Security calamity shakes US banks
Published: 25 Sep 2000 09:15 BST
A UK-based computer expert has reported breaching security at some of the biggest Internet banks in America, gaining control of thousands of personal bank accounts.
In the most serious Internet security incident to hit financial companies yet, Ralph Dressel, a software engineer with the Royal Skandia Investment bank, told the Observer that he was able to transfer funds and alter PIN numbers belonging to whole databases of unknown users.
Dressel says he gained access to these accounts after stumbling across an access log at the Web site belonging to Fiserv, the software firm which provides the banking software for many US banks. Dressel contacted the FBI along with police in Britain and informed the national press in Britain in order to publicise the security incident. Lots of banks worldwide use Fiserv software, including the UK's Abbey National.
Prudential's online bank Egg also uses Friserv banking software although this is not accessible via the public Internet and so was not exposed by this incident. According to Egg's chief technical officer Pete Marsden this dire exposure of bank details demonstrates the importance of auditing not just internal security. "A third party's security has to be as strong as your own. Any online organisation has to make sure of this," he says.
Senior security analyst with Information Risk Management Richard Stagg agrees that this should be standard security procedure. "Quite often you will find companies that want to be secure are let down by outsourcers," he says. "You're only as secure as your weakest link."
Fiserv estimates that its software is used to control 200 million accounts online and $15bn (£9.3bn) of customers' money. This enormous security breach overshadows most other recent security incidents and will undoubtedly confirm fears over Internet banking security sparked by more minor mishaps. Last month, Prudential's Internet bank Egg was last month the target of fraud and Barclays bank accidentally allowed customers to gain access to other users' accounts.
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