The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is developing a payment-screening service that would allow small member banks to automate the flagging of suspicious payments.
The new service is part of a series of measures from SWIFT to defend against cyberattacks that aim to fraudulently use banks’ connections to the messaging system.
The system was used by hackers to steal US$81 million from Bangladesh last year,
It would place a “red flag” on payment messages that appear risky and spot anomalies, provide real-time alerts and allow customers to put a hold on unusual messages, the cooperative said in an e-mailed statement on Tuesday.
SWIFT aims to begin offering the service by early next year.
Its price would depend partly on how many banks adopt it, the cooperative said.
After initially responding to the Bangladesh hack by saying that its member banks were responsible for their own security, SWIFT has rolled out a series of security programs and procedures over the last year, including a requirement that members share more information about security incidents.
Other measures have required member banks to install new equipment or software so that all of them would have improved defenses.
Big banks have largely complied and most already had systems in place to spot suspicious transaction requests.
However, getting some smaller member banks to install these systems has been a challenge for SWIFT, which said it would begin to report security shortcomings to regulators.
The difference this time is that the anti-fraud service will be hosted by SWIFT. Banks would be able to use it without having to install any new hardware or software.
The payment screening service is initially meant for smaller financial institutions and central banks, SWIFT said.
In February last year, hackers exploited the SWIFT connection of Bangladesh’s central bank to request that funds be transferred from its account at the Federal Reserve Bank of New York. Similar cyberattacks have hit banks in other countries, including Ecuador and Vietnam.
SWIFT has been under increasing pressure to fortify its systems. SWIFT has relied on the trust within its network to cement its effective dominance of the international payments system over the past four decades.
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