You may also be interested in:


Swiftly Getting Worse: SWIFT Reveals Second Malware Attack

  • By Andrew Deichler
  • Published: 5/14/2016

Shortly after BAE Systems reported that SWIFT software may have been compromised in the now-infamous Bangladesh Bank hack, the financial cooperative informed its bank customers that it was aware of a number of incidents in which criminals sent fraudulent SWIFT messages across its network.

Late Thursday, SWIFT acknowledged a new incident.

SWIFT did not reveal the name of the bank or how much money was stolen, if any, in the Reuters story. It did explain, however, that the attackers possessed intimate knowledge of the bank's operational controls, which it likely have gained through insiders or cyberattacks.

Early Friday morning, SWIFT sent a detailed notice to all its customers (Ed. Note: see below), assuring them that the SWIFT network itself was not breached but noting that the latest hack is likely part of a larger campaign targeting banks. The cooperative said that in both this incident and the Bangladesh heist, hackers exploited vulnerabilities in the banks funds' transfer initiation environments, prior to messages being sent across the SWIFT network. "The attackers have been able to bypass whatever primary risk controls the victims have in place, thereby being able to initiate the irrevocable funds transfer process," SWIFT said.

Hackers target PDF reader

SWIFT also provided some additional details on the new hack. The attackers reportedly used a Trojan that targeted a PDF reader used by the bank to check its statement messages. Once it is installed on a local system, it can hide evidence of fraudulent message transfers. When the user opens a PDF file containing reports of customer-specific SWIFT confirmation messages, the Trojan manipulates reports to remove traces of fraudulent transactions.

SWIFT has found no evidence of the Trojan creating or injecting new messages or altering the content of legitimate outgoing messages. The cooperative encourages customers that use PDF reader applications for their confirmation messages to take particular care.

The news comes just a few short days after Bangladeshi authorities and unnamed bank officials pointed the finger at SWIFT for the first heist. SWIFT fired back, calling the allegations "false, inaccurate and misleading". SWIFT later released a joint statement with Bangladesh Bank and the Federal Reserve Bank of New York, stating that they were working together to recover the proceeds, bring the perpetrators to justice and shore up the global financial system against cyberattacks.

Although all evidence at this point indicates that these criminals are targeting banks, corporate treasurers are clearly concerned. The previous two articles AFP ran on this subject were our most read articles in the past two months. And treasurers have good reason to be worried—many of them use the SWIFT network regularly to move high value payments. Treasurers who use a similar PDF reader to check statement messages should use precaution.

"The new developments just reinforces the need to check internal systems and especially monitor accounts since credentials were exposed," said Magnus Carlsson, AFP's manager of treasury and payments.

SWIFT's message to users

SWIFT issued a statement to users in the wake of the latest hack. It reads, in part:

Dear SWIFT User,

As we notified you in our earlier communications, we are aware of a small number of recent cases of fraud at customer firms. First and foremost we would like to reassure you again that the SWIFT network, core messaging services and software have not been compromised. We have however now learnt more about a second instance in which malware was used – again directed at banks' secondary controls, but  which in this instance targets a PDF Reader used by the customer to check its statement messages.

Forensic experts believe this new discovery evidences that the malware used in the earlier reported customer incident was not a single occurrence, but part of a wider and highly adaptive campaign targeting banks.

In both instances, the attackers have exploited vulnerabilities in banks funds' transfer initiation environments, prior to messages being sent over SWIFT. The attackers have been able to bypass whatever primary risk controls the victims have in place, thereby being able to initiate the irrevocable funds transfer process. In a second step, they have found ways to tamper with the statements and confirmations that banks would sometimes use as secondary controls, thereby delaying the victims' ability to recognize the fraud.

The attackers clearly exhibit a deep and sophisticated knowledge of specific operational controls within the targeted banks – knowledge that may have been gained from malicious insiders or cyber attacks, or a combination of both.

Preventative Controls  

As a matter of urgency we remind all customers again to urgently review controls in their payments environments, to all their messaging, payments and ebanking channels. This includes everything from employee checks to password protection to cyber defenses. We recommend that customers consider third party assurance reviews and, where necessary, ask your correspondent banks and service bureaus to work with you on enhanced arrangements.

We also urge all customers to be forthcoming when these issues occur so that the fraudsters can be tracked by the authorities, and SWIFT can inform the rest of community about any findings that may have a bearing on wider security issues.

In the meantime we would like to reassure you that the SWIFT network, SWIFT messaging systems and software have not been compromised. The security and integrity of our messaging services are not in question as a result of the incidents. We will continue with our security awareness campaign, bilaterally with users and through industry forums and other appropriate channels. We will also continue working with our overseers, with law enforcement agencies, and third party experts, and we will continue to inform you of any further information we believe that can help you detect or avert such attacks.

Latest Findings  

In the earlier case we reported to you, and this particular case we can confirm that: malicious insiders or external attackers have managed to submit SWIFT messages from financial institutions' back-offices, PCs or workstations connected to their local interface to the SWIFT network. The modus operandi of the attackers is similar in both cases:

1. Attackers compromise the bank's environment

2. Attackers obtain valid operator credentials that have the authority to create, approve and submit SWIFT messages from customers' back-offices or from their local interfaces to the SWIFT network.

3. Attackers submit fraudulent messages by impersonating the operators from whom they stole the credentials.

4. Attackers hide evidence by removing some of the traces of the fraudulent messages.

In this new case we have now learnt that a piece of malware was used to target the PDF reader application used by the customer to read user generated PDF reports of payment confirmations. The main purpose of the malware is again to manipulate an affected customer's local records of SWIFT messages – i.e. step 4 in the above modus operandi.

Once installed on an infected local machine, the Trojan PDF reader gains an icon and file description that matches legitimate software. When opening PDF files containing local reports of customer specific SWIFT confirmation messages, the Trojan will manipulate the PDF reports to remove traces of the fraudulent instructions.

There is no evidence that the malware creates or injects new messages or alters the content of legitimate outgoing messages. This malware only targets the PDF reader in affected institutions' local environments and has no impact on SWIFT's network, interface software or core messaging services.

Customers that use PDF reader applications to check their confirmation messages should take particular care.

Your Security  

As we stated earlier, this is clearly a highly adaptive campaign targeting banks' payment endpoints. Above all therefore your first priority should be to ensure that you have all preventative and detective measures in place to secure your environment. This latest evidence adds further urgency to this work. Such measures are the best defence against such malware being installed on your local systems, and against fraudulent actions on your local infrastructure to connect to the SWIFT network.

Please remember that as a SWIFT user you are responsible for the security of your own systems interfacing with the SWIFT network and your related environment – starting with basic password protection practices – in much the same way as you are responsible for your other security considerations. Whilst we issue, and have recently reminded you about, security best practice recommendations, these are just a baseline and general advice.

We will continue to update you on these issues as more information becomes available to us. We would ask you to ensure that these communications reach your security officers.

Navigate Revenue Uncertainty

Don’t let revenue uncertainty affect your business. AFP’s Top-Line Modeling workshop will teach you how to navigate seasonality and how to create an effective revenue model.

Register for this valuable pre-conference workshop today.

Copyright © 2019 Association for Financial Professionals, Inc.
All rights reserved.