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Software Helps Banks Hold on to Their Money

Israeli product designed to Block Illegal Cash Transfers

Time was when you wanted to pull off a big bank heist, you drove slowly up in the dark, jimmied the door lock and then blew open the safe.

And you did so only after casing the joint for days on end, planning each detail down to the millisecond.

Indeed, the 11 thugs who shook down Brink’s in Boston back in January 1950 for US$2.8 million – up until then, the biggest robbery in U.S. history — planned and trained for two whole years!

But for the gang who stole US$81 million from the Bank of Bangladesh’s account at the Federal Reserve Bank in New York last February, the process was much smoother.

They simply hacked the SWIFT codes – the codes banks use for international wire transfers. Moreover, their haul could have been much, much bigger.

In fact, they originally planned to steal US$951 million. Thankfully, the transactions covering the bigger amount were flagged and the money remained in the vault.

Still, the banking industry can’t rest on its laurels. Not only did the hackers compromise the Bangladesh bank’s computers, but they managed to seize the bank’s credentials for payment transfers. They then used those credentials to move money to accounts in both Sri Lanka and the Philippines.

Such online thievery doesn’t surprise Mark Freeman,  the sales director for KELA Targeted Cyber Intelligence, a Tel Aviv-based software producer. And his company makes a product that helps banks thwart such robberies.

That product scans the Darknet – that part of the Internet beloved by criminals — for hackers trying to attack a company’s data base. By alerting a company to such a possibility, KELA’s software helps keep such hackers at bay, explains Freeman, whose clients include big banks, as well as the Fortune 500.

Indeed, he told Media Line, cyber attacks are more of a threat to big corporations, than to smaller ones. So, KELA tailors its software to the former. In addition to the Americas, the company boasts clients in the U.K. Western Europe, Africa, Russia and Japan. But not in Bangladesh. Since Israel has no formal relations with that country, KELA hasn’t gone there looking for business.

SWIFT codes aren’t the only things hackers try to crack. They also try to steal credit card information such as passwords, thus enabling them to rob bank accounts. Moreover, to manipulate a company’s stock price, hackers may try to steal its business intelligence, says Ami Rojkes Dombe, who writes about technology for Israel Defense magazine. To get such intelligence, they may target a CEO’s laptop, cell phone and his social networks.

Where are most hackers based? Russia, for starters – not surprising, perhaps, given the recent fuss over that country’s interference in the U.S. presidential election. China also boasts legions of hackers.

But if a big haul is one motivation for hackers, the technological challenge is another. That and even idealism, says Freeman, who explains that someone may target a company because of the environmental damage he believes it has caused . Yet, because the Darknet is anonymous, nabbing hackers is difficult. In the meantime, they keep on trying.

In fact, according to KELA’s website, roughly 8,320 attempts are made every year to breach a company’s cyber walls, while a total of more than 700 million records are breached annually. And even though a data breach costs a company $3.8 million, more than 200 days usually go by before a breach is discovered.

Although the financial cost is high, the damage to a company’s reputation can be higher. That’s because with any breach, the trust a company enjoys with its customers is necessarily compromised, says Rojkes Dombe, who also cites damage to a company’s competitive position. After all, if a company has a product, only to have it stolen by some hacker, that company has now lost its business advantage.

Founded in 2009, KELA now employs 50 people, of whom 20, all native-born Israelis, are full-time programmers. The company, which is private, was set up by Nir Barak and Yigal Naveh. The latter was an intelligence officer in the Israel Defence Forces, as was Eran Shtauber, KELA’s vice president of products.

Two other company officers – Yakir Bechler and Isaac Dvir – also served in intelligence units. In fact, Mr. Dvir, who oversees research and development, was chief of information security in the IDF.

Two members of KELA’s board of directors have a background in intelligence as well. Shabtai Shavit was director general of the Mossad, Israel’s spy agency, and Yaakov Amidror served as national security advisor to Israeli prime minister Binyamin Netanyahu. In addition to Tel Aviv, the company has offices in Tokyo and New York.