Devastating Cyberattack Shakes Up Pakistan’s Financial Sector

Pakistan has a pretty solid financial services sector. According to the World Bank in 2005, Pakistan’s banking has undergone a series of significant reforms that has shifted their industry from the public sector to the private sector.

The reforms benefitted from a climate of broader macroeconomic stabilization, and featured major bank restructuring, stronger regulations, and improvements in transparency. Better transparency definitely should work well with more regulations.

More than thirteen years have passed since that report. Inevitably there have been ups and downs in their economy like in most other large countries, and they weren’t as affected by the 2008 recession as the United States, Canada, and western Europe were. Imperfect but stable relations with India and their connections to the rest of the Asian market probably helped.

But just like every other major international banking sector, their financial data has become increasingly digitized. The digitalization is great for convenience and efficiency, but it has made their banking industry increasingly vulnerable to cyber attack.

According to PakCERT’s Qazi Misbah, 22 banks in the country were subject to a catastrophic cyber attack on October 27thof this year. 19,864 accounts with client banking data were hit, with some victims saying that funds were stolen. Amongst the many targets was the former Chief Scientist of Khan Research Laboratories, who says that Rs3 million disappeared from his bank account.

Bank auditor Chief Hermond Javed Bhatti has a better view of the big picture, noting that “the general public is slowly losing faith in the banking sector, and with data breaches like these, coupled with the introduction of federal taxes on banking transactions and the latest money laundering cases, more and more customers are turning away from the formal banking sector to the informal sector in a bid to distance themselves from (Read more...)

*** This is a Security Bloggers Network syndicated blog from Cylance Blog authored by Kim Crawley. Read the original post at: