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Barclays launches internet banking in wake of Postbank cyberheist

Security concerns rise in Africa as financial institutions face repeated hacking attempts

In the wake of last month's $6.7 million cyberheist from Postbank, Barclays Bank has launched Internet banking services and intends to invest more money in the next five years to make Web-based products accessible for free to the public.

The bank said it wants to pioneer the evolution of digital banking platforms in 2012 and beyond and ensure that customers have access to world-class products and services.

"Over the past year, the bank had introduced electronic services that have transformed customers' banking experience," said Barclays Bank Zambia Managing Director Saviour Chibiya earlier this month.

The new electronic services, Chibiya said, include SMS alerts, which allow customers to monitor account transactions, e-statements as well as bank cards and PIN numbers on Point of Sale machines to enhance security.

Barclays Bank's emphasis on security come in the wake of widespread problems reported by various financial institutions in Africa.

In January, Postbank's Internet banking service was hit by cybercriminals who reportedly used stolen login information to transfer about 42 million rand (US$5.5 million) into multiple bank accounts.

South African authorities, led by audit and advisory firm KPMG, have launched an investigation into the hacking of the bank's systems by cybercriminals.

Postbank is owned by the South African government and operates under the country's postal service. Three years ago, Postbank spent 15 million rand to upgrade its fraud detection system after bank customers were hit hard by an upsurge in card fraud via cloning and other phishing activities.

In 2009, Internet banking and electronic commerce services by international banks operating in Zambia and other African countries were briefly suspended after criminals gained access to bank accounts and stole millions of dollars. The theft led the banks to limit cash withdraws using cards to $200 from $2,000 per day.

Over the past two years, major banks in Africa, including Standard Chartered Bank and Standard Bank, have reported phishing activities as well as suspicious debt card transactions on customers' accounts.

Phishing attacks aimed at bank customers feature unsolicited messages instructing users to follow a link to confirm their account information, as a way for criminals to obtain passwords and user identities.

The African region is experiencing an explosion of mobile money services as banks and mobile providers compete for customers who would otherwise not have a bank account. This has increased phishing attacks on unsuspecting customers.

The problem has been heightened by the fact that very few African countries have a legal framework for cybercrime prevention or the skills, equipment and organizational abilities to fight cybercrime. Zambia, for example, has a computer misuse law that calls for convicted hackers to be sentenced to jail for up to 25 years, but the country has no equipment and organizational infrastructure to fight cybercrime.

In Nigeria, the Central Bank website was last week knocked offline as hackers tried to get access to the bank's system. The Nigerian government is still struggling to put in place a legal framework that would help prevent cybercrime.


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