SWIFT: The $81million hack problem and Everex’s solution
Cybersecurity is regarded as one of the most important functions an economy must have in these days of technological advancements. With funds worth hundreds of billions of dollars transferred every day throughout the financial system, it is extremely necessary to secure the environment which facilitates financial transactions.
SWIFT — the Society for Worldwide Interbank Financial Telecommunication — is the dominant market player in the industry to allow financial institutions across the globe to exchange information related to financial transactions in secure conditions. According to the US Treasury, SWIFT handles around $5 trillion dollars per day, which is equivalent to $1.25 quadrillion dollars per year, making up a large fraction of the globe’s total transactions.
The security of the SWIFT system has been tested many times across the world where there have been multiple successful attempts at gaining access into the system.
Two months ago, The Russian central bank publicly confirmed that hackers stole approximately $6million USD-equivalent of roubles from a Russian Bank last year, using the SWIFT system to transfer money to their account. None of the transfers were recovered. In December, unknown hackers tried to steal another 55 million of roubles from Russian State Bank Globex, again using the SWIFT system, and in February 2016, cyber criminals successfully stole $81 million from Bangladesh Central Bank account (which was actually intended to be $951 million). SWIFT declined to disclose the number of attacks, but details on some cases have been made public including $60 million from a Taiwanese Bank and $4.5 million from a Nepal Bank.
Security with the blockchain technology
Earlier this month, the Monetary Authority of Singapore issued an advisory note to remind financial institutions to remain vigilant, following further recent reports of cyber incidents overseas where attackers attempted fraudulent fund transfers using the SWIFT system.
All these cyber-attacks reveal a delicate payment ecosystem which makes movement of financial assets difficult to track in case something goes wrong. This is where the blockchain technology can be harnessed as it promises a secure and tamper-proof digital records storage making it possible to trace the entire phase of money transfer and to perhaps recover any stolen money.
Blockchain is a chain of digital blocks containing records of transactions which are secured through cryptography. Every single block is interconnected within the network (since participants of the network have their personal keys assigned to specific transactions they make which act as private digital signature and if a record is transformed, the signature will become invalid). The cyber-hacker would need to change the block that contains the record and all those inter-connected to this latter in order to avoid detection, which makes it difficult to tamper with a single record.
From a cybersecurity perspective, blockchain is the solution which fits perfectly and these are some of the reasons for that claim:
Elimination of a middle-man
With blockchain technology, there’s no middleman that could potentially act as a source of leaks or compromised data. This removes the vulnerabilities of any financial institution as there are no potential weak points in the blockchain. Digital certificates keep every transactional participant completely anonymous and a private-public key mechanism like the one Everex offers coupled with powerful cryptography to keep records secure.
Traceability
Every transaction added to a blockchain is time-stamped and signed digitally. This means that companies can trace back to a particular time period for every transaction and locate the corresponding party on the blockchain through their public address.
DDoS is virtually impossible
A DDoS (Distributed Denial of Service) attack is a process of overwhelming the servers with large amounts of fake traffic rendering them useless to carry on malicious attacks on the servers. Blockchain helps thwart DDoS by distributing data throughout a decentralized network. Owing to their distributed nature, blockchains provide no entrance or a central point of failure and, thereby, provide more security when compared with various present databases driven transactional structures.
The Everex solution
For Everex’s potential customers — central banks, banks and other financial institutions — these threats coupled with a safer alternative provide a reason for such institutions to further explore the blockchain technology.
The Everex payments solution offers high level of security with settlement time of less than 30 seconds which ensures that the transactions on the blockchain is fast, secure and extremely cost effective, eradicating the pitfalls of the existing financial system burdened with security issues and lack of speed.
By design, a Distributed Ledger system allows for an easy detection of tampering the financial data and since the one of the core concept of the blockchain is about immutability, it is virtually impossible to tamper the data, and reconciliation is immediate. Hence, any attempts of fraudulent activities can be easily detected and rectified in a matter of seconds as in the financial world of SWIFT; time is of the essence in protecting the assets of the customers.
While we can’t prevent financial institutions of cyber-attacks, we can make financial transactions extremely secure, tamper-proof and fully traceable.
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