to a bank’s cybersecurity.

Malware-infected end-user devices, such as PCs and mobile phones, pose a threat to your bank’s cybersecurity every time they connect to your network. Sensitive data travels through this connection, and if the end user’s device is equipped with malware, that malware could attack your bank’s networks if not properly secured.

To better serve their customers, many banks and financial institutions use third-party services from external providers. If these third-party companies lack adequate cyber protection, your bank could be the one that takes the brunt of the damage. Before deploying third-party solutions, it is essential to determine how you can defend against the security vulnerabilities they pose.

Spoofing is a new cybersecurity problem. Here, hackers mimic a banking website URL with a website that looks and functions similarly. When a user submits their login details, hackers steal them and store them for later use. The latest spoofing techniques not only use a slightly different but similar URL; they can also target consumers who have already visited the correct URL.

As a bank or financial institution, they must identify solutions to prevent cybersecurity threats while offering simple and technologically sophisticated options to their consumers.

To combat the growing number of cyberattacks, public and private sector organizations must use all available resources, including specialists and technological tools, to upgrade their cybersecurity systems.


The writer is a cybersecurity researcher and analyst


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