In an effort to combat an increasing number of fraudulent transfers carried out using its network, SWIFT, the international bank transfer network, announced this month that it is adding new tools and controls designed to prevent fraudulent transfers in real time.

SWIFT reported that the new tools integrate into the SWIFT system directly without the need for new hardware or software and allow financial institutions to screen SWIFT message flows according to a set of pre-defined parameters. Suspicious money transfer requests would be immediately flagged and can be reviewed by a financial institution before processing.

SWIFT has been under pressure in recent years to address fraudulent transfers as a number of high profile cross-border bank thefts have utilized the network. In one instance, thieves stole millions of dollars from the central bank of Bangladesh. In that theft, cyber attackers used stolen operator credentials to submit 35 fraudulent SWIFT transfer requests totaling $951 million. Five of the requests passed, and the criminals made off with $81 million funneled through a web of offshore companies.

Once stolen funds are transferred, law enforcement and financial institutions stand little chance of recovery. The new SWIFT messaging tools are intended to stop such transfers before they occur.

Luc Meurant, head of SWIFT’s Financial Crime Compliance Services, notes that the new messaging tools are only one part of SWIFT’s broader efforts to deliver “a full suite of hosted offerings that address our customers’ needs in the fraud and cyber-crime prevention areas, as well as in the sanctions, Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance domains.”  To implement its new and  enhanced compliance requirements, SWIFT is requiring that its customers comply with new mandatory security protocols on April 1st, with internal and external compliance audits to begin on January 1, 2018.

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Photo of Norman Roos Norman Roos

Norman Roos, a member of Robinson+Cole’s Business Transactions Group, concentrates his practice on transactional, regulatory, and technology matters relating to the financial services and real estate industries. He is also a member of the firm’s Financial Services Cyber-Compliance Team and advises financial institutions…

Norman Roos, a member of Robinson+Cole’s Business Transactions Group, concentrates his practice on transactional, regulatory, and technology matters relating to the financial services and real estate industries. He is also a member of the firm’s Financial Services Cyber-Compliance Team and advises financial institutions concerning data privacy and security matters, particularly in relation to policy planning and implementation.

Mr. Roos is counsel to the Connecticut Mortgage Bankers Association, Inc., and is president-elect of the American College of Mortgage Attorneys where he has served on the Board of Regents and as Connecticut State Chair. A member of the Connecticut Bar Association, Mr. Roos is Past Chair of the Financial Institutions Law Section. He has served on a number of Connecticut Law Revision Study Committees including those on Uniform Common Interest Ownership Act, Electronic Communications, Mortgagor Liability, and Electronic Recording of Land Records. Read his full bio here.

Photo of Scott Baird Scott Baird

Scott M. Baird is an associate in the firm’s Business Transactions and Finance Groups, where his practice involves all aspects of corporate and securities law, including corporate governance, mergers and acquisitions, private equity and venture capital transactions, joint ventures, finance transactions, and securities…

Scott M. Baird is an associate in the firm’s Business Transactions and Finance Groups, where his practice involves all aspects of corporate and securities law, including corporate governance, mergers and acquisitions, private equity and venture capital transactions, joint ventures, finance transactions, and securities law and compliance. He focuses on new legislation as well as regulatory and compliance matters involving financial service institutions. Read his full rc.com bio.