Big Shock For The Banking Sector: World's Largest Bank Gets Hit By Cyber Attack

If the multiple banks¡¯ collapses (including Credit Suisse and SVB Bank), which this year has already seen, weren¡¯t enough, another big shock has hit the banking sector.

What Happened?

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On Thursday, trades handled by the world¡¯s largest bank (in terms of assets), Industrial & Commercial Bank of China Ltd., were affected after a cyber attack hit the bank.

The bank¡¯s US unit had been hit by a cyberattack, rendering it unable to clear US Treasury trades after entities responsible for settling the transactions swiftly disconnected from the systems. That forced ICBC to send the required settlement details to those parties by messenger carrying a thumb drive as the lender raced to limit the damage, as per the Bloomberg report.

Also Read: Inside America's Smallest Bank That Has No ATM, No Fees & No Website

Who Is Behind The Cyber Attack?

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As described by market participants, this hacking followed the attack by suspected perpetrator Lockbit, a prolific criminal gang with ties to Russia that has also been linked to hits on Boeing Co., ION Trading UK, and the UK¡¯s Royal Mail. The strike caused immediate disruption as market makers, brokerages, and banks were forced to reroute trades, with many uncertain when access would resume.

The incident spotlights a danger that bank leaders concede keeps them up at night¡ªthe prospect of a cyber attack that could someday cripple a key piece of the financial system¡¯s wiring, setting off a cascade of disruptions. Even brief episodes prompt bank leaders and their government overseers to call for more vigilance,as per the report.

¡°This is a true shock to large banks around the world,¡± said Marcus Murray, the founder of Swedish cybersecurity firm Truesec. ¡°The ICBC hack will make large banks around the globe race to improve their defences, starting today.¡±

How Has The Bank Reacted To The Hacking?

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Late Thursday, the world's largest bank confirmed it had experienced a ransomware attack a day earlier that disrupted some systems at its ICBC Financial Services unit. The company said it isolated the affected systems and that those at the bank¡¯s head office and other overseas units weren¡¯t impacted, nor was ICBC¡¯s New York branch.

As details of the attack emerged, employees at the bank¡¯s Beijing headquarters held urgent meetings with the lender¡¯s US division and notified regulators as they discussed next steps and assessed the impact, according to a person familiar with the matter. ICBC is considering seeking help from China¡¯s Ministry of State Security in light of the risks of potential attacks on other units, the person said, as per the Bloomberg report.

The extent of the disruption wasn¡¯t immediately clear, though participants in the Treasury market reported that liquidity was affected. The Securities Industry and Financial Markets Association held calls with members about the matter on Thursday.

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