Tuesday, 22. July 2003

Hackers break into ATMs security system

Hackers break into ATMs security system

By Azhar Mahmood

KARACHI: Hackers have broken into some banks' ATM security system compelling them to modify systems to combat the new electronic attackers, sources in banking industry said on Monday.

The affected banks have so far failed to trace them and many among them have preferred to keep silence on the issue in order to avoid backlash from customers, sources said.

The attacked banks have not yet started any joint efforts to curb the rising problem of e-raiding under the supervision of central bank.

Sources said a top private bank, which has serious stakes in the ATMs has cautioned its ATM card holders by sending them a notice captioned "Compulsory Change of Pin Code for ATM Cards".

The notice says, "The holders of newly issued ATM cards will be required to first of all change their personnel identification number, generally called as PIN with some different 4 digits of their own choice, which they will keep confidential.

"After one-month, from the date of last PIN changed, ATMs will automatically illustrate an option to change the previous PIN. The facility for changing PIN at any time will, however, remain available to the card holders."

In Pakistan, the ATM card holders manifest a unique tendency to finance ATM accounts by channalising funds from foreign currency accounts. In July 2002 the total FCAs of $3,839.5 billion went down to $2,589.5 billion by the end of June 2003, said the latest official statistics of the SBP.

Sources said according to the first ever census on electronic banking conducted by SBP, the recent massive drop in ATM business of Rs13.948 billion up to March, 2003 was a direct result of $1.250 billion decline in overall foreign currency accounts (FCAs) of the country.

Sources said the funds transfer from FCAs to ATM accounts has however declined for last one year but the overall ATMs business is still facing serious problems.

Sources said the recently established Payment System Department (PSD) in the SBP has started monitoring electronic banking and a draft of new prudential regulations on electronic banking has been issued to solicit views of the bankers and stakeholders.

The PSD is busy evolving a new security system for smooth and safe transaction of electronic baking keeping in view the requirements and standards of the committee on payment systems and technical committee of the international organisation of securities commissions, sources said.

Sources said the central bank is at the same time busy in setting up real-time growth settlement system (RTGS) for safe banking transactions but it will take almost a year to start. The system will make the SBP the first central bank of South Asia to have this state-of-the-art system.

Sources in PSD said, "Payment system stability is a core central banking function. Efficient and well functioning payment system reduces systematic and operational risks, lowers transaction costs, aids in efficient use of financial resources, helps in financial market to become more liquid and promotes stability in the financial system."

Jang Group Jul 21 2003 6:33PM ET [moreover Computersecurity]
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