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Cyber security


by daniel archibald

 

In May of 2005, a landscaping business signed the lease on a new building in downtown Fortaleza, the 5th biggest city in Brazil. For 3 months, neighbouring businesses witnessed the landscaping business and their small workforce, ship truckloads of dirt from the building every day, until one morning when it suddenly stopped its operations. 

The landscaping business was, in fact, a cover for a plan to steal over $70 million from Banco Central; situated two blocks away. The bank heist was achieved by tunnelling 78m to directly under the bank's vault, and breaking through when the bank was closed over the weekend. As of 2021, 54 suspects had been arrested and about $10 million recovered. The supposed mastermind was found dead, apparently a victim of a kidnapping and extortion, presumably carried out by investigating police. 

In 2016, thieves stole $100 million from the central bank of Bangladesh with just a few keystrokes. 

Technological advancements in banking and finance have helped to make doing business hugely efficient. But as the two examples highlight, it has also made it all the more 'easier' for crooks to carry out bank heists. Other parts of business are similarly affected by technological progress. For example, the digitisation of client information has made it both easy for businesses to access and use effectively and also for external parties to steal and abuse. Furthermore, cloud computing can both help increase the mobility and access of business systems and also make them more open to hacking. 

For small business, cyberattacks can come in various forms including: 

  • Ransomware; This is 21st century version of a 'protection racket', whereby cyber-mafioso install malicious software onto a company's servers and lock-up the business's data. The data, which is generally essential for the business to run, can only be unlocked after a ransom is paid (usually in bitcoin). 
  • Malware; This is another form of malicious software, commonly referred to as 'viruses' or 'trojans'. The purpose of these attacks is generally to disrupt operations. 
  • Phishing; The purpose of this type of cyberattack is to gain access to sensitive data or information, which might be valuable to the perpetrator (e.g. account details, contact lists, etc). 

Appropriate cyber security systems and processes, including robust user password and verification programs, can help protect a business from these risks. Furthermore, financial losses from such an attack might also be minimised through cyber risk insurance. Shunning the efficiencies of modern-day computing power in favour of paper-based record keeping and systems is the only way to really avoid such risks altogether, but most businesses would not be able to survive for long without some level of digitisation.

 

LBW Wealth Management is an Authorised Representative of Wealthsure Financial Services Pty Limited AFSL 326450

This article has been prepared by LBW's investment committee based on its understanding of current regulatory requirements and laws. It is not considered advice and provides general information pertaining to our ideology surrounding future asset allocation strategies. It does not take into account each client's individual objectives, financial situation or needs. If you would like to know how LBW's understanding of the current environment impacts on your portfolio please contact a Financial Adviser and to discuss your options or before making an investment decisions. 

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