PC World recently went to a "live hacking" event where representatives from a leading Australian software security firm showed how "easy" it can be to compromise an unsuspecting users bank account. By saying easy, it should be noted that the illicit Trojan created for this demonstration was designed to bypass the specific security software installed on the notebook used - AVG free antivirus.
One of Australia's leading banks - and also one major Asian bank - was chosen at random to be guinea pigs for the demonstration. It was emphasised that the Australian bank was picked at random and not specifically targeted -- this quite easily could have been any one of the major banks located in Australia.
First up was a demonstration of how a customer can log into their bank account and have the entire session taken over by a nefarious user. Once logged in, a simple message was displayed saying that the Trojan now had complete control over the Internet banking session. In reality, this compromise could be used to access bank account details, passwords and even credit card numbers - not really the kind of information you want others to gain, especially for illegal purposes.
The second demonstration involved a user logging into a bank account to make a money transfer. This transaction was processed without incident, and on the surface looked like a regular transfer from one account to another. It was then revealed that a third party - namely the malware - had intercepted this transaction and redirected the transfer to a completely separate bank account. From the bank's point of view, it looked legitimate - it was asked to transfer money to a specific account and did, not realising that when the request was processed, a new illegal account number had replaced the legitimate one.
These demonstrations were very much a "worse-case scenario", but proved that in the right situation, anyone could be compromised while banking online. However, attacks like these can be avoided by some very simple solutions - decent security software, making sure your operating system is up-to-date, and using common sense.
Business consultant Peter Ager, also in attendance, said that customers using online banking should take more care when providing personal information over the Internet, especially where there is the risk of a "man-in-the-middle" attack.
Mr Ager continued by saying that once a nefarious user had stolen your account username and password, they had all the information needed by the bank to validate that you are really you -- even if it's actually someone else.
New policies known as Know Your Customer (KYC) have recently been introduced for all Australian banks; this gives them a two-year transition period to update their methods of customer authentication. This, says Mr Ager, could mean throwing away all current customer information and starting again.
In the end, banks can do only so much to protect your money from fraudulent Internet activity. If an online banking customer fails to keep their computer free of malware and viruses, they run the risk of having malicious code secretly running on their computer -- code that can pass on private information to criminals such as bank and credit card account details.
The moral of this story is to work with your financial institutions by keeping your computer as safe and secure as possible. Use antivirus and anti-spyware software, install a decent firewall and keep these -- along with your operating system -- updated.