United States: $90 Million Cyber Thefts From Banks Using Swift Network Raise Security Issues

In February 2016, attackers stole $81 million from the Bangladesh central bank's account at the New York Federal Reserve Bank by hacking into the Bangladesh bank's computer network and sending fraudulent messages through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment network. In January 2015, attackers netted $9 million in funds from an Ecuadorian bank through fraudulent SWIFT messages. Information about the attacks and documents from a lawsuit related to the theft from the Ecuadorian bank reveal the challenging data security issues banks face when they use the SWIFT network.

How SWIFT operates. SWIFT, founded in 1973,[1] is a cooperative owned by 3,000 financial institutions from around the world.[2] SWIFT's message platform is used by more than 11,000 banks[3] in 200 countries. [4] Those banks sent approximately 25 million SWIFT messages per day in April 2016.[5] To use the SWIFT network, a person or business that wants to transfer funds internationally, referred to as the "sender," asks an "originator bank" to send a SWIFT message to a bank in another country directing the "receiving bank" to pay funds to a "beneficiary bank" for the account of the person or entity to receive the funds, the "beneficiary." [6] Each bank using the SWIFT network is assigned an eight-character identification code and a SWIFT message can be sent only from a SWIFT terminal at the originator bank; the SWIFT terminal authenticates to the SWIFT network using smart-card technology.[7] Receiving banks verify that each payment message contains the originator bank's code and was sent from the originator bank's SWIFT terminal.[8]

How the attackers succeeded. The attackers against both the Bangladesh central bank and Ecuador Banco del Austro (BDA) penetrated the originator bank's computer network, gained access to the banks' SWIFT terminals and sent fraudulent payment-order messages through the SWIFT network.[9] In both cases, investigators have not determined how the attackers initially penetrated the originator banks' networks.[10] Similar to cyber attacks on other networks, the attackers were able to move laterally within the banks' networks with direction from the attackers' command-and-control servers, compromise administrators' credentials and use those credentials to execute their attacks. Unlike other attacks, however, the attackers of the banks were able to steal money rather than payment card data, intellectual property or other information that had to be converted to money. The attackers of the Bangladesh central bank and BDA used their access to the SWIFT terminals and the banks' SWIFT identification codes to direct funds to fake beneficiary accounts, which the attackers quickly drained.[11]

Although the attacks against the Bangladesh central bank and BDA were similar at a high level, they differed in sophistication. The attackers of the Bangladesh central bank used the compromised administrator credentials to install malware, "evtdiag.exe," that enabled the attackers to change the source code of SWIFT software, Alliance Access, which tracked the bank's SWIFT messages.[12] The malware enabled the attackers to delete records of fraudulent outgoing messages from the Alliance Access database, intercept incoming messages from the recipient bank confirming receipt of the fraudulent messages, manipulate account balances to prevent discovery of the fraudulent messages, and even manipulate paper printouts of the fraudulent messages.[13] Adrian Nash, the head of threat intelligence for BAE, one of the firms investigating the attack on the Bangladesh central bank, said he had never seen such an elaborate scheme from criminal hackers.[14] The result could have been much worse: the attackers attempted to fraudulently transfer $951 million from the Bangladesh central bank's account at the Federal Bank of New York, but all except $81 million of the payment orders were blocked.[15]

After attackers compromised BDA's computer network, they logged on to BDA's network after the bank closed, located previously cancelled or rejected SWIFT payment messages, altered the payment amounts and beneficiaries, and reissued the messages.[16] Because the altered messages included BDA's SWIFT code and had been originated on BDA's SWIFT terminal, the messages were authenticated by the receiving banks, which paid the fraudulently designated beneficiary banks. BDA auditors identified the fraudulent SWIFT payment orders nine days after the first one was sent.[17] Of $12 million in fraudulent transfers, BDA obtained approximately $2.7 million in refunded amounts from recipient banks. [18]

SWIFT's reaction to the attacks. SWIFT's CEO, Gottfried Leibbrandt, said in a speech that the attack on the Bangladesh central bank was a "watershed" moment that should cause the banking industry to "work even harder at our collective defensive efforts."[19] He also said "cyber risk is big: there will be more cyber attacks. And inevitably some will be successful."[20] Leonard Schrank, SWIFT's CEO from 1992 to 2007, called the attacks on the Bangladesh central bank and BDA a "huge wake-up call." [21] He urged originator banks to improve their security.[22] He also suggested that SWIFT consider requiring receiving banks to use anomaly detection to delay questionable message traffic until it could be confirmed and to insist that originating banks separate their SWIFT systems from their broader computer networks.[23]

On May 27, 2016, SWIFT announced five "strategic initiatives": requiring SWIFT participants to report security incidents, expanding two-factor support to authenticate SWIFT messages, enhancing security and audit baselines for participating banks, increasing support for anomaly detection and stop-payment controls, and supporting third-party consultants to assist with security implementation.[24] These planned measures are to be phased in over time, with more details to be provided by SWIFT in September 2016.


[1] Tom Bergin and Nathan Layne, "Special Report: Cyber thieves exploit banks' faith in SWIFT transfer network," Reuters (May 20, 2016) ("Bergin"), available at http://www.reuters.com/article/us-cyber-heist-swift-specialreport-idUSKCN0YB0DD (last checked July 4, 2016).

[2] Jim Finkle, "Bangladesh Bank hackers compromised SWIFT software, warning issued," Reuters (April 25, 2016) (Finkle, April 25), available at, http://www.reuters.com/article/us-usa-nyfed-bangladesh-malware-exclusiv-idUSKCN0XM0DR (last checked July 4, 2016).

[3] Id.

[4] Katy Burne, Robin Sidel, Syed Zain Al-Mahmood, "Swift Banking Network Struggles With Wave of Cyberattacks," Wall Street Journal (May 20, 2016) ("Burne"), available at http://www.wsj.com/articles/swift-banking-network-struggles-with-wave-of-cyberattacks-1463786328 (last checked July 4, 2016) (subscription required).

[5] Id.

[6] Robert W. Ludwig, Jr., Salvatore Scanio and Joseph S. Szary, "Malware and Fraudulent Electronic Funds Transfers: Who Bears the Loss?," Fidelity Law Journal, Vol. XVI, 101, 107 (October 2010) ("Ludwig"), available at http://www.ludwigrobinson.com/pdf/Ludwig – Scanio Article for Journal.pdf (last checked July 4, 2016).

[7] Burne.

[8] Id.

[9] Charles Riley, "Hackers could bring down the banks, warns network bank," CNNmoney, May 24, 2016 ("Riley"), available at http://money.cnn.com/2016/05/24/news/swift-bank-hack-ceo/ (last checked July 4, 2016).

[10] Arun Devnath and Michael Riley, "Bangladesh Bank Heist Probe Said to Find Three Hacker Groups," Bloomberg Technology (May 10, 2016), available at http://www.bloomberg.com/news/articles/2016-05-10/bangladesh-bank-heist-probe-said-to-find-three-groups-of-hackers (last checked July 4, 2016). In our experience counseling companies whose networks have been compromised by attackers, an inability to determine the initial "vector of compromise" is common. Phishing emails with malware attachments and poisoned websites that cause "drive-by" downloads to employees' computers can initiate a compromise. Logs are often not retained, or are not kept for a sufficient period of time, to identify the initial penetration.

[11] See Banco del Austro v. Wells Fargo Bank, No. 1:16-cv-00628 (LAK), S.D.N.Y. ("BDA case"), Dkt. No. 1-4, Statement of Claim in Hong Kong Administrative Region (May 12, 2015) (listing accounts in Hong Kong to which the attackers directed stolen BDA funds).

[12] Finkle, April 25.

[13] Id.

[14] Id.

[15] Id.

[16] Bergin; see also BDA case, Dkt. No. 1, Ex. A, Complaint, ¶¶ 23, 31, (Ex. A to Notice of Removal).

[17] Id., Complaint, ¶¶ 23, 31.

[18] Another SWIFT-based attack in December 2015 on a commercial bank in Vietnam was unsuccessful. Vietnam's central bank reported that the originating bank detected the fraudulent requests and stopped the movement of funds. Devlin Barrett and Katy Burne, "Now It's Three: Ecuador Bank Hacked via Swift," The Wall Street Journal (May 19, 2016), available at http://www.wsj.com/articles/lawsuit-claims-another-global-banking-hack-1463695820 (last checked July 4, 2016) (subscription required).

[19] Riley.

[20] Id.

[21] Burne.

[22] Id.

[23] Id.

[24] "SWIFT launches customer security programme to reinforce the security of the global banking system," May 27, 2016), available at https://www.swift.com/customer-security-programme (last checked July 4, 2016).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions