R. Kinney Williams & Associates
R. Kinney Williams
& Associates

Internet Banking News

January 21, 2001

FYI - FRANKFURT, GERMANY - Germany's banking watchdogs Thursday said they have launched a security check at some of Europe's largest Internet banks and brokers as the threat from hackers or electronic theft increases. http://news.cnet.com/news/0-1007-200-4524136.html?tag=st.ne.ron.lthd 

FYI - Agencies Adopt Guidelines for Customer Information Security www.federalreserve.gov/BoardDocs/Press/BoardActs/2001/20010117/default.htm 

FYI - OCC Issues Corporate Manual on Internet Banking 
Press release - http://www.occ.treas.gov/ftp/release/2001-6.txt  
Manual -  http://www.occ.treas.gov/corpbook/group4/public/pdf/internetnbc.pdf 

FYI -  The NCUA Board issued a final rule amending Part 748 to require credit unions to establish written policies that safeguard member information and adding guidelines to implement guidelines for credit unions to consider when developing or revising their information security program. http://www.ncua.gov/news/board_reports/BAB011801.html 

INTERNET COMPLIANCE - TRUTH IN SAVINGS ACT (REG DD)

Financial institutions that advertise deposit products and services on-line must verify that proper advertising disclosures are made in accordance with all provisions of the regulations. Institutions should note that the disclosure exemption for electronic media does not specifically address commercial messages made through an institution's web site or other on-line banking system. Accordingly, adherence to all of the advertising disclosure requirements is required.

Advertisements should be monitored for recency, accuracy, and compliance. Financial institutions should also refer to OSC regulations if the institution's deposit rates appear on third party web sites or as part of a rate sheet summary. These types of messages are not considered advertisements unless the depository institution, or a deposit broker offering accounts at the institution, pays a fee for or otherwise controls the publication.

Disclosures generally are required to be in writing and in a form that the consumer can keep. Until the regulation has been reviewed and changed, if necessary, to allow electronic delivery of disclosures, an institution that wishes to deliver disclosures electronically to consumers, would supplement electronic disclosures with paper disclosures.

INTERNET SECURITY - We continue our review of the FDIC paper "Risk Assessment Tools and Practices or Information System Security."

Potential Threats To Consider

Serious hackers, interested computer novices, dishonest vendors or competitors, disgruntled current or former employees, organized crime, or even agents of espionage pose a potential threat to an institution's computer security. The Internet provides a wealth of information to banks and hackers alike on known security flaws in hardware and software. Using almost any search engine, average Internet users can quickly find information describing how to break into various systems by exploiting known security flaws and software bugs. Hackers also may breach security by misusing vulnerability assessment tools to probe network systems, then exploiting any identified weaknesses to gain unauthorized access to a system. Internal misuse of information systems remains an ever-present security threat.

Many break-ins or insider misuses of information occur due to poor security programs. Hackers often exploit well-known weaknesses and security defects in operating systems that have not been appropriately addressed by the institution. Inadequate maintenance and improper system design may also allow hackers to exploit a security system. New security risks arise from evolving attack methods or newly detected holes and bugs in existing software and hardware. Also, new risks may be introduced as systems are altered or upgraded, or through the improper setup of available security-related tools. An institution needs to stay abreast of new security threats and vulnerabilities. It is equally important to keep up to date on the latest security patches and version upgrades that are available to fix security flaws and bugs. Information security and relevant vendor Web sites contain much of this information.

Systems can be vulnerable to a variety of threats, including the misuse or theft of passwords. Hackers may use password cracking programs to figure out poorly selected passwords. The passwords may then be used to access other parts of the system. By monitoring network traffic, unauthorized users can easily steal unencrypted passwords. The theft of passwords is more difficult if they are encrypted. Employees or hackers may also attempt to compromise system administrator access (root access), tamper with critical files, read confidential e-mail, or initiate unauthorized e-mails or transactions.

 

PLEASE NOTE:  Some of the above links may have expired, especially those from news organizations.  We may have a copy of the article, so please e-mail us at examiner@yennik.com if we can be of assistance.  

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