Hacking syndicates threaten banking

Wednesday, 6 November 2002, 12:03 PM EST

The number of organized hacking syndicates targeting financial institutions around the world is growing at a disturbingly fast rate. And so is the number of banks willing to pay these high-tech extortionists hush money to protect their reputations, according to a security expert at The World Bank.

Cases in which banks, brokerage firms and other financial institutions have quietly paid hacking syndicates extortion money are "extremely widespread," said Tom Kellermann, senior data risk management specialist at The World Bank in Washington. Kellermann, who co-authored a study on the electronic security risks facing the global financial community, presented the findings during an Oct. 29 online seminar sponsored by Cable & Wireless Internet Services Inc. in Vienna, Va.

The 127-page study details the growing security challenges facing the financial sector as a result of the industry's unprecedented dependence on the public telecommunications system, rapid adoption of wireless systems and outsourcing of operations to third parties.

And the growing dependency on Internet technologies that are linked to sensitive back-end systems, such as customer databases and real-time stock data, has made online extortion a major "safety and soundness issue" for the financial markets, Kellermann said.

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