Technological Thoughts by Jerome Kehrli

In my current company, we implement a state-of-the art banking Fraud Detection system using an Artificial Intelligence running on a Big Data Analytics platform. When working on preventing banking fraud, looking at SWIFT messages is extremely interesting. 98% of all cross-border (international) funds transfers are indeed transferred using the SWIFT Network.
The SWIFT network enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment. Many different kind of information can be transferred between banking institution using the SWIFT network.

In this article, I intend to dissect the key SWIFT Messages Types involved in funds transfers, present examples of such messages along with use cases and detail the most essential attributes of these payments.

These key messages are as follows:

• MT 101 - Request for Transfer
• MT 103 - Single Customer Credit Transfer
• MT 202 - General Financial Institution Transfer
• MT 202 COV - General Financial Institution Transfer for Cover payments

This article presents each and every of these messages, discuss their typical use cases and details key SWIFT fields involved.

The Bangladesh bank heist - or SWIFT attack - is one of the biggest bank robberies ever, and the most impressive cyber-crime in history.

This is the story of a group of less than 20 cyber-criminals, composed by high profile hackers, engineers, financial experts and banking experts who gathered together to hack the worldwide financial system, by attacking an account of the central bank of Bangladesh, a lower middle income nation and one of the world's most densely populated countries, and steal around 81 million US dollars, successfully, after attempting to steal almost a billion US dollars.

In early February 2016, authorities of Bangladesh Bank were informed that about 81 million USD was illegally taken out of its account with the Federal Reserve Bank of New York using an inter-bank messaging system known as SWIFT. The money was moved via SWIFT transfer requests, ending up in bank accounts in the Philippines and laundered in the Philippines' casinos during the chinese New-Year holidays.

Fortunately, the major part of the billion US dollars they intended to steal could be saved, but 81 million US dollars were successfully stolen and are gone for good.

The thieves have stolen this money without any gun, without breaking physically in the bank, without any form of physical violence. (There are victims though, there are always victims in such case, but they haven't suffered any form of physical violence)
These 81 million US dollars disappeared and haven't been recovered yet. The thieves are unknown, untroubled and safe.

The Bangladesh bank heist consisted in hacking the Bangladesh central bank information system to issue fraudulent SWIFT orders to withdraw money from the banking institution. SWIFT is a trusted and closed network that bank use to communicate between themselves around the world. SWIFT is owned by the major banking institutions.

In terms of technological and technical mastery, business understanding, financial systems knowledge and timing, this heist was a perfect crime. The execution was brilliant, way beyond any Hollywood scenario. And the bank was actually pretty lucky that that the hackers didn't successfully loot the billion US dollars as they planned, but instead only 81 million.
As such, from a purely engineering perspective, studying this case is very exiting. First, I cannot help but admire the skills of the team of thieves team as well as the shape of the attack, and second, it's my job in my current company to design controls and systems preventing such attack from happening against our customers in the future.

In this article, I intend to present, explain and decipher as many of the aspects of the Bangladesh bank heist and I know.