Entries tagged [bank]
by Jerome Kehrli
Posted on Friday Apr 05, 2019 at 11:40AM in Banking
In my current company, we implement a state-of-the art banking Fraud Detection system using an Artificial Intelligence running on a Big Data Analytics platform. When working on preventing banking fraud, looking at SWIFT messages is extremely interesting. 98% of all cross-border (international) funds transfers are indeed transferred using the SWIFT Network.
The SWIFT network enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment. Many different kind of information can be transferred between banking institution using the SWIFT network.
In this article, I intend to dissect the key SWIFT Messages Types involved in funds transfers, present examples of such messages along with use cases and detail the most essential attributes of these payments.
These key messages are as follows:
- MT 101 - Request for Transfer
- MT 103 - Single Customer Credit Transfer
- MT 202 - General Financial Institution Transfer
- MT 202 COV - General Financial Institution Transfer for Cover payments
This article presents each and every of these messages, discuss their typical use cases and details key SWIFT fields involved.Read More
by Jerome Kehrli
Posted on Wednesday Jul 04, 2018 at 09:34PM in Banking
The digitalization with its changes of means and behaviours and the induced society and industrial evolution is putting increasingly more pressure on banks.
Just as if regulatory pressure and financial crisis weren't enough, banking institutions have realized that they need to transform the way they run their business to attract new customers and retain their existing ones.
I detailed already this very topic in a former article on this blog: The Digitalization - Challenge and opportunities for financial institutions.
In this regards, Artificial Intelligence provides tremendous opportunities and very interesting initiatives start to emerge in the big banking institutions.
In this article I intend to present these three ways along with a few examples and detail what we do at NetGuardians in this regards.Read More
by Jerome Kehrli
Posted on Monday Apr 30, 2018 at 02:57PM in Banking
In this article, I intend to present my company's - NetGuardians - approach when it comes to deploying Artificial Intelligence techniques towards better fraud detection and prevention.
This article is inspired from various presentations I gave on the topic in various occasions that synthesize our experience in regards to how these technologies were initially triggering a lot of skepticism and condescension and how it turns our that they are now really mandatory to efficiently prevent fraud in financial institutions, due to the rise of fraud costs, the maturity of cybercriminals and the complexity of attacks.
Here financial fraud is considered at the broad scale, both internal fraud, when employees divert funds from their employer and external fraud in all its forms, from sophisticated network penetration schemes to credit card theft.
I don't have the pretension to present an absolute or global overview. Instead, I would want to present things from the perspective of NetGuardians, from our own experience in regards to the problems encountered by our customers and the how Artificial Intelligence helped us solve these problems.
by Jerome Kehrli
Posted on Friday Jan 05, 2018 at 07:00PM in Big Data
I am presenting in this video NetGuardians' Big Data approach, technologies and its advantages for the banking institutions willing to deploy big data technologies for Fraud Prevention.
The speech is reported in textual form hereafter.Read More
by Jerome Kehrli
Posted on Wednesday Nov 15, 2017 at 11:03PM in Banking
The Bangladesh bank heist - or SWIFT attack - is one of the biggest bank robberies ever, and the most impressive cyber-crime in history.
This is the story of a group of less than 20 cyber-criminals, composed by high profile hackers, engineers, financial experts and banking experts who gathered together to hack the worldwide financial system, by attacking an account of the central bank of Bangladesh, a lower middle income nation and one of the world's most densely populated countries, and steal around 81 million US dollars, successfully, after attempting to steal almost a billion US dollars.
In early February 2016, authorities of Bangladesh Bank were informed that about 81 million USD was illegally taken out of its account with the Federal Reserve Bank of New York using an inter-bank messaging system known as SWIFT. The money was moved via SWIFT transfer requests, ending up in bank accounts in the Philippines and laundered in the Philippines' casinos during the chinese New-Year holidays.
Fortunately, the major part of the billion US dollars they intended to steal could be saved, but 81 million US dollars were successfully stolen and are gone for good.
The thieves have stolen this money without any gun, without breaking physically in the bank, without any form of physical violence. (There are victims though, there are always victims in such case, but they haven't suffered any form of physical violence)
These 81 million US dollars disappeared and haven't been recovered yet. The thieves are unknown, untroubled and safe.
The Bangladesh bank heist consisted in hacking the Bangladesh central bank information system to issue fraudulent SWIFT orders to withdraw money from the banking institution. SWIFT is a trusted and closed network that bank use to communicate between themselves around the world. SWIFT is owned by the major banking institutions.
In terms of technological and technical mastery, business understanding, financial systems knowledge and timing, this heist was a perfect crime. The execution was brilliant, way beyond any Hollywood scenario. And the bank was actually pretty lucky that that the hackers didn't successfully loot the billion US dollars as they planned, but instead only 81 million.
As such, from a purely engineering perspective, studying this case is very exiting. First, I cannot help but admire the skills of the team of thieves team as well as the shape of the attack, and second, it's my job in my current company to design controls and systems preventing such attack from happening against our customers in the future.
In this article, I intend to present, explain and decipher as many of the aspects of the Bangladesh bank heist and I know.Read More
by Jerome Kehrli
Posted on Tuesday Mar 21, 2017 at 09:52PM in General
A few weeks ago, I did a speech about the Digitalization and its impact on financial institutions, both in terms of challenges and opportunities in the context of my role as Head of R&D in my current company.
I am reporting here my speech as an article.
Even though the Digitalization and its impacts is something so widely discussed and studied nowadays, even in banking institutions, I still find it puzzling that so many of them struggle following the pace.
Having said that, many others on the other hand have well understood how much technology is about to disrupt the banking business just as Uber has disrupted the transportation business and AirBnB the lodging business and many good and enlightening initiatives start to flourish in the news.
But still, it seems to me that most innovations in banking are really coming from small players or even startups - think of fintechs - instead of coming from the big players of the banking industry. For instance, paying everything with a cellphone is a thing for a few years now in many African countries while it's not at all in Europe, even in Switzerland, THE country of banking.
Especially in Switzerland, financial institutions struggle keeping up with evolution of their business coming from the digitalization on one side and the regulatory pressure as well as the reduction of the margins on the other side.
Discussing this very matter further exceeds the scope of this article of course but I want to report below my speech notes and present what I see as the most important challenges and opportunities for the banking industry coming from the digitalization.