The entire Swift debacle has a lot of entities in the financial world on edge. Especially Swift, the payment network connecting a lot of banks around the world, is starting to take harsher action. Their latest plan involves the expulsion of banks with security standards that are not up to par.
Swift Punishes Banks Instead of Helping
An interesting and disconcerting statement was made by Swift chief exec Gottfried Leibbrandt this weekend. If it were up to him, all banks that are part of the payment network who have subpar security standards should be expulsed. Doing so would result in this institutions being excluded from the global interbank network.
It is impossible to deny the level of skill most current day hackers bring to the table is cause for great concern. Especially the banking sector, which is lagging decades behind on cyber security, is facing a bigger threat than ever before. Taking harsh measures may be the only way out of this mess, albeit it would create new problems of a different kind.
Gottfried Leibbrandt told the media:
“We could say that if the immediate security around Swift is not in order we could cut you off, you shouldn’t be on the network. There are pros and cons to that. The pros are that it provides clarity that if you are on the Swift network you need minimum standards. I think the con is if you do it too heavy handed you could drive people to unsafe channels.”
Tougher security measures are direly needed for all banks around the world, yet it is much harder to achieve for smaller institutions. Budget restrictions and a lack of proper IT staff make it all but impossible for a smaller bank to defend itself against high-skilled hackers. Swift should be helping these institutions, rather than create a new elite within the banking elite.
At the same time, these proposed harsh changes are not entirely unexpected either. Alienating the smaller banks by cutting them off from the Swift network may be a bit too drastic right now, though. But the recent attacks are also throwing a monkey wrench into Swift’s expansion plans, which may need to be scaled back for the time being.
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